EIB supports gas supply improvements and diversification in Europe with the EFSI guarantee
OREANDA-NEWS. The European Investment Bank (EIB) is lending EUR 50m to Transgaz, the national gas transmission company of Romania, to finance the construction of a new European gas transmission corridor to increase security of gas supply and to reduce energy dependence by making it possible to diversify gas supply routes and sources. This operation is backed by the European Fund for Strategic Investments (EFSI) under the Investment Plan for Europe (IPE).
The new pipeline represents the first phase of the Romanian section of the gas pipeline from Bulgaria to Austria via Romania and Hungary (BRUA). The Transgaz-Brua Gas Interconnection project, estimated to cost over EUR 500m, has been awarded a grant of EUR 179m by the European Commission under the Connecting Europe Facility (CEF). This facility, established in 2013, is a key EU funding instrument to promote growth, jobs and competitiveness through targeted infrastructure investment at European level. It supports the development of high performing, sustainable and efficiently interconnected trans-European networks in the fields of transport, energy and digital services.
The EIB funds will finance the construction of a 478-km natural gas transmission pipeline between Podisor and Recas and the construction of three compressor stations located in Podisor, Bibesti and Jupa in Romania.
EIB Vice President Andrew McDowell commented: “This strategic project implemented under the Investment Plan for Europe will interconnect the South-East and the Central European gas transmission infrastructure and eliminate the dependence of South-Eastern European countries on a single gas supplier. It will improve the security of supply for these countries, opening up access to potentially cheaper gas, and delivering improved price convergence and transparency, consequently reducing consumer vulnerability. It will have a significant impact on employment, creating some 4 000 to 5 000 jobs during the construction phase and 300 to 400 positions during the pipeline’s operation.”
European Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “Thanks to support from the Juncker Plan, the European Investment Bank is providing EUR 50m to Transgaz to build a new 478-km gas pipeline from Bulgaria to Austria via Romania and Hungary. This important cross-border project will increase competition, which is good for the consumer. It will also bring thousands of jobs to the region, which is the fundamental objective of the Juncker Plan. Combining EFSI financing with funds from the Connecting Europe Facility helped the project get off the ground. I would encourage other project promoters to look into the possibility of combining different sources of financing for their investment projects.”