The investment will enable CFR to restructure its balance sheet by repaying its short-term liabilities. This will free money for vital investments and maintenance works aimed at improving the quality of the railway network.
'The EBRD loan is linked to CFR reform plans - to improve corporate governance and the quality of rail infrastructure and services - and will help to put the company on a more sustainable footing,' said Jean Marc Peterschmitt, Managing Director for Central and South Eastern Europe at the EBRD. 'Our financing aims to allow CFR to focus on investments for development.'
The loan, to be disbursed in two tranches linked to concrete reform measures will specifically support corporate governance reforms which complement and reinforce the measures promoted by the International Monetary Fund (IMF). The bank's loan will also finance an independent review of the railway operator's current practices and will assist in developing a detailed restructuring action plan - a key element of the EBRD-supported reforms.
The EBRD has previously invested in upgrading railway stations in Romania's five major cities, Cluj-Napoca, Iasi, Constanta, Craiova and Timisoara, and financed modernisation of CFR's electricity distributor, CFR Electrificare.
Previously, the EBRD has invested about 500 million euros in the Romanian transport infrastructure sector. Overall, since the beginning of its operations in Romania, the Bank has committed about 6 billion euros in over 300 projects in the financial, corporate, infrastructure and energy sectors, mobilising additional investment of about 11 billion euros.
