Romanian Economy Overview Investment Projects in Infrastructure

1. Romanian Economy Overview Investment Projects in Infrastructure

2. Romania General Overview Inflation rate % Annual inflation rate In Central and Eastern Europe annual average rate % annual rate dec dec Mth. rate Source: NBR Source: NBR

3. Romania General Overview Ratings Standard & Poor's Ratings Services Long-term foreign currency sovereign credit rating of Romania raised to 'BB+' from 'BB' The long and short-term local currency sovereign credit rating were raised to 'BBB-' and ‘A-3‘, from 'BB+' and 'B' The outlook is stable. Fitch Ratings Long-term foreign currency IDR: affirmed at 'BBB'; Outlook changed to Negative from Stable Long-term local currency IDR: affirmed at 'BBB+'; Outlook changed to Negative from Stable Short-term foreign currency IDR: affirmed at 'F3' Country Ceiling: affirmed at 'A-' (A minus) Moody’s Investor Service Long-term foreign currency: 'BAA3'; Long-term local currency: 'BA1'; Foreign Investments In the last period, more and more companies are interested to invest in the Romanian market, at several economical sectors. The start was given in Bucharest, but this will continue with others big cities: Timisoara, Cluj, Iasi, Constanta, Brasov, Craiova, Oradea. To sustain such a development is needed a very good infrastructure. In 2007 were invested more than 10 billions euros.

4. Main Infrastructure Projects • Highways • Till 2013 will be finished more than 5 highways in all the country which will bind most important cities with the capitals of important UE countries. • Bucuresti – Pitesti – Sibiu – Deva – Timisoara – Nadlac • Bucuresti – Constanta • Bucuresti – Brasov – Targu-Mures – Cluj Napoca – Oradea – Bors • Bucuresti – Giurgiu • Bucuresti – Ploiesti – Focsani • Roads • Will be rehabilitated the most important County roads between the main cities with population over 200.000 habitants. In 2007 were rehabilitated DN1, DN5, DN6, etc. Around the most important cities was stated the contraction of circle roads. • Railways • Bridges • In 2007 were started the reconstruction projects for bridges over Danube (Calafat–Vidin) and Prut (Radauti Prut–Lipcani). • Airports in progress and planned

5. HIGHWAYS PLANNED December 2007

6. HIGHWAYS PLANNED December 2008

7. HIGHWAYS PLANNED December 2013

8. Main Infrastructure Projects in Bucharest • 2.756 km – water distribution network • 2.541 km – sewerage network • 2.947 km – gas distribution network • 1357 km – heating network • 18.565 km – electric network • 13.796 km – telephony network • 368 km – Public transportantion lines • 1820 km – 5340 roads • Passages in construction • Basarab Passage – over the railway, from Blvd. Titulescu to Grozavesti Bridge • Obor Passage – for tramway lines over the crossroads • Baneasa Under Passage – from Bd. Aerogarii to Blvd. Ion Ionescu de la Brad • Colentina Passage – at Doamna Ghica • Piata Sudului Passage • Razaoare Passage • 13 Septembrie Passage

9. Main Infrastructure Projects in Bucharest • Projects started in 2007 • Rehabilitation of more than 3% of the main streets • Modernization of tramway lines (ex. 32, 34, 35, 7, 12, 11, 44, etc.) • changing of the gas conducts medium and low pressure • Rehabilitation of water lines and sewerage • Rehabilitation of Water Cleaning station from Glina – total value 92.989 mil euros • -  ISPA founds (59%) - 55.083.966 EURO-  BERD loan (11%) - 10.000.000 EURO-  BEI loan (27%) - 25.000.000 EURO-  State budget (3%) - 2.905.000 EURO • Objectives: • Rehabilitation and supplementation of the existing water line • Rehabilitation and supplementation of the mud line in concordance with the necessity of the water line • The including of new hoarding tank for collecting the excess rain waters • The demolishment of deteriorated buildings • The installation of new line of water alimentation and sewerage for Glina, Catelu and Manolache villages • Baneasa Airport Renovation

10. Infrastructure Projects - Financing • Financing instruments – non reimbursable founds • PHARE • SAPARD • ISPA • Private financing – from specialized banks for the Public Sector • ex. part of Volksbank Group – Dexia Komunalkredit • Externalization of services – by concession to third part for a number of years (at least 5 or 10) – with the obligation to invest a certain amount

