Romania’s state electricity distributor SC Electrica SA has sold a 8.6 per cent stake to the European Bank for Reconstruction and Development (EBRD) for €75 million as part of an investment strategy to upgrade the company’s infrastructure and improve corporate governance.
SC Electrica SA, which has headquarters in Bucharest and serves around 3.5 million customers in north-western, central, southern and south-eastern Romania, has used the IPO to move towards privatisation to offer customers “the same level of service as other – already privatised – market players”.
Nandita Parshad, power and energy director at the EBRD, commented on the deal: “Electrica’s IPO – Romania’s largest to date – is a landmark transaction.
“Our participation demonstrates EBRD’s commitment to supporting the government’s plans for increased privatisation of the energy sector.
He added: “We will work with the company towards the successful implementation of an ambitious set of measures to align its corporate governance with international standards, which will provide additional comfort and confidence to potential future investors.”
The EBRD and Electrica’s management have signed a framework agreement for the implementation of a corporate governance action plan and an environmental and social action plan.
Speaking during Electrica’s IPO marketing roadshow in London, Romania’s Energy Minister, Razvan Nicolescu, said: “We trust that the EBRD will be a long-term partner for Romania through Electrica, and will use its vast experience to support the implementation of international corporate governance standards in the company.
“We hope that this IPO will promote Electrica, and thereby Romania, as a good business destination, stable and predictable for investment.”
The EBRD is the largest institutional investor in Romania investing approximately €6.7 billion across 360 projects in the country.
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Romania’s SC Electrica SA receives €75m injection from EBRD