Regional Factbooks

SUMMARY
Romania's economy is currently in transition from a 'command' economy to a market driven economy.

At present, the energy sector is characterized by:

• The scale of co-generation plants for urban heating,
• The extensive use of coal-fired installations for power and heating generation systems
• Use hydroelectric power plants and potential for strong development in this sector,
• Nuclear energy provision from the Romanian/Canadian Cernavoda plant

The National Electricity Company, CONEL is responsible for electricity transmission, and is also the system and market operator.

CONEL also owns 100% shares in the following three affiliates:

1. S.C. Termoelectrica S.A., for electricity and heat generation in thermal power plants,
2. S.C. Hidroelectrica S.A., for electricity generation in hydropower plants, and
3. S.C. Electrica S.A., for electricity distribution and supply.

The nuclear activities have been separated from the National Electricity Company (CONEL) and the Nuclearelectrica National Company has been established.

PETROM is the National Oil Company, active in both downstream and upstream businesses. It is responsible for extracting Romanian crude oil output.

ROMGAZ, the National Gas Company, is responsible for developing the national strategy within the natural gas field and has as a major scope of activity in production, geological research for the discovery of natural gas reserves, the storage, transmission, dispatching, import, international transit and distribution of natural gas.

The whole economic and technical operation and development of the electricity sector is regulated, ruled, supervised and monitored by the National Electricity and Heat Regulatory Authority (ANRE), set up by an Emergency Ordinance in October 1998 as a public institution, independent and autonomous.

The electricity sector in Romania is under a process of transition from a monopolist structure to a competitive energy market in order to ensure safety in electricity supply, quality of electricity supply, efficient use of fuel, direct market relations between producers, energy/services suppliers and customers.

The primary legislation referring to the electricity sector comprises: The Mining Law, the Petroleum Law, the Water Law as well as other Government Ordinances.

In the following months, the Government is planing the restructuring/privatization of ROMGAZ, the Romanian public utility for gas exploitation, processing and distribution, PETROM, the National Oil Company and CONEL, the National Electricity Company. Romanian demand for equipment and services that are related to the energy sector is expected to witness a significant increase over the next years. Some of these increases will be linked to the above-mentioned restructuring/privatization programs.

I. MARKET HIGHLIGHTS & BEST PROSPECTS

Market Profile

Energy Resources in Romania (%)

	1985	1990	1995	1999
Natural gas	42.4	41.0	40.0	37.0
Crude oil	35.0	37.0	29.6	32.6
Coal	17.0	14.0	14.5	15.2
Hydro+nuclear	5.6	8.0	15.7	15.2

Despite significant Black Sea oil reserves the major part of these have yet to come on stream, and the historical oil fields now require higher investment in chemical production catalysts than the operators have accepted. For the time being therefore, Romania has become a net-importer of crude oil and gas due to obsolete equipment and a slow-down of investment in exploration and production.

Oil and gas exploration opportunities in Romania are extensive.

The total gross consumption of electricity in 1998 was 53.4 TWh, representing about 65% of the 1989 total gross consumption, while the total heat production in 1998 was only 47% compared with 1989. This is a consequence of a reduction of heavy industry consumption - in line with falling production particularly in the steel industry, also the effects of the introduction of energy efficient technologies.

From January 1 until July 31 1999, Romania exported 1.1 million KWh of electricity, three times the export volumes in the same period of 1998. Romania's electricity production in the first seven months of last year amounted to 29.6 billion KWh. The electricity was largely dedicated to the economic sector, 67% of the total volume.

The energy sector in Romania is supervised currently by the Ministry of Industry and Trade.

The National Electricity Company, CONEL is responsible for electricity transmission, system operator and market operator and owns 100% shares in three affiliates:

• S.C. Termoelectrica S.A., for electricity and heat generation in thermal power plants,
• S.C. Hidroelectrica S.A., for electricity generation in hydropower plants, and
• S.C. Electrica S.A., for electricity distribution and supply.

PETROM is the National Oil Company, active in both downstream and upstream businesses. It extracts the entire Romanian crude oil output.