11. Infrastructure Projects • Financing founds from ISPA and SAPARD– more than 250 millions euros per year • rechnical Projects preparation of rehabilitation of Fundulea – Fetesti railway • rehabilitation of Baneasa – Fundulea railway • rehabilitation of Fundulea – Fetesti railway • the enlargement of DN5, Bucuresti – Giurgiu • construction of circle road – Adunati Copaceni • rehabilitation of Highway Bucuresti – Cernavoda • rehabilitation of DN6, Craiova – Drobeta Turnu Severin • construction of circle road to Sibiu, at highway standards • rehabilitation of DN6, Drobeta Turnu Severin – Lugoj • fezability study for circle road Lugoj and infrastructure of access bridge over Danube at Calafat - Vidin • technical assistance for rehalibitation of railway Ungaria - Simeria • Financing found from Phare – more than 60 millions euro • the construction of circle road – Tecuci • bridge reconstruction over Prut at Radauti Prut – Lipcani • ecological project for Danube and transport facilities • cross border point rehabilitation at Calarasi – Silistra for international traffic • rehabilitation DN6, Timisoara – Cenad • maritime infrastructure projects: acquisition of new navigation equipments and new system for traffic management on Danube, twinning • railway infrastructure projects: acquisition of new testing equipments and systems

12. Private Financing – References Infrastructure Projects • Austria’s No. 1 in public finance, Kommunalkredit Austria has been working in partnership with the public sector for many years. • The Kommunalkredit Group operates on an international scale. Its activities are focused primarily on Austria and Switzerland as well as the countries of Central, Eastern and South-Eastern Europe. • Traditionally, Kommunalkredit has always been a partner for Austrian local authorities and municipalities. The growing internationalization of its business, the enlargement of the European Union and the increasing demand for expertise in the development of public financing models have significantly changed and extended Kommunalkredit’s markets. • The product portfolio extends far beyond the “classic” offer of loans and leasing facilities. As a sought-after partner in financial budget optimization, Kommunalkredit provides a whole range of products, comprising receivables purchasing, loan portfolio analyses as well as structured products, all tailor-made to the requirements of the individual client. • The Kommunalkredit Group also cooperates successfully with the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). • Contact Dexia Kommunalkredit Romania • Roxana Lazar • Chief Executive Officer • Bucharest, 42 Calea Dorobantilor, 1st District • Phone: 0040 21 20 19 400 • Fax: 0040 21 20 19 405 • roxana.lazar@dexia-kom.ro

13. Private Financing – References Infrastructure Projects Romanian Railways Ministry of Transport Project: Financing of rolling stock Railway maintenance Closing: 2006 Total size: EUR 144,000,000 Term: 12 years Structure: Loan Function: Lender Tirgu Mures Ivenio, Romania Project: Speed Baler Closing: May 2006 Term: 10 years Total Size: EUR 2,605,000 Structure: Credit Facility Function: Lender

14. Private Financing – References Infrastructure Projects Bucharest – Constanta LineRomanian Ministry of Transport Project: Rehabilitation of railways Closing: 2006 Total size: EUR 100,000,000 Term: 10 years Structure: Loan Function: Lender TAROM (National Romanian Airline)Romanian Ministry of Transport Project: Purchase of 2 aircrafts Closing: 2006 Total size: EUR 71,000,000 Term: 13 years Structure: Loan Function: Lender

15. Private Financing – References Infrastructure Projects City of Bucharest - 2nd District Project: financing infrastructure works, extension of water and sewage network Closing: 2007 Total size: RON 242.600.000 Term: 20 years Structure: Investment loan Function: Lender City of Iasi Project: financing local infrastructure projects Closing: 2007 Total size: RON 200.000.000 Term: 20 years Structure: Bridge Loan + Bond Issues Function: Lender

16. Private Financing – References Infrastructure Projects City of Bucharest-4th District Project: financing infrastructure works, extension of water and sewage network Closing: 2007 Total size: RON 162.000.000 Term: 18 years Structure: Investment loan Function: Lender Sibiu City and County Project: Sibiu Airport modernization Closing: 2007 Total size: RON 140.000.000 Term: 25 years Structure: Investment loan Function: Lender

17. Mures County EUR 4.35 milioane Arad Municipality EUR 5 milioane Giurgiu Municipality EUR 3 milioane Constanta Municipality EUR 10 milioane Iasi Municipality RON 200 milioane Lugoj Municipality EUR 10 milioane Targu Mures Municipality RON 52 milioane Focsani Municipality RON 50 milioane Constanta County EUR 8.6milioane Alba County RON 50 milioane Romanian State EUR 350 milioane Private Financing – References Infrastructure Projects

18. Private Financing from Volksbank Romania • - CITADIN- company from Iasi, part of the Municipality for the acquisition of equipments for roads habilitation and contraction – 1.3 million euro • Hidroconstructia– finance for current activity 11.2 million euros