EIB lends EUR 50 mln to Transgaz to finance construction of new European gas transmission corridor

The European Investment Bank (EIB) is lending EUR 50 million 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 500 million, has been awarded a grant of EUR 179 million 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.

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 said: “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. 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 added: “ 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.”

Romanian Minister of Economy Gheorghe Simon added: “ In my capacity as minister, I put my trust in the prospects that Transgaz’s management and the European Investment Bank have opened up.”

General director of SNTGN Transgaz SA Ion Sterian said: “ The finance contract Transgaz signed with the EIB today indicates that we are committed and that the optimal conditions for construction of the BRUA project in Romania are in place under the agreed terms. We expect this financing to have a positive impact both in terms of achieving local and national synergies for the construction and operation of the pipeline and in boosting confidence and solidarity among the European countries set to benefit from the BRUA project.”