The whole economic and technical operation and development of the electricity sector is regulated, ruled, supervised and monitored by the National Electricity and Heat Regulatory Authority (ANRE), set up by an Emergency Ordinance, in October 1998, as a public institution, independent and autonomous.

Electrical Power Generation and Transmission Equipment (ELP):

The National Power System had 17,571 MW installed power at the end of 1998, out of which 15,879 in Conel plants, the difference of 1,692 MW being held by auto-producers - 585 and IPPs - 1,107 MW, of which 706 in Cernavoda Nuclear Plant (CNE Cernavoda). The electricity production in 1998 recorded 53TWh, as follows: 55,3% in thermal power plants; 34,7% in hydropower plants; 0,1% in the nuclear plant. Conel's production of electricity represented 78,4% of the total 1998 electricity production.

Termoelectrica holds a capacity of 13887 MW, 61% in coal fired plants and 39% in hydrocarbon plants. 52% of these capacities are based on co-generation and 48% on condensation. The company's heat capacity is of 11,540 t/h steam and of 18,230 Gcal/h. The production obtained is of about 43.7% of the country's electricity production. Termoelectrica is looking for investors to create joint-stock companies or partners to finance investment works in progress. IPPs will be soon created, attracting foreign and domestic capital. To this purpose, several co-generation power plants belonging to Termoelectrica will be examined, with a view to selecting the standard privatization procedure.

 

Installed power structure in Termoelectrica - 1998
Coal-fired power plants	8,254 MW	58.1%
Hydrocarbon-fired power plants	5,833 MW	41.1%
Hydropower plants	109 MW	0.8%

 

The electricity output of Termoelectrica by sources in 1998 (Gwh)
Energy Type	Power output MW	No. Generating stations	% age total production
Coal	13,765	5	37.4%
Natural gas	9,291	25	3%
Hydro-electric plants	9,506	4	25.8%
Oil	3,705	3	10.5%
Renewable	504	9	1.4%

At the end of 1998 SC Hidroelectrica SA had a capacity of 5,803 MW holding installations in 128 plants and 295 units - 15 of which in micro-hydropower plants. The company generates about 33.9% of the country's production. The year 1998 is considered as a reference year for Hidroelectrica: the highest power generation ever since the creation of this sector.
40% of Hidroelectrica's output is from the Iron Gates Hydropower plant.

S.C. Electrica S.A. with its 42 branches is providing distribution and supply of electricity to over 8 million domestic, commercial and industrial electricity consumers countrywide. 34% of the electricity sold in 1998 was at high voltage level, 33% each at medium and low voltage. Electric power sales for different categories of customers:

Industry 29,705 GWh Householders 7,858 GWh Tertiary 3,138 GWh

There are 192 small hydro power stations that are operated by Electrica, with a generating capacity of 152 MW. The total quantity of energy generated by these small hydro power stations during 1998 was 272,498 MWh. In 1998 the overall losses of the distribution network amounted to 5,252 GWh.

Conel's Transmission and Dispatching Division T&D develops a rehabilitation and modernization program on short term. It is meant to replace the 220-400 kV primary and secondary equipment in the main power plants of Iron Gates, Urechesti and Tantareni. Some 400 kV compensation equipment will be installed in order to improve the transmission network voltage control. Maintenance for the 220 and 400 kV network will be made for a proper operation and for lifetime extension.

Number of installations

 

Electric lines
Power (kV)	Length (km)
750	154
400	4,326
220	3,641

Romania is the only country in Central and Eastern Europe to have a nuclear power plant based on Western technology. The national company "Nuclearelectrica" is responsible for nuclear energy generation and for nuclear fuel production.

Nuclear electricity generation will remain state owned.

The National Power System had 706 MW installed power in Cernavoda Nuclear Plant at the end of 1998. The Cernavoda nuclear plant is based on the CANDU - Canadian standards, and incorporates a high percentage of North American equipment (the generators, for instance, are built by General Electric). Romania has its own uranium deposits as well as enriched uranium and heavy water production facilities.

The Regie Autonome for Nuclear Activity is responsible for heavy-water production, nuclear engineering and research.

