EIB confirms EUR 120 million support for the distribution operator of Electrica Group to upgrade electricity distribution networks, deploy advanced meters and accelerate renewable energy use across Romania
- First 120 million long-term EIB loan from EUR 210 million facility signed during high-level visit
- New financing to connect more than 180,000 customers, increase network capacity and improve reliability and quality of electricity supply
- Investments to support advanced-metering rollout and to enable long-term integration of renewable energy generation
- EIB loan represents up to 75% of project cost, reflecting importance of supporting energy transition in Romania
The European Investment Bank today formally agreed a new EUR 120 million loan with Distribuție Energie Electrică Romania S.A. (DEER), the electricity distribution subsidiary of the Electrica Group.
The first ever European Investment Bank financing for DEER will support reinforcement and modernisation of the electricity distribution grid in the country, including upgrading and constructing new power lines, constructing and refurbishing of power substations and installing components for network automation across Romania.
The 15 year EUR 120 million loan, the first part of EUR 210 million EIB backing for energy infrastructure investment by DEER and related guarantee agreement, were signed at a ceremony in Bucharest by Corina Popescu, CEO of Electrica, Valentin Branescu, Acting CEO of DEER and respectively Christian Kettel-Thomsen, European Investment Bank Vice President, and witnessed by Virgil-Daniel Popescu, Romanian Minister of Energy.
“Scaling up energy distribution investment is crucial to improve network reliability, harness Romania’s renewable energy potential and contribute to Europe’s energy transition. I welcome the European Investment Bank’s EUR 120 million support for energy investment in Romania and their new partnership with Electrica Group”, said Virgil-Daniel Popescu, Romanian Minister of Energy.
“Electrica Group is actively pursuing options for diversifying its financing sources in view of the business development opportunities and of the ambitious investment plan. In the distribution segment, Electrica Group is committed to unlocking investments that improve operational performance, enhance service quality and optimize the costs to the final consumer, paving the way for a smarter grid across Romania. The first EUR 120 million loan of a EUR 210 million facility agreed with the European Investment Bank will help Electrica to better cater the energy needs of our 3.8 million customers in the years ahead and support green transition in Romania”, said Corina Popescu, CEO of Electrica.
“The European Investment Bank is committed to strengthening support for high-impact energy investment in Romania. We are pleased to agree our first ever financing with Electrica Group to support transformational investments to enhance the capacity of Romania’s power distribution network, addressing increasing demand, improving the quality of electricity supply and supporting long-term decarbonisation targets”, said Christian Kettel-Thomsen, European Investment Bank Vice President, responsible lending operations in Romania.
Enhanced energy financing under EIB’s Energy Transition Package
The new EIB loan will finance up to 75% of eligible investment identified by DEER. This is above the normal EIB 50% financing limit and reflects enhanced engagement in regions benefiting from the Modernisation Fund under the EIB’s Energy Transition Package.
Upgrading electricity distribution across Romania
The new investment will modernise the electricity distribution, reduce power losses and improve overall network reliability in Prahova, Dâmbovița, Buzău, Brăila, Galați, Vrancea, Brașov, Mureș, Covasna, Harghita, Sibiu, Alba, Cluj, Sălaj, Maramureș, Bistrița-Năsăud, Bihor and Satu Mare.
Connecting new customers and harnessing green energy
Upgrading the Electrica’s electricity distribution will allow the connection of more than 180,000 new customers and enable the long-term integration of renewable energy in Romania.
Furthermore, the deployment of advanced meter will contribute to a more efficient network operation.
Investing in energy to support sustainable development in Romania
The new Electrica network investment backed by the EIB will increase provision of affordable reliable and modern energy (SDG 7), support inclusive and sustainable economic growth (SDG 8) and climate action (SDG 13).
The European Investment Bank has provided more than EUR 1.2 billion for energy investment across Romania since 1991.
Distribuție Energie Electrică Romania (DEER), part of the Electrica Group, is the most important national electricity distribution operator, covering 18 counties, representing 40.7% of the Romanian territory. With a tradition of more than 120 years, DEER provides services to over 3.8 million users, through a distribution network of approximately 198.988 kilometres.
Since 2014, after the IPO, Electrica Group has become the largest investor in the upgrading and retrofitting of electricity distribution networks, with a total of RON 4.39 billion invested. As a result of these investments, the quality of the services offered by the distribution companies within the Group has improved significantly, contributing also to the solid financial results.