Reuters reported that European Bank for Reconstruction & Development and several commercial banks will lend EUR 170 million to Romania to modernize its top power plant.

EBRD said that the loan is part of its plan to invest EUR 1 billion in the new European Union member over the next 2 years, its participation in a EUR 20 billion foreign aid package led by the International Monetary Fund and secured by Romania in March.

Like many power plants in Romania, the coal powered Turceni plant in the south of the country, built under the communist regime, needs cash to upgrade its facilities to meet EU environmental standards.

The EBRD said that the loan program was oversubscribed, suggesting hefty interest among foreign investors to bring cash to Romania, hit hard by the global financial crisis.

Mr Riccardo Puliti head of the EBRD's Energy Business Group said that "There is a steady appetite for foreign investment in Romania."

Still, direct investment from abroad has fallen by 42% on the year to EUR 2.48 billion by the end of May and many market watchers warn that Romania needs to work on solid economic policies to ensure foreign cash returns after the global economy stabilizes.

Commercial banks participating in the loan include Austria's Erste, which owns Romania's biggest bank BCR, as well as Societe Generale, UniCredit and Intesa Sanpaolo. The Black Sea Trade and Development Bank will also participate.

(Sourced from www.reuters.com)