Romanian Govt, IBRD Cancel $35M From ’06 Loan For Transports

Romania signed in November 2006 a loan agreement with the IBRD, part of the World Bank group, for $180 million, for the financing of the sector project on transports.

The initial loan agreement "stated the deadline for lending is December 31, 2008. through an exchange of letters (…) between the Romanian Government and the IBRD, the two parties agreed to amend the conclusion date for the lending, but only until the March 31, 2009 deadline established by the Bank, while after an evaluation of the funds available through the 2009 budget the adequacy of a new extension would be decided," said the explanatory note of a draft Government decision approving the amendment to the loan agreement for the financing of the transport support program.

Later, the lending deadline was extended to April 30.

Given the current economic conditions and the Government’s request for financial support from the international financial institutions, the IBRD representatives said, within an evaluation mission unfolded between March 9 and 20, 2009, that the lending portfolio needs to be reevaluated in view of potential availability for the sums not used.

The overall cost of the initial project was $225 million, with $180 million as loan from the IBRD and $45 as Romanian contribution.

The project is meant for public infrastructure maintenance activities and is structured in two equal rounds, $112.5 million, respectively for roads and railroads.

The cumulated value of the IBRD payments reached $39.345 end-May 2009 for roads and $12.16 for railroads.

Thus, by the end of May 2009, the overall amount of money transferred from the IBRD reached $51.5 million.

"Based on the project, the IBRD agreed to extend the interval for the lending process unril December 31, 2009. The IBRD delegation confirmed the capacity of the National Railroad Company and the National Roads Company to implement the project and absorb $55 million, respectively $90 million from IBRD loans until December 31, 2009, but only if budget funding is increased," the note reads.