WORLD BANK SUPPORTS ELECTRICITY MARKET IN ROMANIA
Contacts
:
Bucharest
Dan Petrescu (40 1) 210-1804
dpetrescu@worldbank.org
Washington
Miriam Van Dyck (1-202) 458-2931
mvandyck@worldbank.org
WASHINGTON, June 13, 2003—
The World Bank’s Board of Executive Directors yesterday approved a 74.3 million Euro (US$82 million equivalent) loan to Romania for the
Electricity Market Project
, which aims to develop a well-functioning wholesale electricity market and improve the efficiency and reliability of the transmission system.
Now that Romania's economic growth is accelerating, pressure on electricity facilities and services is increasing, but raising the necessary investment resources is proving to be a major challenge. Power sector reforms were launched in the late 1990s and substantial progress has been made. However, some fundamental issues remain to be resolved before a well-functioning market can emerge and before the sector can operate within the larger regional and European networks.
The benefits of the project are far-reaching. Along with increased efficiency and reliability for the people of Romania, an improved power system will also attract investments and enhance the competitiveness of the Romanian economy. The project will also help attract and sustain private sector participation in the power sector in line with the Government's road map for energy sector reforms.
Transelectrica, Romania’s national power grid company, will rehabilitate its Fundeni and Iernut grid substations under the investment component of the project. The Fundeni substation is one of the most important bulk supply points for the capital city of Bucharest and serves a very high load density area that requires high reliability and technical performance of quality of supply. The Iernut substation plays an important role in ensuring the electricity supply for the central and northern region of Transylvania (about 20% of Romania’s population). Without this investment component, these two existing substations would not be able to continue to provide reliable transmission service. Power supply to both Bucharest and Transylvania would be severely curtailed with the resulting loss of economic activity and adverse social impacts.
The project’s technical assistance component consists of three parts:
ANRE, Romania’s national electricity regulator will receive assistance to design and implement the regulatory framework for the new electricity trading platform.
This component will also assist ANRE to design and implement a transparent and predictable methodology for setting and adjusting tariffs to be charged by Transelectrica and the power distribution companies for their transmission and distribution services. ANRE’s component of the project will be financed by a 900,000 Euro grant from the EU Phare program;
Romania’s power market operator OPCOM will receive assistance from Electricity Market Consultants to design, test-pilot, and implement the new electricity trading platform through its Power Exchange. Work will also include on-the-job capacity building and technical support to OPCOM and orientation training for ANRE, Transelectrica and other market participants.
Transelectrica will receive assistance for a new electricity trading platform and for other institutional support. The Electricity Market Consultants will, in addition to OPCOM’s Power Exchange, also design, test-pilot, and implement an electricity balancing mechanism for Transelectrica. Consulting services and training will also be provided to Transelectrica in areas such as environment, financial management and interconnections/regional cooperation.
Since Romania joined the World Bank in 1991, Bank commitments to the country total over US$3 billion for 30 operations.
For more information on the World Bank’s work in Romania, visit
http://www.worldbank.org.ro/
-###-