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Wednesday, January 12, 2005

Romania Vows To Speed Up Energy Sector Privatization

The Romanian government plans to speed up the privatization of the energy sector by launching new sales this year and by pledging a swift completion of the deals already agreed, the new Economy Minister Codrut Seres said Tuesday.

Energy sector privatization is seen by investors as a key element of the country's efforts to win European Union membership in 2007, and a proof of the government commitment to market reforms.

The new government, sworn in last month, hopes to conclude by February the talks for the sale of regional power distributors Electrica Oltenia and Electrica Moldova, Seres said.

Last fall, the previous government selected German utility E.On AG for exclusive talks in the sale of Electrica Moldova, and the Czech Republic's CEZ AS (BAACEZ.PR) for talks on Electrica Oltenia.

Another regional power distributor, Electrica Muntenia Sud SA, which supplies electricity to the capital Bucharest, will be offered for sale this spring, Seres said. The government will also launch the sale of three coal and gas-based power producers, he added.

The government will also speed up the completion of privatization for gas suppliers Distrigaz Sud and Distrigaz Nord.

Romanian authorities already signed privatization contracts last year with Ruhrgas, a unit of E.On, for Distrigaz Nord and with Gaz de France (4774.FR) for Distrigaz Sud. However, to complete the transactions the government must pass legislation setting the way gas tariffs are computed in Romania.

Seres said the government will also begin selling a part of the state-owned stake in oil and gas company Petrom SA (SNP.RO) to the company's employees association.

Initially, the government was planning to sell an 8% stake, but Seres said that the association might not be able to afford to buy as much for the moment, and it might buy just an initial 2% stake.

Posted by Iulia Rasoiu : 1/12/2005 10:00:00 am