Financing overwhelmingly in the private sector
The European Bank for Reconstruction and Development (EBRD) invested over half a billion euros in the Romanian economy in 2017. The Bank supported 29 projects with €546 million of debt and equity investments last year. Of this financing, 93 per cent was provided to the private sector.
Last year’s investment was close to the seven-year high mark of €612 million, provided in 2012. Equity investment reached an all-time record of €122 million in nine deals.
The 2017 results bring total EBRD investment in Romania to €7.8 billion, and the number of projects in the country to 415 at the end of the year.
In Romania, the Bank focuses on promoting access to finance and expanding products in the financial sector, reducing regional disparities by developing infrastructure, and improving competitiveness in the corporate sector through improved governance and management practices, as well as on restructuring state-owned enterprises.
The size of EBRD investments in any given country is determined by factors such as the number of projects that are ready for financing and satisfy the Bank’s requirements, the business climate, and the availability of financing from other sources.
Investments in 2017
In 2017, the EBRD financed greenfield investments such as a recycling facility for industrial oil waste and a new plant for soft alloys. The Bank also financed the expansion of a local pharmaceutical retail chain and a real estate development for logistics in the outskirts of Bucharest. Equity investments include a local agriculture holding, a popular supermarket chain, and a company targeting oil & gas exploration in the Black Sea. The Bank also financed municipal infrastructure projects such as new buses for Sibiu, Brasov and Constanta.
The EBRD was very active in the capital markets, backing landmark bond issues, supporting alternative methods of financing, such as leasing, providing business advice and financing to small and medium-sized enterprises (SMEs).
The year also saw two partner banks joining the new Green Economy Financing Facility (GEFF) for Romania, which blends EBRD money with concessional funding from the International Cooperation and Development Fund (TaiwanICDF) for energy-saving investments in residential buildings. Funding from GEFF was provided to Banca Transilvania and UniCredit, which are now on-lending the funds to households and housing associations.
Matteo Patrone, EBRD Director for Romania and Bulgaria, said: “I am very pleased that we could support such a high number of important projects in 2017. We hope to continue investing strongly in 2018 and will maintain focus on the private sector. We are also planning several investments in municipal infrastructure and stand ready to support the authorities in advancing infrastructure initiatives and restructuring state-owned enterprises.”