Oil & Gas Industry and Equipment Market
Petrom is the National Oil Company, active in both downstream and upstream businesses. It extracts the entire Romanian crude oil output, of which about 10% comes from the Black Sea offshore oil fields, as well as 5.3 billion cum of natural gas. Petrom dominates more than 40% of the domestic oil market. At present PETROM is subject to a restructuring and privatization process. Petrom has 450 oil and 145 free gas reservoirs currently in production and produces 100% of Romania's oil and 40% of its gas.

 

Petrom's oil and gas production (1999)
Crude	6,132 th. tons
Gas	5,725 mil cum
Gasoline	159 th. tons

Total oil/gas deposits Proven recoverable reserve estimates

	1999	potential
Oil (th tons)	801	1,377
Gas (million cum)	698	1,805

Oil processing and the oil products downstream have a long tradition in Romania that goes back to the 19-th century. The first refinery in Europe was commissioned in Ploiesti in 1857. The 140 year long tradition in crude oil refinery is acknowledged and appreciated in Europe. The processing capacity is of about 34 mil.t/ann.

Romanian refineries can be divided into 2 broad categories, in terms of capacity and complexity, of which the five largest refineries are the newest and the most complex.

They were designed to produce motor fuels (gasoline, fuel oil), power industry fuels and raw petrochemical materials. The Arpechim and Petrotel refineries produce oils and motor oils. Oils are derived from unselected crude oils through the distillate vacuum hydrogen cracking followed by catalytic dewaxing. Motor oils are obtained from paraffinous crude oils selected through solvent treatment, paraffin removal and catalytic dewaxing.

These refineries are based on a modular design, each module with a capacity of 3.5 mil. tons of crude oil. Their processing capacity can be easily adjusted and restructured accordingly by way of decommissioning one of the modules (Petrobrazi, Arpechim, Rafo). Large refineries and the prevailing secondary catalytic process ensure the depth of the processing process. These refineries are equipped with facilities for catalytic cracking, catalytic reforming and hydro processing of the distilled fractions and also with lagged carbon-producing facilities for processing short residuum (except for Arpechim). Consequently, the distillate output versus crude oil is 65%. The Nelson complexity factor of large refineries is similar with the one of the performing refineries in U.S., Europe and Asia. Petrom owns two of the five major refineries: Arpechim and Petrobrazi.

Petromidia is the most modern Romanian refinery. Designed to process imported heavy and light Iranian crude, Petromidia was built in the late 1970's but modernization expanded the processing capacity to 4.8 million tons pa, up from 3.5 million. The refinery is still state - owned, but the Government is working on privatizing it.

Rafo Onesti is government-owned, it is a modern refinery and has an over-capacity as all the other Romanian refineries. In fact Rafo is teetering on the brink of collapse, having stopped production in March.

The other five refineries are: Vega and Astra in Ploiesti, both private, Steaua Romana Campina, private, Suplacu de Barcau, private and Darmanesti, state owned.

They were designed to produce special products for the traditional domestic and foreign customers.
The Nelson index ranges between 4 and 6. The refineries are connected to the major refineries through pipes that make possible the catalytic processing of the distilled fractions and their supply with raw materials for processing.

The Astra refinery has conquered a secure market in Europe due to its range of naphthenic oils it used to produce. On its own effort the Darmanesti refinery has erected a facility for processing the low grade gasoline for carbon producing and thermal cracking, being the only producer of acicular coke in South-Eastern Europe. The acicular coke is used as raw material for metallurgical electrodes and is in high demand domestically and abroad. The Vega refinery used to be specializing in the solvent and catalyst production necessary for crude oil processing. There are prospects for the latter capability to be upgraded, possibly through outsourcing.

