E.ON, Enel and Termoelectrica plan power plant in Braila
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Romanian state-owned thermo-power generator Termoelectrica and a consortium formed by Germany’s E.ON and Italy’s energy giant Enel have signed a deal to build a coal-fired plant in Braila.
The new production coal-fired plant, which plans to have a 800 MW installed power capacity, will be built near the operational existing facility which Termoelectrica owns in Braila.
In the joint venture, the state company will contribute using the existing assets of the Braila power plant, while the E.ON-Enel consortium will bring the investment capital. The international consortium will have the majority of the shares in the joint venture, while Termoelectrica stake will be based on the value of its existing assets.
The plant will also be prepared for Carbon Capture and Storage technology. At this stage the partners have signed a memorandum of understanding.
Rompetrol takes over Moldovan energy group
Rompetrol is increasing its presence in the Commonwealth of International States with the purchase of privately-owned MoldInterGaz, an importer and distributor of liquefied petroleum gas (LPG) in the Republic of Moldova.
“Through this take over, Rompetrol Gas is entering an emerging market with approximately 55,000 tonnes per year which can help the expansion of the LPG distribution in the countries where Rompetrol Group is already present,” said Toma Veron, general director of Rompetrol Gas, the division which will administer the takeover.
Rompetrol Gas plans to increase its market share of LPG in the Republic of Moldova from five to 20 per cent.
This year Rompetrol Gas is also investing 13 million Euro in two stations which will store LPG in pressurised steel bottles in Arad and Bacau in Romania.
Rompetrol is a Romanian-based company owned by the Kazakhstani state firm KazMunaiGaz.
Daimler prefers Hungary to Romania
Daimler has snubbed Romania and Poland for its new 800 million Euro Mercedes factory and instead will open in Kecskemet, Hungary. Politicians in Cluj-Napoca and Timisoara excited their constituencies with news of the potential plant coming to their towns in the build up to local elections last June. One of the deciding factors was Romania’s lack of a modern road system.
State plans to seize majority stake in nuclear reactor development
Nuclear-power company Nuclearelectrica is increasing its percentage of the construction of two more nuclear reactors from a minority to a majority stake, angering some of the private partners signed up to the project.
Prime Minister Calin Popescu Tariceanu said the total cost of building reactors 3 and 4 at Cernavoda power station in Constanta county is estimated at four billion Euro, from which Nuclearelectrica will participate 51 per cent.
The Government has changed the negotiation conditions with the six private investors only months before construction is due to begin. Initially, Czech Republic’s CEZ, Romania’s ArcelorMittal, Belgium’s Electrabel [now owned by Gaz de France], Italy’s Enel, Spain’s Iberdrola, Germany’s RWE and Nuclearelectrica were supposed to gain a share package according to investments each were willing to put into this project.
The initial understanding was not that Nuclearelectrica should be the majority shareholder in the new 3 and 4 nuclear reactors of the Cernavoda power plant. The start of the project will be most probably postponed until the seven investors will agree on the new terms of the Government’s decision. Each nuclear reactor will have an installed power capacity of 720 MW and will deliver an electricity of 5.2 TW per year. The initial plan was that the new reactors would start construction in 2009 and operation in 2015 at the latest. The state will finance its increase in the stake from privatisations and loans.
Costs for Transylvanian Motorway likely to rise
Costs for Autostrada Transilvania, the 415 km highway project between Brasov and Oradea in northwest Romania may rise due to changes to the project not foreseen by the initial feasibility study, according to the contractors, US company Bechtel.
“The actual costs of the project may be adjusted if the works performed differ from the initial estimates,” corporate affairs director, Bechtel Romania Bogdan Sgarcitu told The Diplomat.
An annex to the contract stipulates that the final price tag for the project can rise. In 2003 the Romanian Government granted Bechtel the contract for the 2.24 billion Euro project without an open tender in a controversial move which was against EU principles for large public works.
Ex-Transport Minister Radu Berceanu has reportedly said the final amount for the motorway will cost between seven and ten billion Euro.
Short News
Bank Governor: Consumption cool
could benefit economy
The international financial crisis may be having a positive effect on the Romanian economy, according to Mugur Isarescu, the governor of the Central Bank (BNR). The growth in the take up of consumer loans and domestic consumption have decelerated in the first five months of this year after a hike in the rate of growth in 2007. Romania is suffering due to its massive current account deficit which could drive up inflation. But the current account deficit in the first trimester of 2008 registered an increase of 10.9 per cent to 4.84 billion Euro, compared to the surge during the same period last year of 125 per cent on the 2006 figure. However the risk for Romania is that if this global crisis perpetuates, economic growth and investment may slow. The Govenor was still optimistic about a six per cent inflation target for 2008.
