Bucharest municipality seeks to borrow EUR 100 mln to pay its heating bill

Bucharest City Hall has launched a procurement procedure intending to contract a bank loan of RON 500 mln (EUR 100 mln) to pay off its debts to Termoenergetica – the operator of the centralized heating system in the capital city, Profit.ro reported.

The Government has recently refused to increase the financing for the Bucharest municipality to cover more heating subsidies but increased the borrowing limit for the City Hall under an emergency ordinance.

Termoenergetica is controlled by the municipality, which owes it money as end-user subsidies.

The Bucharest City Hall covers roughly two-thirds of the heating price for those using the district heating system. For this, it now seeks to contract a 3-year loan, with a 3-month drawdown period (with the possibility of extension), with interest calculated at the 3-month ROBOR index plus margin and without other fees. The deadline for submitting offers is December 14.

In the tender book, the municipality cites "the "difficult situation of the centralized thermal energy supply system, as a result of the unfavourable evolution of some interdependent factors of a technical and economic nature".

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