Oil transport is ensured by CONPET SA Ploiesti that operates through a piping network, 4,500 km. long and provided with pumping stations. Currently the crude oil and petroleum products transport systems is considered to belong to the public domain being therefore state owned and operating under the authority of the National Agency for Mineral Resources (NAMR). CONPET's main activity is the transport to refineries of domestic and imported crude oil, condensate and ethane, through pipelines or by tankers, pumping stations and other facilities, 25 operation and maintenance units, as well as storage facilities for approximately 350,000 tons - 2,600,000 barrels. Conpet's transporting capacity is approximately 32 million tons per year (240,000,000 barrels a year) but it presently operates at 60% as a result of the shortage of the imported and domestic crude oil quantities.

OIL TERMINAL SA Constanta receives the imported crude oil and fuel along with the oil products for export. The commercial company has 7 berths in the Constanta harbor, equipped with loading and unloading facilities of the crude oil and oil products, with a storage capacity of 1.12 million tons. The OIL TERMINAL was designed to make it possible to import annually about 24 million tons of crude oil and about 24 million tons of crude oil and 12 million tons of refined oil products.

ROMGAZ is the National Gas Company, having the responsibility of performing the national strategy within the natural gas field and is also responsible for the production, geological research for the discovery of natural gas reserves, the storage, transmission, dispatching, import, international transit and distribution of natural gas.

Although in the last years the natural gas consumption has declined compared to the last decade, due in large part to the reform and restructuring processes, it is estimated that the natural gas would further represent a significant primary energy source for Romania, covering about 35-40% of the total resources. ROMGAZ gives special consideration to the descending evolution of the domestic gas production, as a consequence of the reservoir depletion and the reduction of research-exploration activities. Presently, ROMGAZ imports natural gas from the Russian Federation, the only gas source from abroad.

The underground gas storage capacity will continuously increase and after 2000 the gas quantities extracted from deposits during winter will represent about 10% of the consumption.

ROMGAZ has a vast network of pipes with a total length in excess of 35,000 kilometers. ROMGAZ's output of natural gas declined steadily from a maximum 36.2 billion cubic meters (cum) in 1986 to 13.5 billion cum in 1999. This is around 60 percent of the domestic production, the rest being extracted by the National Oil Company, PETROM. In addition to this, Romania imported a total of 4.5 billion cum in 1998, out of which ROMGAZ took 1.2 billion directly and transported the rest for third parties.

At present, ROMGAZ has in its concession 140 commercial natural gas reserves exploited by means of 3800 wells, which are in advanced degree of exploitation, most of them having an actual recovery factor of more than 65%. ROMGAZ forecasts a continuing domestic fall in natural gas output, due to the advancing depletion of the existing gas fields. Therefore, the focus on their capital investment program, is on increasing the volume of underground storage capacity, which is set to reach 4.6 billion cbm in 2005, up from 1.3 billion cum today. The distribution business has already been divided into two regional branches and the company is slated for privatization, expected to take place next year.

 

Natural Gas Consumption Structure by Sectors (Bcum)
	1996	1997	1998
Industry	12.8	10.5	7.5
Electric power	5.4	3.6	4.8
Household sector	6.2	6.1	6.1
Total	24.4	20.2	8.41

Renewable Energy Sources (RES):

The key to successful development of renewable energies in Romania requires a combination of political commitment and decision making as well as support mechanisms including well defined government targets, technological advances and public acceptance. The total rural population, together with the urban population living in medium-sized towns will be considered as the primary market segment for RES applications (about 61% of a total population of 22.8 million).

RomaniaÆs domestic energy production from coal, lignite, oil, gas and hydropower, covers at present about 70% of the energy needs. The share of RES to the primary energy consumption is 5.3 % (excluding large hydro is only 2.9%, large hydro>10 MW, small hydro 10 MW). The average figure for the European Union is about 4% (including large hydro) with increasing trends in all RES sectors, especially in wind energy. RES project implementation will reduce the dependency on energy imports and consequently improve the balance of payments for the energy sector. Moreover, efforts will primary focus on decentralized RES systems targeting the growing domestic and agricultural energy demand for thermal and power needs.

Solar Energy

Active Solar Thermal Systems: Domestic Hot Water (DHW) solar systems for single or multifamily buildings and for commercial buildings (mainly hotels), drying and swimming pool heating are the most promising applications. Solar DHW systems as Demand Side Management measure for electricity or gas utilities, has gained an increasing awareness all around the world.