Italian insurer makes two
local purchases
Generali PPF Holding has purchased two Romanian insurance companies, Ardaf and Roumanie Assurance International (RAI) from the international private equity group PPF Investments, subject to approval from the authorities. “Romania is a strategic market for us, registering the highest rate growth in the EU,” said Sergio Balbinot, CEO of Generali Group. “This transaction will lead to the doubling of our market share to 11.7 per cent.” Ardaf is active in the general insurances and life insurance sectors and RAI is the leader in the health and travel insurance.
Romgaz to collaborate in Poland and Slovakia with UK-listed partner
UK-listed gas production, appraisal and exploration firm Aurelian Oil and Gas and state-owned natural gas producer Romgaz will collaborate on three projects in Slovakia and two in Poland. Meanwhile Aurelian has spudded the first of its four natural gas wells in Romania, in collaboration with Romgaz, which could supplement gas already produced in Bilca, Suceava county. The first two wells, Frautati 2 and Vicsani 1, are shallow wells where gas is being tested. There are two further wells due for spudding by 1 August 2008.
Gore and Gorbachev invited to
October lawyer summit
The International Association of Lawyers will host its 52nd summit in Bucharest between 29 October and 2 November at Palatul Parlamentului, in the building formerly known as Ceausescu’s People’s Palace. Top invitees include Mikhail Gorbachev and Al Gore. The international organisation is expecting 1,000 lawyers, magistrates and politicians from 110 countries, the majority from the Black Sea region.
Euro funds for SME export
and expansion
European Bank for Reconstruction and Development (EBRD) is providing up to 40 million Euro of senior debt to two banks in Romania for on-lending to small and medium enterprises in the industrial sector to boost their export potential and expansion abroad. The EBRD finance will be complemented by grants of 10.2 million Euro from the European Commission and the Romanian government for technical assistance. EBRD is providing 20 million Euro each to BCR-Erste and BRD-Groupe Societe Generale.
New mobile license: Romtelecom shows interest, UPC does not
Romania’s next mobile operating license could be snapped up by local landline operator Romtelecom, while rival US-owned UPC rules out bidding for the license. Officials from Romtelecom told Ziarul Financiar are “studying the conditions” of the auction. No existing mobile phone company can bid for the license. The price for the newly available frequency will be 1.08 million Euro and the deadline for submitting the offers is 4 August and the winner shall be designated by 8 September 2008.
New luxury watch store for Unirii
Swiss-Romanian firm Chronotime International, which distributes luxury watches in Romania, will open later this year a 100 sqm showroom and product servicing centre on Blvd Unirii in central Bucharest. The new facility will be designed in partnership with watch manufacturer Omega, says Ion Schiau, CEO Chronotime International. “We are also planning to launch a new retail brand of the company that will sell our products,” he adds.
Cenntral bank raises key interest
rate to ten per cent
Last month central bank (BNR) increased its key interest rate from 9.75 per cent to ten per cent. This is the fifth hike operated by BNR since February when the interest rate stood at 7.5 per cent, in an attempt to rein in the boom in consumer credit spending and reduce the high rate of inflation. In May inflation dropped to 8.46 per cent compared to 8.62 per cent in April.
Gas prices to rocket for consumers
by 12.5 per cent
Starting this month Romanians will pay 12.5 per cent more for the gas and 4.4 per cent more for the electricity. The new price for gas will be about 28 Euro/MWh in a move which comes after the energy regulator body (ANRE) has overseen an increase in the price of gas in February 2008 by 8.5 per cent. This rise in prices is due to a global increase of energy resources.
Aberdeen Property Group
buys up Iris Center
Real estate investor DEGI, part of the Aberdeen Property Investors Group, has purchased Iris Shopping Center Titan in Bucharest from Romanian developer Avrig 35 for 140 million Euro. The shopping centre has a gross lettable area of 48,000 sqm and 2,000 parking spaces and has Auchan supermarket as anchor tenant.
Nuclear power build price set to double
The price of the construction of the two new nuclear reactors at existing power station Cernavoda could almost double to four billion Euro, reports Ziarul Financiar. The high costs of steel and equipment and the rising salary expectations of the workforce are blamed by Government officials for the hike. The construction was initially due to start in 2009, but is seeing delays as the Government renegotiates its stake in the deal with private energy companies.
Housing projects rise by one seventh
Housing projects in Romania for 2008 have risen by over one seventh against last year’s figures. In the first five months of this year, Romanians have received 23,257 construction permits for residential buildings by 15 per cent more than in the same period of 2007. The most important areas of development are Bucharest, Ilfov, central south, northwest and northeast.
Austrian DIY store heads to
Bucharest west location
Austrian construction materials and gardening tools retailer Hornbach is opening this month its second store in Bucharest. The Do-It-Yourself store will be located in the Militari area in the west of the capital and is one of the five stores the company has planned to launch this year. Hornbach opened its first store in Berceni, south Bucharest, with a total area of 24,000 sqm and around 120,000 products.
