Romanian electricity transport company plans EUR 1.2 bln investments in next 10 years

Romania’s state-owned electricity transport company Transelectrica (BVB ticker: TEL) will invest some EUR 1.2 billion in the next ten years, according to its network development plan for the 2014-2023 period which was recently approved by the National Regulatory Authority for Energy (ANRE).

Investments will help increase interconnection capacities with neighboring countries, develop the electricity transport network in the areas where production capacities strongly increased in recent years, such as Dobrogea, and change old outdated equipment in order to increase the efficiency of the network and reduce operating costs, the company has said.

The EUR 1.2 billion investment value does not include new connections to the national grid, which will be paid by the customers that make the connections.

For the 2014-2016 interval, investments are estimated at some EUR 360 million. Part of these investments will be financed through corporate bond issues, but the company also plans to get EU funds.

Last year, the company’s shareholders approved a four-year bond issue plan for a total of EUR 205 million. In December 2013, the company raised some EUR 45 million in its first five-year bond issue. Transelectrica plans to gradually increase maturities for its future issues.

The company, which is now 59 percent owned by the Romanian Government, holds the monopoly for electricity transport through high voltage lines in Romania. The activity of the company and the transport tariffs it charges its customers are regulated by the ANRE.

In 2013, Transelectrica posted a net profit of EUR 45.5 million from which it paid dividends worth EUR 37 million. The company offered one of the highest dividend yields of all the companies listed on the Bucharest Stock Exchange (BVB), of 14 percent (calculated on the 2013 closing price).

Since the beginning of this year, Transelectrica’s share price had a 52 percent increase, which makes it one of the most profitable investments on the Romanian market for the period. At the current price of RON 24 per share, the company has a market value of almost EUR 400 million.

Andrei Chirileasa, [email protected]