August 28 (SeeNews) - Bulgaria is issuing a state guarantee for a loan of up to 215 million levs (122 million/110 million euro) from the European Investment Bank, to be used to finance the construction of a gas interconnection with Greece, the government said on Wednesday.
The loan will be taken out by state-owned Bulgarian Energy Holding (BEH) and must be repaid within 25 years, the government said in a statement after it approved the state guarantee agreement with the the European Investment Bank (EIB) and mandated the finance minister to sign it.
The loan will have a three-year utilisation period.
The total investment in the Gas Interconnector Greece-Bulgaria project is estimated at around 240 million euro, the government noted.
In November 2018, the European Commission said that a state guarantee for the EIB loan will not be in breach of EU state aid rules.
The gas link will connect the Greek gas transmission system in the area of Komotini to the Bulgarian gas transmission system in the area of Stara Zagora.
The planned length of the gas pipeline is 182 km and the projected capacity will be up to 3 billion cu m per year in the direction from Greece to Bulgaria. Depending on interest from the market and the capacities of the neighbouring gas transmission systems, the capacity of the pipeline can be increased to up to 5 billion cu m per year, thus allowing for physical reverse flow from Bulgaria to Greece with the additional installation of a compressor station.
The project is being implemented by the joint venture company ICGB, in which BEH and Greece-registered IGI Poseidon hold equal stakes. Greek public gas corporation DEPA and Italian energy group Edison own 50% each of IGI Poseidon.
(1 euro = 1.95583 levs)