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EIB, EBRD, EU back construction of Moldova-Romania gas link

EIB, EBRD, EU back construction of Moldova-Romania gas link Iasi-Ungheni gas pipeline. Author ( License: all rights reserved.

CHISINAU (Moldova), December 20 (SeeNews) - The European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the EU are together providing a 92 million euro ($96 million) financing package for the construction of a natural gas pipeline which will bring gas to Moldova's capital, Chisinau, from Romania.

"The project will complete the connection of the gas transmission systems of Romania and the Republic of Moldova by linking Chisinau, a major area of gas consumption in the country, to the interconnector between the eastern Romanian city of Iasi and Ungheni, a Moldovan town on the Romanian border," the EIB said in a press release on Monday.

The EIB and the EBRD are each lending 41 million euro and the EU is providing a 10 million euro grant. The funds will be extended to state-owned  Vestmoldtransgaz company, which will build and operate the gas pipeline and the Romania-Moldova interconnector,  the EIB added.

The interconnector was built in 2014 to enable Moldova, which is more than 90% dependent on energy imports, to diversify its energy sources. The EU provided a 7 million euro grant for the interconnector.

The new 120 km pipeline will have a diameter of 600 mm with a capacity of 1.5 billion cu m per year.

As part of the new financing package, the Moldovan government has agreed to implement a comprehensive reform package to promote the liberalisation of the country's energy market and strengthen competition in the sector.

“The pipeline will enable Moldova to buy gas from EU markets and will promote measures that will help foreign gas suppliers enter the Moldovan market. This will allow the country to diversify its energy supplies and will strengthen competition in the sector,” Dimitri Gvindadze, head of the EBRD’s office in Chisinau, said in the press release.

Additional support comes from the Swedish International Development Cooperation Agency which has provided nearly 600,000 euro for a comprehensive feasibility study.

The EBRD is also providing 1 million euro grant financing from its own funds to support the implementation of the project, including legal and regulatory assistance.

The Iasi-Ungheni gas pipeline was inaugurated on August 27, 2014. At the moment, Moldova imports some 1.1 million cu m per year through the pipeline. Once the extension works to Chisinau are completed, it will be able to import some 1.5 billion cu m per year, according to data from the Moldovan economy ministry.

($=0.9575 euro)