Passive Solar Systems: Passive solar systems can be applied only to the building envelope itself. If maximum benefit is to be achieved, bio-climatic principles should be applied at the design stage, so as to ensure adequate sunlight and air penetration in the building. If bio-climatic principles are to be applied in new or incomplete buildings or in retrofitting of buildings within the urban grid, various constraints are posed by the existing built environment, determining the performance of the systems applied. In the case of new settlements, far away from urban areas, or extensions of the city plan in the contours of the urban grid, through ôintegrated building designö, the theoretical performance potential of the passive systems can be obtained, with extremely positive results on the building energy demand and comfort conditions.

Solar Photovoltaics (PV): Under the current situation, a small number of stand-alone PV plants could be developed within a rural electrification program supported by the State as a least cost and effective electrification mode for the rural population, following the conclusion of a demonstration PV program. In the medium term, PV applications for rural electrification could be developed with limited public funds. Other specific applications could be developed on a commercial basis without any public funds.

Small HydroPower (SHP): The most promising applications and priorities are presented below:

• under the current situation Refurbishment of a number of SHP by investing up to about 600 USD/kW installed for plants now being out of operation and lower budget for plants operating significantly under the design output. Expected increase of output by about 150 GWh/y.
• by the year 2000 Refurbishment of the remaining SHP, expecting an additional output of 250 GWh/y. Expected output above 139 GWh/y.
• by the year 2010 Development of new SHP. Update of the existing prefeasibility studies of about 250 plants, with an estimated output of 900 GWh/y. Evaluation and selection of the most attractive for implementation during this decade. Expected development with an output of about 400 GWh/y.

• Grid connected applications on a strictly commercial point of view. The future of these applications depends on the changes of the Romanian cost structure for conventional power generation and/or provision of subsidies.
• Supply of isolated remote area. If there is a political commitment to supply these isolated settlements (i.e. public funding) small wind turbines are an economically attractive alternative in connection with small diesel generators and PV system, where wind resources are sufficient.

• substitution of part of the fossil fuels in existing district heating schemes (wood chips)
• enhanced uses of biomass as industrial fuels (wood chips and logs as industrial fuel for steam or hot water boilers) instead of oil
• improved uses of biomass for new district heating schemes for small towns and villages near the resources, in the countryside, where the population has no access to central co-generation or gas supply
• uses of straw and other agricultural by-products in appropriate biomass boilers for heat supply of farms and small villages (in the medium term)

Geothermal Energy
Applications for geothermal energy can be grouped into three main market segments:

• market for district heating for urban areas and possibly for villages.
• market for thermal applications within the primary, secondary and tertiary sectors
• market for power generation connected to the grid in case of high enthalpy sources.

• mainly in existing district heating supply system in the cities nearby the geothermal fields and in new DH schemes for smaller towns and large villages,
• thermal applications for industrial or agricultural uses.

Best prospect areas are related to: Co-generation equipment, Revamping of coal based power plants, Revamping of Russian built 200 Mw boilers/turbines/, Commissioning of un-finished hydro power plants, Instrumentation, control devices, SCADA systems, software, Services (such as ESCOs), Equipment for electricity distribution, Modernization of refineries, crude and gas pipelines as well as distribution of oil products and gas.

Romania has important manufacturing capacities for power equipment. There are local thermal and hydraulic turbine and generators manufacturers as well as manufacturers of boilers and accessories. In 1988, Romania built 850 MW in thermal turbines, 174 MW in hydro turbines and 2,445 tons steam per hour in boilers. All these facilities were built in the seventies and need updated technologies, thus being an interesting potential market for American companies.

The perception of the quality of U.S. products in general in Romania is excellent, as is the Americans' reputation for being the best partners.

American companies could take advantage of the Romanian determination to rehabilitate the energy sector by selling licenses, know-how and special equipment to existing power equipment manufacturing facilities. U.S firms could also take advantage of Romania's low wages and skilled labor force by forming joint ventures or signing other types of agreements with these plants to produce higher quality/lower priced equipment to be sold to local power facilities or third countries.

