Oil & Gas

EU, EIB and EBRD to support Romania – Moldova gas interconnection

In a joint effort to strengthen Moldova’s energy security, the European Union (EU), the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) are providing a EUR 92 million financing package for the construction of a natural gas pipeline from Romania to Chişinău.

The EIB and the EBRD are each lending EUR 41 million and the EU is providing a EUR 10 million grant.

The funds will be extended to Î.S. Vestmoldtransgaz, a state-owned company which will build and operate the gas pipeline and the Romania – Moldova interconnector.

The project will complete the connection of the gas transmission systems of Romania and Republic Moldova by linking Chişinău, a major area of gas consumption in the country, to the interconnector between the eastern Romanian city of Iaşi and Ungheni, a Moldovan town on the Romanian border.

It was built in 2014 to enable Republic of Moldova – a country which is more than 90 per cent dependent on energy imports – to diversify its energy sources.

The EU provided a EUR 7 million grant for the interconnector.

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

Additional support comes from the Swedish International Development Cooperation Agency (Sida) which has provided nearly €600,000 for a comprehensive feasibility study conducted by the engineering consultancy Fichtner GmbH to assess technical, market, regulatory, economic and environmental and social aspects of the project.

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

The EIB is committed to supporting Moldova following the June 2014 signature of the EU-Moldova Association Agreement, which includes a Deep and Comprehensive Free Trade Agreement (AA/DCFTA). This agreement will lead to much closer political and economic ties with the EU within the framework of the Eastern Partnership.

Moldova is one of the countries that most benefited from EIB loans per capita in the Eastern Partnership Region. The EIB lending portfolio, being well balanced and covering all important sectors of the country’s economy, has reached almost €700 million since signing the first EIB loan in the country in 2007. The gas interconnection project is one more successful example of cooperation in Moldova between the EU, the EIB and the EBRD which together have been supporting numerous projects such as the Moldovan Road Rehabilitation Programme, Chișinău trolleybuses, and rehabilitation of water utilities.

 

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