Romanian state-owned gas producer Romgaz plans to spend EUR 268 million (without VAT) to build a new power plant within its Iernut thermal power plant.

The company awarded the contract to Spanish group Duro Felguera and Romanian Romelectro, according to a report sent to the Bucharest Stock Exchange.

The project will streamline Romgaz’s activity by increasing the productivity of the Iernut power plant to minimum 56%. It will also increase the operating safety and will help the company comply with the environmental requirements on the emissions of NOx and CO2.

The project will be financed from the company’s own sources and with funds from the National Investment Plan, according to an updated government decision. The work needs to be delivered in 36 months after the contract enters into force.

Romgaz took over the Iernut plant in 2013 from the thermal power producer Electrocentrale Bucuresti in exchange for deleting a RON 653 million (EUR 145 million) debt.

Romgaz is one of the most profitable companies in Romania. In 2015, the company had a net profit of EUR 270 million and a turnover of EUR 912 million. The company is listed on the Bucharest Stock Exchange and London Stock Exchange and has a market capitalization of over EUR 2 billion.

Duro Felguera is a Spanish company specialized in contracting turnkey industrial projects. Romelectro is a group of Romanian engineering and installation companies in the energy sector.

editor@romania-insider.com