Well qualified expertise and capability exists in Romania for export of consulting and engineering services for all types of projects in the energy sector. A significant number of turnkey projects have been performed by these Romanian firms in other countries. We are encouraging American engineering firms to form associations with these firms for work on joint third-country projects.

II. COMPETITIVE ANALYSIS

Domestic Production

Much of the equipment for the local power industry is manufactured in Romania. Indeed, Romania has the capability for designing and erecting complete plants. Equipment and turnkey projects have been exported to countries such as: Turkey, Russia, Ukraine, the Arab countries, China, and other countries with which Romania has relations.

For the hydraulic schemes related to hydropower plants, more than 80,000 tons of equipment, mainly consisting of: plane gates, immersed plane valves, movable raising bridges and actuators, have been manufactured. The best performances for such hydro mechanical equipment have been carried out for the harnessing of the Iron Gates II hydropower plant and for the Danube-Black sea shipping canal.

Potential direct U.S. exports of power equipment to Romania will have to be viewed with the impact of high freight costs and competition with local industry which can still offer comparatively lower prices for equipment that is technically competitive.

Another category of equipment manufactured locally is not up to international standards. These items will have to be imported anyway. Competition could came only from other western companies. The list of this equipment and materials is as follows:

Nuclear equipment; power plant control systems and instrumentation; installations for solid, liquid and gas fuel handling or parts of such installations (such as special pumps, special compressors and high pressure fittings); high and medium voltage breakers; special high voltage transformers and insulated cells as well as parts thereof; conductors and electric insulators; ionic masses; special high alloy steel plates and bars; fero-alloys and other special materials.

3rd Country Imports

Much of the equipment and technologies now in place in the Romanian factories is European origin, purchased in sixties and seventies. The Romanian import market for equipment related to the energy sector is dominated by German, French, Italian companies.

U.S. Market Position

The following U.S. companies are present on the Romanian market: AES, BBI Power, Black and Veatch, Energy Transportation Group, Enron, Fisher Rosemount, General Electric, Halliburton Energy Services, Harza Engineering, Honeywell, Kamine Corporation, M-I Petrogas Services, Precision Castpart Corporation, Raytheon Engineers.

III. END-USER ANALYSIS

The electricity sector in Romania is under a process of transition from a monopolist structure to a competitive energy market in order to ensure safety in electricity supply, quality of electricity supply, efficient use of fuel, direct market relations between producers, energy/services suppliers and customers.

1998, the "National Energy Strategy" was endorsed, that comprises several forecasts like:

• increase of the national primary energy consumption up to about 59-69 million toe in 2020,
• the industry will represent only 50% of the total energy consumption, while the tertiary sector will double in 2020,
• the internal oil and gas production will continuously decline to 6.7 million tons and 18.3 billion cum per year respectively. The fuel imports will increase from 19 million toe in 1995 to 43 million tons in 2020,
• the domestic coal production will stabilize to about 30 million tons per year (20 million tons in 1999),
• the heat demand will increase by 1-1.6% per annum, and
• the power consumption will increase by 2-2.5% per annum.

The Energy Charter Treaty, was ratified by the Parliament in 1997.

The Emergency Government Ordinance (GEO) 29/28 regarding the setting up, organizing and functioning of the National Electricity and Heat Regulatory Authority (ANRE). ANRE is set up in order to create and implement a national-wide regulatory system to ensure an efficient, transparent and stable functioning of the electricity and heat while protecting the interests of consumers and investors.

GEO 63/98 on electricity and heat, promoting a competitive market in the sector in order to meet the population's need for energy and fuel supply, in compliance with the international engagements Romania has assumed through the Energy Chart ratified through the Law 14/1997, as well as the harmonization of domestic regulations with the provisions of the EU directives in the field.

The Law of Concession 219/98.

The Law of Competition, 21/1996, adopted to ensure competition on the Romanian market. The Competition office is set up and is subordinated to the Government.

