World Bank: Privatizations in the energy sector should continue

Privatizations in the energy sector should continue, World Bank officials said, during the CEI Summit Economic Forum. They emphasized however that private funding can be secured using other methods as well, such as joint-ventures.

Arntraud Hartmann, interim country manager for Romania with the World Bank, said that privatization will not necessarily mean that all the issues will go away, but over the last 20 years, the partial privatization of the energy sector led to remarkable improvements.

Claudio Zito, CEO of Enel Romania, yesterday said that privatization would be one of the solutions of for the energy sector: "New investments in energy production are needed now, even though the crisis raises certain concerns. New private investments can be attracted by diminishing the role of the state, who should only keep its watchdog function, through privatization and listings on the stock exchange".

The World Bank does not approve the project to restructure Romanian energy production by creating two major companies, which would lump profitable and unprofitable companies together. Arntraud Hartmann claims that this reorganization will not solve the issues of energy companies that are facing financial difficulties: "What can you do with them (ed. note: unprofitable energy companies)? If you want to subsidize them, do so, but don"t lump them together with profitable companies, because you"d harm those as well", the World Bank official said. She feels that these subsidies should be clearly established using the budget, rather than being concealed through a reorganization, using the earnings of the profitable companies to plug the gaps, especially as the energy sector is extremely important for the economy and is still regulated.