Project Dacia equity investment

disbursing

Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed The Board of Directors approved investment of up to EUR 85 million in the form of equity participation (representing up to 20% of the offering) in favour of RCS & RDS S.A. (the Company), to enable the initial public offering of a leading telecommunications company in Romania. Project Objectives The transaction formed a key component of a larger effort to publicly list approximately 27% of the Company on the Bucharest Stock Exchange, enabling expansion of the Company’s investor base.  The transaction in turn contributed to improved transparency, visibility and liquidity of the Bucharest Stock Exchange. Transition Impact The expected transition impact of the transaction was based on its contribution to demonstration of use of new financing methods – the transaction was part of one of the largest domestic initial public offerings in the Romanian telecom and technology sectors on the Bucharest Stock Exchange for some time.  The float was anticipated to increase the visibility of a Romanian corporate in the international capital equity markets, and support the local equity capital market development by enabling additional liquidity to the Bucharest Stock Exchange thereby improving its attractiveness to local and international investors. Additionality The Company was keen for the EBRD to participate in the transaction, best to facilitate the success of the largest private company IPO on the Bucharest stock exchange at that time.  Moreover, the Company felt that EBRD participation in the listing would signal strong confidence to retail and institutional investors contemplating their own participation in the IPO. Environmental and Social Summary Determined to be a Category C transaction, due diligence on the transaction indicated that neither the Company nor the transaction was associated with any significant environmental or social risks.  The Company was found to have practices in line with the EBRD’s Performance Requirements and in accordance with all relevant environmental, labour and occupational health and safety laws.  As part of the transaction, the Company was also required to ensure ongoing compliance with EBRD's Performance Requirements, and to report to the EBRD on environmental and social matters annually. Technical Cooperation None