The main objectives of the governmental energy policy comprise:

• ensuring primary energy supply by diversification of sources and creation of the pipeline infrastructure for transiting the Caspian Oil to Central & Western Europe
• elimination of subsidies for unprofitable mining and closing of inefficient mines
• modernization of power and heat generation, transport and distribution installations
• stimulation of private company participation on the energy market
• elimination of cross-subsidies for heat and electricity
• preparation for EU accession, by adoptiion of the "acquis communautaire"
• participation with East-West energy exchanges (interconnection of the Romanian power grids to the UCPTE)

ROMGAZ
the Romanian public utility for gas exploitation, processing and distribution. The restructuring plan has foreseen the liquidation of the two existing natural gas distribution channels of Romgaz and the establishment of two trade companies instead. The second stage of the plan foresees a spin-off process from Romgaz for some of the component distribution companies. Subsequently, these companies will be up for privatization. The stage is scheduled to start by the beginning of September. The privatization will be done through a share issue, and the company's employees will have priority. However, the state intends to keep a certain control of the privatized companies, by imposing the so-called "golden share".

PETROM
the National Oil Company. The process is planned to have as the next stage, a capital boost that would put a stake of roughly 35 percent into the hands of a strategic investor.

CONEL
Until June 1998, the Romanian power sector was still vertically integrated, with RENEL, the Romanian Autonomous Regie for Electricity, being in charge of generation, transport and distribution of 97% of the total power and 40% of the total heat. In June 1998 the administration of RENEL has adopted a restructuring program, conceived in three steps.
The first step implemented in a Governmental Decree that dictated the division of the nuclear sector into two entities and creation of CONEL, the National Electricity Company.

The main purpose of the second step, which is now under implementation, is creation of a structure allowing competition.

The third step will be the development of an open and market driven electricity sector.

IV. MARKET ACCESS

A long-term strategy with a qualified Romanian partner is recommended, as are experienced country managers with Central European or other developing country experience. Also recommended is that contacts be made with industry and Government. U.S. participation in Romanian trade shows, presence in demonstration projects is highly recommended. Other important strategies could be buying a local firm and using its projects as a base, committing to after-sales service.

Agents and distributors can contribute importantly to a U.S. companyÆs success on the Romanian market. The U.S. Commercial Service, through its Agent/Distributor Service, can help new-to-market U.S. companies find experienced local companies willing to act as agents, distributors or representatives. However, as a general rule, finding a partner in RomaniaÆs complex economic situation requires U.S. companies to invest sufficient time on their own to satisfy themselves that the selected partners are fully capable and reliable. Fortunately, well-qualified candidates exist in Romania. Romanian specialists are educated, have a good understanding of technical matters, and, with a minimal training, can rapidly master new marketing techniques.

Quality, price and payment conditions are the most important factors in determining who will succeed in concluding business in Romania. The Romanian market, like all former East-European markets, is still cash poor. A company's willingness to entertain long-term credit arrangements, possibly barter transactions, and concepts like processing contracts will put it in a better competitive situation vis-a-vis others interested in doing business in Romania.

Special note should be made of the fact that U.S. companies face strong competition from E.U. countries on the Romanian market. Goods from the European Union enjoy an average of 15 percent duty rate advantage over similar goods from the United States. Again, price, payment conditions, and service can offset such effects.

Financing

Most major funds suppliers such as the World Bank and EBRD are present on the market. OPIC offers political risks insurance. There is, also, a Romanian-American Entrepreneurial Fund with a US$ 50 million funding available for local entrepreneurs and joint ventures.

The Romanian Government entered negotiations with the following large financial institutions, which granted their support: IMF, World Bank, International Bank for Reconstruction and Development (IBRD), European Bank for Reconstruction and Development (EBRD), etc.

Since 1990, the World Bank loan commitments to Romania totaled approximately US$2.5 billion. Over the medium-term, the Bank will give a priority to supporting sector programs related to European Union (EU)- accession.

Since 1991, the European Bank for Reconstruction and Development (EBRD) has invested in Romania over US$1.4 billion in 58 projects, making it the country's single largest investor. The U.S. is the largest single shareholder in the bank.

