EBRD lends EUR 175 mln to Romania’s railway infrastructure operator

Newsroom 28/11/2012 | 15:46

The EBRD is lending EUR 175 million to Romania’s state-owned railway infrastructure operator, Compania Națională de Căi Ferate (CFR) to enable the company to restructure its balance sheet by repaying its short-term liabilities. The loan will free money for vital investments and maintenance works aimed at improving the quality of the railway network, EBRD announced.

“The EBRD loan is linked to CFR reform plans – to improve corporate governance and the quality of rail infrastructure and services – and will help to put the company on a more sustainable footing,” said Jean Marc Peterschmitt, managing director for Central and South Eastern Europe at the EBRD. “Our financing aims to allow CFR to focus on investments for development.”

The loan, to be disbursed in two tranches linked to concrete reform measures will specifically support corporate governance reforms which complement and reinforce the measures promoted by the IMF. The bank’s loan will also finance an independent review of the railway operator’s current practices and will assist in developing a detailed restructuring action plan – a key element of the EBRD-supported reforms.

The EBRD has previously invested in upgrading railway stations in Romania’s five major cities, Cluj-Napoca, Iasi, Constanta, Craiova and Timisoara, and financed modernization of CFR’s electricity distributor, CFR Electrificare.

Previously the EBRD has invested about EUR 500 million in the Romanian transport infrastructure sector. Overall, since the beginning of its operations in Romania, the Bank has committed about EUR 6 billion in over 300 projects in the financial, corporate, infrastructure and energy sectors, mobilizing additional investment of about EUR 11 billion.