Bulgartransgaz to Borrow up to 49 mln Euro for Bulgaria-Serbia Gas Link

Bulgartransgaz to Borrow up to 49 mln Euro for Bulgaria-Serbia Gas Link
Τετ, 25 Ιανουαρίου 2023 - 17:29

Public gas grid operator Bulgartransgaz will be able to take out a loan of up to 49 million euro ($53.3 million) from Netherlands-based ING Bank to partially finance the construction of a gas interconnection with Serbia, Bulgaria's caretaker government said on Wednesday

The proposed five-year loan will be guaranteed by the state and is to be agreed between the finance ministry and ING Bank Sofia Branch, the government said in a statement following its weekly meeting. The financing needs to be absorbed by the end of 2023.

The loan will help fund the construction of a new 62 km long pipeline from the existing Bulgartransgaz infrastructure at the town of Novi Iskar to the Serbian border. The project will also require the construction of two automatic gas regulating stations, one gas measuring station near the border checkpoint at Kalotina, as well as two gas pipeline deviations for the town of Slivnitsa and the town of Dragoman. Upon completion, the new pipeline will have a capacity of 1.8 billion cubic metres (bcm) per year, with reverse flow possible.

The planned investment expenditure for building the gas interconnection Bulgaria-Serbia (IBS) totals 76.7 million euro, according to the statement. It will be additionally backed by EU grants through the operational programme Innovations and Competitiveness 2014-2020 and the Connecting Europe Facility as well as through a long-term state-backed loan and Bulgartransgaz own capital. The public company launched a tender for the financing in November last year.

The construction of the pipeline on the Serbian side started in February 2022. Completion of the facility is expected in September. Serbia, which currently receives its natural gas supplies from Russia, began talks with Azerbaijan last year for potentially diversifying its energy sources.

Bulgaria, which is no longer reliant on natural gas deliveries from Russia, already has a gas interconnection with Greece, through which it imports natural gas from Azerbaijan and regasified liquefied natural gas (LNG) from Greek and Turkish terminals.

(SeeNews, January 25, 2023) -