Romania became eligible for U.S. Trade and Development Agency (TDA) program funding in November 1991. Since then, 31 grants (with a combined value of US$9,500,000) have been provided for feasibility studies.

U.S. project financing and insurance can be provided by the Overseas Private Investment Corporation (OPIC), which offers direct loans, loan guarantees, and political risk insurance. In addition, OPIC is currently providing some $60 million in financing and political risk insurance for projects in Bulgaria, Croatia and Romania and there is a strong pipeline of possible finance projects in the region. This program is part of OPIC's effort to support and encourage private sector investment in Southeast Europe in the aftermath of the Kosovo crisis.

The Export Import Bank of the United States (Eximbank) opened for short-term (180 days) coverage for exports to Romania in 1992. Currently Romania is eligible for medium-term and long-term coverage for public sector transactions.

A USG-funded, privately-managed Romanian-American Enterprise Fund was approved in April 1993 and started operations in June 1995. It is capitalized at US$50 million. The purpose of the fund is to promote private sector development in Romania. It has the authority to make equity investments and loans, and offer technical assistance to promote new private initiatives and privatization, with special emphasis on the promotion of small and medium-sized businesses. The Fund may support joint ventures, which match U.S. investors with Romanian partners.

Key Contacts

American Embassy Bucharest Commercial Service Str. Tudor Arghezi 7-9 Bucharest, Romania William H. Crawford, Commercial Attach Dana Dobrescu, Commercial Assistant Tel. (40-1) 210-4042, 210-0495, ext. 342 Fax: (40-1) 210-0690 e-mail: dana.dobrescu@mail.doc.gov

 

Ministry of Industry and Trade Calea Victoriei 152, Bucharest Radu Berceanu, Minister Tel:(40-1) 231-0262; Fax: (40-1) 312-10513 CONEL - National Electricity Company Elena Ratcu, Director, International Relations Department Tel. (40-1) 659-6000/209 Tel./Fax. (40-1) 211-2869

 

33, Gen. Gh. Magheru Blvd. 16-18 Hristo Botev Blvd. Corneliu Soroceanu, Project Manager, Project Implementation Dept. Tel. (40-1) 211-9896, 211-9070, 092 659566 Fax. (40-1) 211-8955 1-3 Lacul Tei Blvd.

 

Hidroelectrica Ion Eugeniu, Director General Tel. (40-1) 311-2474 Lacatusu Viorel, Consilier Tel. (40-1) 303-2519

 

Termoelectrica 16-18 Blvd. Hristo Botev, sector 3 Puiu Gheorghe, Director, International Relations Tel. (40-1) 313-2620, ext. 255, 310-1006, 094-349995 Fax. (40-1) 314-8630

 

Electrica 9, Grigore Alexandrescu Str. Ion Lungu, General Manager Tel. (40-1) 231-2660 Fax. (40-1) 231-2670

 

National Commission for Nuclear Activities Control Address: 14, Bd. Libertatii, Sector 5, Bucharest Dan Cutoiu, President Tel: (40-1) 410-0572 or 410-0572 Fax: (40-1) 411-1436

 

Autoritatea Nationala de Reglementare a Energiei Jean Constantinescu, President Tel. (40-1) 311-2244

 

PETROM - The National Oil Company Calea Victoriei 109, Bucharest Ioan Popa, General Director Tel: (40-1) 212-5006 Fax: (40-1) 312-9635

 

ROMGAZ R.A. - Romanian National Gas Corporation 4, Unirii Street, 3125, Medias Dan Morari, Department Head Tel: (40-69) 210-842 Fax: (40-69) 212489

 

National Agency for Energy Efficiency Corneliu Rotaru, Director General Anca Golita, Energy Expert Calea Victoriei 152 Tel. (40-1) 650-6470, 650-5552 Fax. (40-1) 312-3197

 

Trade Promotion Romexpo Exhibition Center 65-67 Marasti Blvd. Tel. (40-1) 224-1427, 224-3160, ext. 228 Fax. (40-1) 224-0400

Source: US Dept. of Commerce

Demographics & Economic Situation

Source: Factbook.net