KazMunayGas, Romanian Government Establish Kazakh-Romanian Energy Investment Fund

The fund was set up in accordance with the provisions of the Memorandum of Understanding signed between the Romanian state and KMGI (former Rompetrol Group), KMGI said in a statement.

The Kazakh–Romanian fund is estimated to reach $1 billion in investments over a period of 7 years. KMGI’s contribution to the fund is $150 million and part of it, namely the contribution of the Romanian state representing $30 million, will also be committed by KMGI.

KMGI owns 80% of the fund's shares, while Romania holds the remaining 20%.

The main priority of the fund represents the development of energy projects, contributing to the Romanian energy sector at large, as well as to the consolidation of the country’s energy security by diversifying the sources of supply for petroleum products and supporting a favorable investment climate in Romania.

KMGI has already identified at least two major projects, with the total amount of investments exceeding $200 million, which can be developed within the framework of the Kazakh-Romanian fund and which will positively impact Romania’s economy, especially through the direct creation of approximately 2,000 jobs, the company said.

One of the projects considered for the joint investment fund refers to the construction of a cogeneration plant on the Petromidia platform, in partnership with Uzina Termoelectrica Midia. The cogeneration plant (combined production of electric power and heat) will have the capacity to provide energy for both Navodari city and the Petromidia refinery. The value of the investment will reach $120 million and it is estimated that the project will be finalized four years after its commencement.

Another project refers to the expansion of the local gas stations network with approximately 80 new locations. The new gas stations will be developed through greenfield investments, the total budget allocated to this expansion is in excess of $100 million.

SAPE representatives have the right to veto investment projects based on grounds involving national security. In accordance with the shareholders structure, SAPE will nominate a member of the Board of Directors, the parties also agreeing to the nomination of a SAPE representative at the level of the Executive Board and the Investment Initiation Committee.

The Memorandum of Understanding between KMGI (former Rompetrol Group) and the Romanian state was concluded in 2013 and stipulates the privatization mechanism of the shares owned by the Romanian State in Rompetrol Rafinare SA and the creation of a joint energy investment fund.

KMGI is owned by the Kazakhstan’s National Oil and Gas Holding, KazMunayGas. The KMGI group has major operations in the fields of refining, petrochemicals, retail and trading on 11 international markets.

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