By Theo Moreni
The European Investment Bank (EIB) is providing the first loan to a corporate in Romania that can be disbursed in local currency; the equivalent of EUR 50m will be granted to Transgaz, Romania’s gas transmission company.
As with the first EUR 50m loan tranche signed in October 2017, the EIB funds will finance the construction of a new European gas transmission corridor to increase security of gas supply and to reduce energy dependence through diversification of gas supply routes and sources. This operation is backed by the European Fund for Strategic Investments (EFSI), which is the main pillar of the Investment Plan for Europe (IPE).
EIB Vice President Andrew McDowell commented: “This is the first EIB loan provided in Romanian Leu to a corporate since the launch of EIB lending operations in the country in 1992. It will enable Transgaz greater flexibility to avoid currency exchange risk in financing gas infrastructure in the region. The project also contributes to the expansion of the number of gas suppliers in South-Eastern Europe and opens the regional market to increased competition which will benefit consumers in terms of reduced prices and improved Security of Supply – both are priorities for the EU and the EIB. At the same time this project is a tangible example of a use of the EFSI guarantee focused on accelerating Europe’s economic growth and job creation.”
Director General of SNTGN Transgaz SA Ion Sterian stated: “I would like to express my satisfaction with the successful conclusion of the European Investment Bank and Transgaz's efforts to create the conditions for signing this new contract. I particularly appreciate the flexibility shown by the EIB and I would like to congratulate the teams that have contributed to this result. For our company, this funding line is part of a set of core measures on which we rely for our major infrastructure projects. I should also emphasise the positive experience gained in the dialogue with the EIB's experts and management and encourage other companies in Romania to consider the EIB's instruments for financing some of the most important directions of the Romanian economy’s development.”
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.