Transelectrica (Bond Issue)

Project number:

46012

Approval date:

17 Dec 2013

Status:

Complete

PSD disclosed:

19 Feb 2014

Translated version of this PSD: Romanian

Project Description

The EBRD participated in Transelectrica’s first local RON denominated bond issue. The book building process closed successfully on December 17th 2013 and the bonds started trading on the Bucharest Stock Exchange the following month.

The funds will be used by the company to finance investments, as well as for refinancing certain financial obligations for the purpose of optimizing the financing structure of the Issuer and of diminishing the risks connected to the cost fluctuations and depreciation of the national currency.

Transition Impact

The investment was consistent with the Bank’s strategy for Romania, due to the reasons below:

  • it supported the development of the  local currency capital markets ;
  • it supported the restructuring of Transelectrica’s balance sheet, by better aligning assets and liabilities and reducing the effects of FX risks;
  • through its demonstration effects, it has the potential to be replicated by other Romanian private or state owned enterprises.

The Client

Transelectrica is the Romanian electricity Transmission System Operator (TSO), balancing market operator and provider of ancillary services for the electricity market. It is a joint stock company owned by the Romanian Government (58.69%) and Fondul Proprietatea (13.50%). It is listed on the Bucharest Stock Exchange.

EBRD Finance

The Bank participated with RON 40 million out of the total bond issuance of RON 200 million.

Project Cost

RON 40 million.

Environmental Impact

Category B.

The proposed Bank transaction, involving the Bank’s participation in a corporate bond, does not have a defined use of proceeds for any investment project. In accordance with the Bank’s Environmental and Social Policy, a corporate audit was undertaken as part of the Bank’s Environmental and Social Due Diligence (ESDD). The Bank has had a historic relationship with the Company and therefore a good understanding of environmental, health and safety aspects associated with the Company’s operations.  Transelectrica has been providing the Bank with regular reports since 2000 as per current loans agreement, which were of good quality. During this period the Company has implemented a comprehensive environmental, health and safety management system and adhered in their operations to industry good practice.

The ESDD has confirmed that the Company has the institutional capacity to implement the Bank’s Performance Requirements (PRs) and has a good level of compliance with National and EU environmental standards. Based on the ESDD the existing Environmental and Social Action Plan (ESAP) has been updated to structure the project to comply with the Bank’s PRs. The ESAP includes the need to further develop a public information campaign and stakeholder engagement programme. It may also include among others the development of information packs to provide to the public, local administration as well as own staff to help address concerns on public health and safety associated with transmission projects. The Company has  also agreed to implement a CSR programme in line with the Global Reporting Initiative (GRI) standard in 2015.

The Bank will monitor the implementation of the ESAP.

Technical Cooperation

None.

Implementation Summary

The Project represented the first non-FI corporate bond issued in Romania and listed on the Bucharest Stock Exchange. The initial bond placement was a success, being oversubscribed and opening the market for similar issuances. The overall Bond Programme, however, did not materialise, following the decision of Transelectrica to postpone the envisaged follow-up investments.
 
Due to the cancelation of the large part of the Programme, the Project’s Transition Impact could not materialise to the full extent. Transition Impact was partly achieved, as the Project contributed to the development of local capital markets by successfully placing the bond and demonstrated new replicable activities.

Company Contact

Stefan Doru Bucataru, Directorate President
Tel: +40 21 3035 611
Fax: +40 21 3035 610
stefan.bucataru@translectrica.ro

Gabriel Mustea, Member of the Directorate
Gabriel.mustea@transelectrica.ro
Tel: + 40 21 3035 885
Fax: + 40 21 3035 918

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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