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January 27, 2022

World Bank suggests the selling of steam power plants

World Bank (WB) and Franklin Templeton officials estimate that the new energy giants in Romania will be faced with financial problems, adevarul.ro reports. Under these circumstances, WB advises the Romanian government to keep the hydropower plants and the nuclear plants and to sell the steam power plants and energy complexes, so the latter will be given a make-over.

The Executive set out to restructure the state energy sector, forming two new companies – Electra and Hidroenergetica. Nevertheless, this restructuring project may not be beneficial for the Romanian energy sector, first and foremost, because it will chase away foreign investors, Doina Visa, senior operations officer for energy affairs within the World Bank, stated.

In her opinion, the fact that hydropower plants are expected to back, out of their profit, investments needed by the steam power plants will lead to a drop in the hydro sector, which is profitable, at present. “The Government speaks of the regional role of these two companies, but we will be, in fact, killing the domestic energy sector,” Visa warned.

The World Bank granted a EUR 74 M-loan to Hidroelectrica to modernize the Lotru-Ciunget hydropower plant. “Now this plant is transferred from Hidroelectrica under the authority of the other company. Who is going to repay this loan?,” Visa wonders, pointing to one instance of the uncertainty reigning at present in the banking sector, as regards the project of restructuring the energy sector.

As a matter of fact, according to a memorandum sent by the World Bank to the governmental institutions in the course of this summer, after a mission to monitor the implementation of the Lotru plant’s modernization project, the restructuring of the energy sector will financially weaken Hidroelectrica, including the Lotru project, for which the Government and Hidroelectrica contracted loans with the World Bank, to rescue some costly steam power plants.

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