“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 said in a press release Wednesday.
The loan will be disbursed in two tranches linked to concrete reform measures. It will also finance an independent assessment of the railway operator’s current practices and will assist in developing a detailed restructuring action plan.
“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, EBRD managing director for Central and Southeastern Europe.
The EBRD also invested in upgrading railway stations in five major Romanian cities–Cluj-Napoca, Iasi, Constanta, Craiova and Timisoara–and financed the upgrading of CFR’s electricity distributor, CFR Electrificare.
“Previously the EBRD has invested about EUR500 million in the Romanian transport infrastructure sector. Overall, since the beginning of its operations in Romania, the bank has committed about EUR6 billion in over 300 projects in the financial, corporate, infrastructure and energy sectors, mobilizing additional investment of about EUR11 billion,” reads the press release.