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EBRD lends 37 million euros to Romania’s electricity distribution network operator

The European Bank for Reconstruction and Development (EBRD) will provide a loan of 37 million euros to Romania’s electricity distribution network operator, Distribuție Energie Electrică Romania (DEER), the bank announced on Wednesday (22 March).

The loan will finance the company’s liquidity needs to cover the increased cost of electricity purchases required for network losses. This would enable DEER to continue the distribution of electricity to Romanian consumers without interruptions and to continue investments in the electricity grid to cope with the integration of additional renewables generation, EBRD said.

The transaction is part of the EBRD’s Resilience and Livelihoods framework, which supports companies and countries affected by the war in Ukraine. 

DEER is a Romanian electricity distribution network operator fully owned by the utility company, Electrica. The company’s core business is the distribution of electricity to residential and industrial consumers in the Romanian regions of Northern Muntenia, Northern Transylvania and Southern Transylvania. 

“We are happy to support DEER to cover its liquidity needs and continue its investments in improving grid efficiencies. The EBRD’s support will ensure uninterrupted provision of vital energy services, and at the same time contribute to Romania’s green transition,” said Mark Davis, EBRD Regional Head of Romania and Bulgaria.

“Given the strategy of diversifying financing sources at the level of Electrica Group in the context of financing its current activity, pre-financing of the support scheme, but also the financing of the opportunities for business development and of the plans for further investment in the distribution network, continuing the partnership with the EBRD allows us, through this new term loan with a maturity of five years, to refinance a part of the price difference  of electricity for covering network losses, aligned with the recovery of this difference through tariffs,” said Alexandru Chirita, Electrica’s Chief Executive Officer. “EBRD remains one of the strategic partners of Electrica Group, having been with us since the listing.”

The EBRD is one of the largest institutional investors in Romania. To date, it has invested nearly 10.3 billion euros in 508 projects in the country. 

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