August 25 (SeeNews) - Romanian gas transmission company Transgaz [BSE:TGN] said on Wednesday that the European Bank for Reconstruction and Development (EBRD) has become a shareholder with a 25% interest in its Moldovan subsidiary Vestmoldtransgaz.
The EBRD became a shareholder in Vestmoldtransgaz following the fulfillment of the conditions precedent related to a subscription agreement, Transgaz said in a statement filed with the Bucharest Stock Exchange, BVB.
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Under the agreement, the EBRD undertook to increase the share capital of the subsidiary by 20 million euro ($23.5 million) in order to finance the development costs of the gas transmission pipeline Ungheni - Chisinau.
"The Ungheni-Chisinau gas transmission pipeline, connecting the Moldovan gas network to the European Union via Romania, is an important step towards the geographical diversification of Moldova’s energy supplies. Having invested in a 25% stake in Vestmoldtransgaz, the EBRD is playing a key role in strengthening the country’s energy security and contributing to sustainable economic growth that benefits everyone," EBRD vice-president Alain Pilloux said.
Established in 2014, Vestmoldtransgaz owns and manages the gas pipeline network in western Moldova and provides gas transmission services in the country.
Transgaz took over Vestmoldtransgaz in 2018 through its Moldovan subsidiary Eurotransgaz, for 180.2 million Moldovan lei ($10.2 million/8.7 million euro).
"The Ungheni-Chisinau pipeline is a strategic project for Romania, for Moldova, for Transgaz and now for EBRD as well. We managed to finalize this investment, thus also becoming the first Romanian multinational company in the gas transmission sector, with a contribution to regional energy security," Transgaz director general Ion Sterian said.
The 120 km long pipeline between Ungheni and Chisinau interconnects the gas transmission systems of Romania and Moldova. The pipeline connects Moldova's capital Chisinau to the interconnection pipeline between the eastern city of Iasi in Romania and the Moldovan city of Ungheni, located on the border with Romania.
Shares of Transgaz traded 1.17% lower at 254 lei on the Bucharest Stock Exchange by 1556 CET on Wednesday.
($=0.8509 euro)