ELECTRICA DISTRIBUTION NETWORK UPGRADE II

The project will finance the Promoter's investments in electricity distribution in Romania in the period 2024-2026. The investment programme concerns modernisation of network assets, network expansion, implementation of automation systems, new connections, and metering.

The aim is to modernise and expand the Promoter's distribution network, by supporting its efficient operation, contributing to the integration of Renewable Energy Sources (RES), catering for the connection of new customers, and maintaining or improving the quality of supply.

The programme comprises investments in the electricity distribution network in Romania over the period 2024-2026. It addresses the needs for the renewal of existing assets and planned development, including automation and tele-control. The programme contributes to maintaining or increasing security of supply by reducing the risk of supply interruptions, and it contributes to the integration of low-carbon generation and thus reduces carbon and air pollution externalities.

The investments contribute to achieving EU and national targets, as set out in 2021-2030 National Energy and Climate Plan of Romania. 100% of the programme will benefit Cohesion regions in Romania.

The programme has good economic rate of return and broader social benefit and generates additional employment in construction. The capacity of the promoter is considered appropriate for the proposed project. The financing will also have an important signalling effect in times when energy companies face significant financing needs. Long tenor and flexible financing conditions (drawdown and repayment flexibility) provided by the Bank will help the Promoter in achieving the investment objectives.

The investment programme comprises several electricity distribution schemes with voltages < 220 kV. Some of these schemes may fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (amended by Directive 2014/52/EU), which requires the competent national authority to determine the need for an EIA. Where, and if applicable, the requirements of Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC will be verified during appraisal. The schemes related to automation, telecommunication and metering systems are expected to have limited environmental impact. The environmental and social due diligence will follow the programme lending approach according to the EIB's procedures and standards. It will focus on the Promoter's capacity to implement the programme in line with the EIB environmental and social standards and requirements.

The Promoter shall ensure that contracts for implementation of the project are tendered in accordance with the applicable EU procurement legislation, Directive 2014/25/EU as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.