Romanian electricity utility group Electrica (BVB: EL), with the state as the main (but not majority) shareholder, is planning to issue in 2025-2026 one or more "green" or "sustainable" bonds with a total envisaged value of EUR 500 million and to open a EUR 620 million credit facility.

The company's shareholders are invited to endorse management's plans on November 8, Bursa.ro reported.

The distribution networks in Romania (out of which Electrica's is the largest) need total investments of EUR 1.2 billion per year until 2050, according to the "Grid for Speed" study commissioned by Eurelectric, the association of the electrical industry in Europe.

The four Romanian electricity distribution operators in Romania filed investment projects worth RON 16.7 billion (over EUR 3 billion) for partial financing under the Modernisation Fund. The need for co-financing from own sources is proportionally large. Electrica's investment budget for this year is RON 1.1 billion (EUR 220 million).

The bonds planned by Electrica can be denominated both in local currency (lei) and other currencies and can be issued in the capital market of Romania or on a foreign market based on a flexible structure with a fixed or variable interest rate. The maximum maturity of the bonds will be up to ten years, to be sold through an offer addressed to institutional investors.

Electrica shareholders will also be asked to endorse management's plan for contracting a syndicated credit facility worth up to RON 3.1 billion (EUR 620 million) and the creation of related guarantees.

Electrica is a key player in the electricity distribution, supply, and production market in Romania, as well as one of the most important players in the energy services sector.

The volume of electricity distributed was 17.05 TWh last year, down 3.8% y/y. Its electricity distribution arm, DEER, serves approximately 3.93 million users in an area covering approximately 40.8% of Romania's territory.

Electrica's consolidated revenues edged down slightly to RON 13.3 billion (EUR 2.66 billion) in 2023.

Its market capitalisation reached RON 4.8 billion (EUR 0.96 billion) after its shares rose by 47.5% over the past year. The company distributed dividends from last year's profit resulting in a 0.83% yield.

iulian@romania-insider.com

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