Washington, June 28, 2005 —
The International Finance Corporation, the private sector arm of the World Bank Group, recently signed an agreement in Washington, D.C., to invest Euro 31 million to support the privatization of Distrigaz Sud, the leading gas distribution and supply company in southern Romania. In one of the first privatizations in Romania’s gas sector, Gaz de France was the winning bidder for a 51 percent share. Distrigaz Sud serves nearly a million customers in an area with a population of 10.9 million, including Bucharest
IFC’s investment complements funds provided by Gaz de France to finance an extensive post-privatization program.This effort will modernize and improve the reliability and quality of gas distribution and supply services, reduce the industry’s adverse environmental impacts, and help it become a competitive, financially sustainable business. Upgrading Romania’s energy sector is a critical component of the country’s future accession to the European Union. For several years, the Romanian government and the World Bank Group have cooperated closely to reform the sector. The successful privatization of the gas and power distribution networks will promote utility services that are efficient, clean, and affordable.
“We are very pleased to support the privatization of Distrigaz Sud,” said Francisco Tourreilles, Director of IFC’s Infrastructure Department. “IFC’s investment will help ensure the capital investment necessary to upgrade and improve the gas distribution and supply system in Romania. There will also be significant development impact as the investment increases the reliability and quality of these essential services to the company’s customers.”
Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia, noted, “IFC is proud to join a leading international energy company in this important new investment for Romania. We believe that this project, and the initial power distribution project which the World Bank Group is also supporting, will have a strong demonstration effect for new global investors who are considering the privatizations still to come in Romania’s energy sector.”
Jean Francois Carriere, Gaz de France’s Vice President for Central Europe, said, “Our Company welcomes the support of IFC in the acquisition of Distrigaz Sud. We are pleased to partner with a multilateral that shares our commitment to sustainable development.” He added, “We expect that this investment will generate several benefits for Romania through the improved performance of Distrigaz Sud and the transfer of state-of-the-art technology, skills, and training from Gaz de France to Distrigaz Sud and to local equipment suppliers and construction companies.”
The European Bank for Reconstruction and Development is also investing in the privatization of Distrigaz Sud.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
