Emergency loan, natural disaster relief to Romania

EIB provides emergency loan of up to EUR 600 million for natural disaster relief to Romania

In response to the catastrophic floods that hit Romania during the summer 2005 the European Investment Bank (EIB) is considering to put in place in close co-ordination with the Romanian Administration an emergency programme in an amount of up to EUR 600 million for the financing of the necessary measures to repair and upgrade the damaged road and rail infrastructure of the country.

During the floods, which started in April/May 2005, infrastructure in some areas in Banat was affected. The July floods hit Oltenia, whereas Moldova was hit by floods in August. The floods in September affected infrastructure in some areas of Dobrogea. Romania has seen already six waves of floods this year. Lately, the events have started to affect the capital of Bucharest.

The envisaged EIB facility complements the various corresponding loans, namely EUR 240 million of the year 2000 and another EUR 300 million (covering damages of floods that occurred in years 2001 until 2004) due to be signed by the end of 2005 for flood damaged roads reconstruction as well as EUR 350 million scheduled for signature in 2006 for flood prevention measures. This combination of several facilities aims at addressing short-term reconstruction measures as well as medium term prevention schemes to avert the obviously increasing frequency of natural disasters occurring in the region and elsewhere.

The envisaged emergency facility will be broken down in two separate parts addressing the respective needs in roads reconstruction and rail rehabilitation. For both transport modes it will cover the necessary rehabilitation works of bridges, river beds, embankments and feeding roads.

The EIB and the Romanian authorities are already in advanced stages of negotiation. This facility is to be seen of forming part of the disaster relief measures of the European Union.

Mr. Wolfgang Roth, EIB Vice-President, stated: “The EIB will support Romania in the reconstruction after the recent disastrous floods being without precedence within the recent decades. In this regard the Bank prepares long-term loans up to 30 years with a ten year-grace period. Under the current situation Romania needs long-term financing that should not be in contradiction to the strict IMF-criteria imposed on Romania recently.”

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