Romania’s government says no bankable PPPs available

Subscribe to our newsletter and get the latest news and business opportunities in your inbox
Romania’s government says no bankable PPPs available

The state secretary of the Public Finance Ministry of Romania, Gabriel Biris, has stated that the low number of public-private partnerships (PPP) projects in the country is not due to the lack of legal framework, but to the lack of banks support.

According to sources he added that the existing laws already allow private investment in infrastructure projects. However, PPP projects in Rumania haven't gained the trust of banks, and consequently they have failed in the financial test.

Biris said:

“We didn’t have until now PPPs, but this was due to the fact that we don’t have legislation. At some point there was signed this kind of PPP, that was to be implemented, but in the end it was not, because it failed the banking test."

In April 2015 we informed that the City of Buzau (Rumania), supported by the EBRD, published an invitation for tenders for the rehabilitation and maintenance of streets and roads in the city of a total length of 53.4 kilometers.

The project involves the design, build, finance and operation (DBFO) of the roads during the 12-year concession contract. Specifically, the project comprise:

  • Design and execute works for the rehabilitation of the roads, over a construction period of three years;
  • Maintain and operate the roads as follows: during the construction period, to maintain and repair roads prior to and after their rehabilitation; and, during the remaining term, provide full operation, maintenance and repair, of all roads under the contract, including regular,  periodic and winter maintenance; and
  • Obtain and provide all funding necessary for the works and services during the construction period, with not more than 80% represented by senior loans, and not less than 20% provided in the form of operator's own equity investment.

The total value of the contract over its 12-year term is estimated at approximately €49 million (US$52), of which total estimated funded cost during the construction period is €22.4 million (US$23.8), with equity contributed by the operator of 20% of funded cost, or €4.5 million. Senior loans for the project are to be provided by international financing institutions, which may include the EBRD, and by commercial banks. Equity is to be provided by the operator.

List of country news

Country news

  • March 18, 2013

    Romania tenders Craiova - Pitesti highway concession

    The romanian public agency, Compania Nationala de Autostrazi has published the tender for a concession contract for the design, construction, financing, operation and maintenance of the highway Craiova - Pitesti (Km 0 +000 - Km 121 185). The tender is a call for Pre-qualification for parties interested in the contract. Read more
  • June 13, 2013

    All 5 consortia shortlisted for Craiova - Pitesti highway concession

    The five consortia that submitted qualification documents for the Craiova - Pitesti motorway concession have been pre-qualified to enter into the competitive dialogue stage with the Compania Nationala de Autostrazi. The documents were submitted and opened on May 8, at the head office of the CNADNR. Read more
  • June 13, 2013

    Shortlist for Comarnic-Brasov motorway concession and financing in discussions

    Representatives of the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) have met with the Romanian Minister delegate for Infrastructure Projects of National Interest and Foreign Investments, Dan Sova and have shown their willingness to finance the Comarnic-Brasov motorway concession. Read more
  • September 10, 2013

    IFC to advise in PPP projects in Romania and Samoa

    The International Finance Corporation (IFC), World Bank, has announced that it will provide advisory assistance to the Municipal Authority of Public Services Regulation of the Municipality of Bucharest to structure a tender for the district heating service of the Bucharest Municipality. The total estimated budget for this project is 1.999.999,00 €. Read more
  • October 09, 2013

    Romania to approve new law on PPP and award road concessions

    The Romanian government sent on Monday, Sept. 30th, the draft of a new Public Private Partnership (PPP) law to the Parliament. This new piece of legislation has been designed to make PPP and concession projects bankable. Read more

Share this news

Join us

In order to get full access to News section, you must have a full subscription. You can check all the benefits of becoming a member and purchase a subscription on our membership page.