Investments in Romanian energy projects postponed or abandoned

Vineri, 4 martie 2011, 16:00 English | Business

The viable units of Romanian energy company Termoelectrica will be separated and the rest of the company operations will be closed by mid-2011, according to information provided to HotNews.ro by the Economy Ministry. The scenario is included in the letter of intention signed by the Romanian authorities with the IMF and will be applied separately from the creation of two major national energy companies, Electra and Hidroenergetica. The fate of several power plants remains uncertain as some of the investments announced with fanfare in 2008 appear to be just an illusion.

• A 400 million euro investment in a project at a Termoelectrica SA power plant in Galati, Eastern Romania is on stand-by following the withdrawal of Czech group CEZ. CEZ abandoned the investment plan last summer and negotiations then started with Arcelor Mittal, with no effect so far.
• A 400 million euro investment in a project at the Termoelectrica plant in Borzesti is still on paper despite GfK Suez, through its Electrabel subsidiary, signed a memorandum with Termoelectrica in 2008.
• A 1 billion euro project in Braila, agreed in 2008, is slowly advancing as in December 2010 a company, Project Braila Power SA, was established. The project company will be run by a consortium formed of E.ON and ENEL.
• Another project in Doicesti has been dragging as for two years Termoelectrica company has had difficult negotiations with Mechel, which eventually withdrew from talks last year.

The projects are in stand-by because of incertitude surrounding the launch of procedures for the establishment of two major power companies in Romania, Electra and Hidroenergetica.