August 31 (SeeNews) - Italian energy group Enel has lent 375 million euro ($374 million) to its Romanian units Enel Energie and Enel Energie Muntenia to cover their financing needs in the context of rising electricity prices and state subsidies scheme for final consumers, Fondul Proprietatea [BSE:FP], a shareholder in the two units, said on Wednesday.
Enel's financing arm - Enel Finance International N.V., lent 250 million euro to Enel Energie and 125 million euro to Enel Energie Muntenia earlier this month, Fondul Proprietatea, who owns 12% of each company, said in its half-year report filed with the Bucharest Stock Exchange, BVB.
In December 2021 and March 2022, the board of directors of the two companies approved to contract from banks a bridge-financing program amounting to 235 million euro for Enel Energie and 255 million euro for Enel Energie Muntenia, respectively, to cover their financing needs.
The shareholder loan from the parent group was necessary because financing needs increased and the banks with whom the companies already concluded financial agreements could not positively respond in a timely manner, the report indicated.
"Starting with the second semester of 2021, the companies are struggling with a crisis situation that hit the entire energy sector following the increase of the electricity prices, as well as due to the enactment of legislative changes which introduce a governmental scheme to support the electricity and natural gas for final consumers until 31 March 2023," Fondul Proprietatea said.
In March, Romania decided to extend a scheme capping gas and electricity bills for households and other consumers, compensating suppliers for the difference, until March 2023.
In Romania, Enel operates on the supply segment through Enel Energie şi Enel Energie Muntenia, on the distribution segment through E-Distributie Banat, E-Distributie Dobrogea and E-Distributie Muntenia and on the production segment, through Enel Green Power Romania.
The group serves about three million customers and employs 3,100 in Romania.
Join our free newsletter Energy in Southeast Europe to stay up to date with the latest in the sector.