INTERVIEW Romania Economy ministry may remain with 51% stake in most important state company Hidroelectrica

Romanian energy company Hidroelectrica may be listed as early as next year should the strategy establishing two major energy groups, Electra and Hidroenergetica, fail before the end of 2011. Packages of 10-15% of Hidroelectrica shares will be put on offer gradually so that the Romanian state retain a minimum of 51%, Hidroelectrica, general manager Constantin Trihenea has told HotNews.ro in an interview. He said all direct contracts concluded by the company with influential people known locally as „the smart guys” – intermediaries in energy deliveries – have been prolonged.

According to him, ten of these contracts were prolonged through additional acts until next year, while the price increased by an average of 8.5%. In the case of another five contracts, an „arrangement” was made involving a 25% price increase in exchange for longer deadlines. According to HotNews.ro information, that means until 2017-2018.

Hidroelectrica will not be owned by a private majority, the state will retain the majority stake, Trihenea said. He added that the process would be long because the listing would be complete by 2012-2013 the earliest, in the current circumstances.

• For the time being, Hidroelectrica is owned 80% by the Economy Ministry and 20% by Proprietatea Fund. The energy company is considered the most valuable state-controlled Romanian company and expects a profit of about 420 million lei for 2010.

A letter of intention agreed by Romania with the IMF shows that minority or strategic stakes will be sold in the case of energy companies that should be part of the planned Electra and Hidroenergetica energy groups due to unite state-controlled energy companies in Romania. But this would only be done if the strategy to establish the two groups fails before the end of 2011.

Trihenea also said in the interview that in the case of major projects such as the Tarnita-Lapustesti or Islaz plants the Economy Ministry was looking for investors in public-private partnerships. He did not exclude the possibility that these partners be Chinese investors. HotNews.ro has recently reported that big Chinese companies were willing to invest in the Romanian energy sector.