ICPE Electrocond Technologies – Raising EUR 3 million for Building a Micro Hydro-Power Plant
ICPE ELECTROCOND TECHNOLOGIES SA (“ICPE”) had traditionally been an important player in the Romanian energy market, acting as a supplier and distributor of energy and one of the leading national providers of electric power capacitors. Currently, the company has shifted its focus into energy trading, which has become its main business, with plans to expand into the production of green energy.
The company had secured various sites for the development of micro hydro power plants. ICPE approached us to help with this further development. The project that we had been involved with was the development of a 1.8 MW micro-hydro power plant on Sadu River, Sibiu County. We drafted the feasibility study, together with the client’s technical consultants. Our focus was on the financial aspects of the project. The major part of our assignment was to design the right financing structure and, of course, to obtain that financing. We included a grant financing of EUR 3 million, which was approved in early 2012. We drafted all the necessary documents for the grant application and we assisted the client with the project implementation.
In addition to obtaining the EUR 3 million grant for the construction of the plant, we have also obtained a grant of EUR 10,000 to reimburse part of the costs incurred by the company in drafting the feasibility study. This grant was paid via BAS Program, an EBRD initiative.
An essential part of the implementation process was the tendering for the main contractor. We had to follow the Romanian public procurement rules. This public procurement has been a difficult one but the outcome was exceptional. The official audit realised by the representatives of UCVAP (the organisation supervising public procurement processes in Romania) qualified the process as an example of good practice in the field.
The project is almost complete; the plant will soon be operational. The project is expected to achieve an average annual production of electricity from renewable sources of 8,130 MWh. The investment will have significant impact, by improving the electricity supply services in the targeted area, creating 42 new jobs and a considerable reduction in emissions of greenhouse gases.
Another assignment with ICPE was to help them implement an ERP system. They recognise that the current methods used to record their transactions, especially in the energy trade side of their business, is not the most efficient. We worked with the company to design the ERP specifications they need and we also submitted an application for funding 70% of the acquisition and implementation costs for such solution. The project is still in evaluation by the Ministry of Economy.