IMF: Romania To Sell Large Stakes In Key Energy Companies

05.09.2011 By Florentina Dragu

Romanian authorities will make the necessary arrangements to sell “significant stakes” in several key energy companies in the coming months, including nuclear power company Nuclearelectrica and gas pipeline operator Transgaz, an official of the International Monetary Fund said Monday.

"We are focusing particularly on the energy and transport sectors, as these are vital for the economic growth," IMF mission chief Jeffrey Franks told a news conference in Bucharest.

Apart from Nuclearelectrica and Transgaz, Romania will sell large stakes in hydropower plant Hidroelectrica and natural gas producer Romgaz, but also in other state-run companies, Franks said.

"Inefficient and insufficiently capitalized companies are not coping with market conditions. They must be restructured (…).

Together with the government, we will restructure the companies in the railway sector and will bring in private capital," Franks said.

He said Romania and the IMF have reached an agreement on the economic and fiscal policies to be pursued during a EUR5 billion two-year precautionary program that started end-April.

"We've reached an agreement regarding the first review mission. All quantitative criteria have been met and we've also agreed on the policies to be applied next," Franks added.

Joint teams from the IMF, the EU and the World Bank arrived in Bucharest on April 27 for the first review of the follow-up agreement.

Under the new deal, the IMF will disburse Romania EUR3.5 billion, while the EU and the World Bank contribute with EUR1.4 billion and EUR400 million, respectively.