Two large local banks (BCR and CEC Bank) and a global financial services giant (Moneycorp) have analyzed at the Energy Breakfast Club the current state of financing for energy at national level and the solutions available to companies active in the field. More than 40 experts participated in the discussions hosted by Cesianu-Racovita Palace on July 5th in the sixth edition of the Energy Breakfast Club organized by energynomics.ro this year.
Valentina Stoica, Head of the Large Clients Division, presented CEC Bank products dedicated to companies, from standard investment credit, to investment credit or credit lines for accessing European funds. SMEs benefit from free counseling in 48 offices to fit the project idea into existing national and European funding programs. The credit line for invesments with European funds has a credit duration of up to 10 years, and the private contribution of the private beneficiaries will be at least 15% of the total project minus grant.
“We are open to any investment project, to the extent that it proves to be bankable,” explained Valentina Stoica. “When the bank analyzes a project, we also take stress factors into consideration, and political and legislative stability have an important influence in adjusting the funding package,” Valentina Stoica explained.
Banks and investors need the energy strategy
Banks and investors in the Romanian energy sector can not make long-term estimates on the energy market in the absence of an energy strategy assumed by the authorities. For this reason, the investment appetite is low, the development of large energy infrastructure projects being deficient, said Oana Mogoi, the coordinator of the Energy infrastructure department within the Romanian Commercial Bank (BCR).
According to Oana Mogoi, both banks and investors need to know what the country is assuming itself as a strategy in order to develop a particular type of project or another. “We see higher generation as a result of renewable energy, we see the coupling of markets and the growth of imports and exports. It is very important for us to base our financing decisions on a national energy strategy that outlines the perspective on how the energy mix, production and consumption will evolve in the long term. We need to understand what Romania wants to achieve in the long run, for example, do we want to export more electricity or do we want to use the oversupply to warm our homes; or which is the correlation between the energy consumption and the development of the industry etc. The development of the energy sector involves important capital investments with long return of investments periods, with financing exceeding 10 years, and one of the basic conditions for granting project funding over a long period of time is legislative stability and observing the principle of non-retroactivity of law enforcement. It is also important that the market provides adequate instruments to ensure the stability of cash flows, such as bilateral trade agreements freely negotiated between parties, derivatives and any other solutions aimed at reducing market risk “, pointed out the BCR representative.
Mogoi added that supporting the energy sector is one of the bank’s strategic lines, but for now, investors are on standby and wait a clear direction for making a decision.
“We analyze many projects for financing, but we only fund those who have the ability to repay in an acceptable time horizon based on reasonable assumptions. We are transparent with our customers and we agree together the business plan hypotheses for creating sustainable and acceptable financing structures for both parties. Most of the time, when we refuse to finance a project, it is because it does not meet the bancability criteria and often we do not find a common understanding with investors on the ability of the projects to generate a certain level of future cash flows to ensure repayment of the requested loans,”, Oana Mogoi explained.
Optimized businesses by correctly managing currency flows
Johan Gabriels, Managing Director of Moneycorp Romania, presented the company’s business model and elements that enable it to offer competitive exchange rates for companies that have an exposure to various currencies.
“Fintech with a human touch” is the motto of Moneycorp, and this means that beside its software, its platform and automated solutions for trading currencies (35 online, and 85 currencies by the phone), the local, dedicated, and specialized team “can listen an understand you and your business for giving the best advice”.
“The cost of an international payment through Moneycorp can reach half the one that you are paying now”, says Johan Gabriels.
How is this possible? For making things clearer, Johan Gabriels explained how the FX market works, and specifically how the exchange rates are established. He pointed that there was a huge difference between of the interbank rates at which the global banks transact currencies and the levels the private clients, the SME’s and the companies have access.
Moneycorp experts are proposing a tailor-made trading plan, with strategies and goals, they assess the client risk appetite, the manage the business’ FX policy.
“With 30 billion euros in transactions a year, in 177 countries, we are placed at a level which makes the global banks interested in working with us, and we can transfer the benefits from these partnerships to our client by offering better exchange rates and smaller fees for the related payments”, he concluded.
Over 45 representatives from AFEER, AGERPRES, APAN, BCR, C Geangu Consulting, CEC Bank, Crosspoint, DACEE, EFdeN, Electroprecizia AG, Elsaco Electronic, EnergoBit, Energonuclear, Eva Energy , Fautech Engineering, Hunt Oil, IM HR, Jereh, Luxten Lighting Company, Medicover, Moneycorp, NRCC, Radu Taracila SCA, Romgaz, Radio România Actualităţi, Alset Energy, Safetech, SCPEE, Suite Home, Tractebel Engineering, Voith Hydro, Volciuc-Ionescu SCA, Zurich Broker attended the presentations and participated in discussions.
The event was organized by energynomics.ro and supported by our partners: ABB România, Safetech.
This year, energynomics.ro aims to organize at least 10 Energy Breakfast Club meetings. The schedule and the proposed themes for 2017 are available in the Energy Breakfast Club dedicated page.