Investments in the energy sector, slowed down or put on hold

Alina Toma Vereha

Petre Stroe, Managing Director of "EGL România" considers that the year 2009 will be tough for energy producers as well. The budgeted earnings and expenses have been built around certain numbers that will most likely be adjusted due to a drop in consumption. Companies that fail to meet their turnover goals, won"t have enough money left for the investments scheduled for this year. Mr. Stroe said that "EGL" has big plans to become a major player on the electricity market as well, helped by its investment budget of around 160 million Euros for this year: "Because of the crisis and the drop in consumption, we are in no hurry to start our investment projects. We are eyeing both greenfield and brownfield investments in gas and wind based energy production. Our most advanced projects are those in the wind energy sector, for which negotiations are currently in an advanced stage, in the Craiova region. We are not ruling out hydroelectric energy production". The crisis, together with the drop in consumption has slowed down "EGL""s growth pace, but the crisis may still bring acquisition opportunities and interesting projects in this sector, Petre Stroe said.

• The crisis "settles" energy prices

The Managing Director of "EGL România" concluded that this crisis will "settle" energy prices at fairer levels and will cull the weak players from the market, by eliminating "fly-by-night" operators as well as traders that aren"t present on the energy markets.

Petre Stroe said that "the projects that have been discussed will probably go forward but at a slower rate, most likely because consumption has become lower as well. Those that have not been launched, will wait for a more favorable time and more attractive funding opportunities. It is certain that we need new production facilities because the ones currently active are causing pollution and use old, ineffective technologies".