Romania’s Electrica borrows EUR 620 mln to invest in distribution and green production facilities

Romania’s energy group Electrica (BVB: EL), active in electricity supply and distribution and currently investing in green generation capacities, announcedit signed a syndicated loan agreement in the amount of RON 3.1 billion (EUR 620 million) to refinance existing loans and finance capital expenditures.

Electrica unveiled on April 29 a RON 1.54 billion (EUR 300 million) capital expenditure plan for this year, out of which RON 480 million earmarked for green production facilities and RON 970 million for its distribution network.

However, over the medium term (2025-2029), the group plans investments of RON 3.7 billion to upgrade its distribution network only. In February, the company approved an investment of up to RON 1.25bn (EUR 253 million) for constructing a wind farm in the villages of Crucea and Pantelimon in Constanța County. This is one of the three projects that Electrica agreed, in 2021, to take over from Monsson Group, controlled by the Romanian-Swedish businessman Emanuel Muntmark.

The RON 3.1 billion syndicated loan agreement was coordinated by Banca Transilvania and Banca Comercială Română as Mandated Lead Arrangers, with Raiffeisen Bank participating as the Sustainability Agent. The agreement includes a credit facility intended for financing eligible green projects and supporting a sustainable business model.

Electrica’s largest shareholder is the state, with a 49.8% stake, followed by NN Group, with an indirect ownership of just over 10% through the pension funds it manages in Romania and Slovakia.

Electrica Group has a market capitalization of RON 4.4 billion (EUR 880 million) after its shares dropped by 2.8% y/y. The shareholders approved the distribution of dividends under a high 87% payout ratio, resulting, however, in a moderate dividend yield of only 1.2%.

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