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IFC and EBRD Commit $50 Million in Financing to Private Moldovan Electricity Companies


EBRD contact in London:
Anton Usov        

Phone:  (+44 20) 7338 6640

E-mail:  
UsovA@ebrd.com        
IFC contact in Washington:

Afshin Molavi

Phone:  (202) 458-5674

Fax:  (202) 974-4384

E-mail:  
amolavi@ifc.org


Washington D.C., November 20, 2001—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, and the European Bank for Reconstruction and Development (EBRD) will each lend US$25 million to three recently privatized Moldovan electricity companies to support a plan to strengthen and expand current distribution networks and achieve greater efficiencies in the electricity sector.

The three Moldovan electricity companies – “Retelele Electrice Chiºinãu” S.A, “Retelele Electrice Centru” S.A, and “Retelele Electrice Sud” S.A – are majority owned by Unión Fenosa, one of Spain’s largest utility companies.  The Moldovan companies were acquired by Unión Fenosa Internacional, S.A. in an early 2000 privatization auction.  The companies supply electricity to approximately 720,000 retail customers in Moldova.


The IFC/EBRD financing – part of a five year expansion and rehabilitation effort of the three companies – will support Unión Fenosa’s program of improving existing assets to increase reliability and reduce technical losses, upgrading and installing meters to improve billing and collection, and installing new systems to improve customer services.


Mr. Francisco Tourreilles, the Director of IFC’s Power Department, said: “This investment supports the Government’s efforts to improve the efficiency of the Moldovan power sector.  The project, one of the largest foreign investments in the country, will be critical in ensuring access to reliable electricity service for almost three quarters of a million customers in Southern and Central areas of Moldova.”


Mr. José Manuel Prieto, General Manager of Unión Fenosa International, said: “This highlights the recognition accorded by two of the most prestigious international financial institutions to the Unión Fenosa Group's international activities and, in practice, is fundamental support for the much-needed development of infrastructure in the Republic of Moldova that is being undertaken by the Unión Fenosa Group.”


EBRD Infrastructure Business Group Director Johan Bastin said: “Successful
implementation of this project will have a great demonstration effect and act as catalyst for foreign investors in Moldova.”  It also offers an opportunity, in coordination with the Government and the National Energy Regulatory Agency, to pursue sustainable sector development, which would represent the successful culmination of sector reform and privatisation, he added.


IFC has played an active role in Moldova since the country became a member of the Corporation in 1995.  Since then, IFC has approved financing for investments in telecommunications, agribusiness, and financial services, as well as technical assistance projects in banking, tourism, wineries, food processing, and leather industries.


The EBRD loan comes on top of an 18.6 per cent stake taken by the Bank in the utilities last summer.  The EBRD has now invested €117.5 million in 23 projects in Moldova with a total cost of €301.9 million.


The EBRD aims to foster the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States. It is owned by 60 countries, the European Investment Bank and the European Union. Visit the EBRD’s website:
www.ebrd.com

IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries.  IFC’s committed portfolio at the end of FY01 was $14.3 billion.