The EBRD is investing €60mn for a 10% stake into South Eastern Energy Capital (Sencap), a joint venture that will invest in southeast Europe to revamp run-down energy infrastructure. The improvements will benefit people in the region who continue to suffer from power cuts.

By supporting the establishment of Sencap, the EBRD is encouraging competition in the southeastern European  energy sector, which will lead to much needed investment in the energy sector.

The capital will allow Sencap to purchase, develop and operate power and energy infrastructure assets in the south-eastern European  energy market covering Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Former Yugoslav Republic of Macedonia, Montenegro, Romania, Serbia, including Kosovo.

Nandita Parshad, EBRD’s director for power and energy, says: “Underdeveloped and dilapidated energy infrastructure is hampering economic development in the region. Similar investments are important to maintain an equilibrium of energy supply throughout the region, especially considering the expected strong growth of demand.”

Sencap will use funds from the EBRD and other sponsors to build up its asset base in the region. There are over 20 energy projects in south east Europe in need of urgent investment. The EBRD investment complements the commitment of €540mn in equity capital of Sencap’s founders, the Public Power Corporation, the largest electricity utility in Greece, and ContourGlobal, a New York-based investment company.

Since 1991, the EBRD has invested €7.6bn in southeast Europe, 14% of which in the energy sector.