The Bank’s investment will finance the company’s liquidity needs to cover for 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 so as to cope with integration of additional renewables generation.
The transaction is part of the EBRD’s Resilience and Livelihoods framework, which supports companies and countries affected by the war on Ukraine.
DEER is a Romanian electricity distribution network operator fully owned by Electrica, the leading energy utility in Romania. 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.
EBRD Regional Head of Romania and Bulgaria Mark Davis said: "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.”
Electrica’s Chief Executive Officer Alexandru Chirita said: "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. 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 in 508 projects in the country.