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 Chisinau, in a joint effort to strengthen Moldova’s energy security, a press release informs on Tuesday.
The EIB and the EBRD are each lending EUR 41 million and the EU is providing a EUR10 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 decision of our partners at the EBRD, the EIB and the EU to support the Moldovan government in the construction of the Ungheni-Chisinau gas pipeline is very important to our country as it is a vital step towards ensuring the country’s energy security and overcoming the situation where we are dependent on one source to supply the population with energy. Furthermore, the implementation of this project will allow us to connect to the EU energy system which will ensure energy stability for a long period of time and promote free competition on the market,” Octavian Calmic, Moldovan Deputy Prime Minister and Economy Minister, stated.
The project will complete the connection of the gas transmission systems of Romania and Moldova by linking Chisinau, a major area of gas consumption in the country, to the interconnector between Iasi and Ungheni.
“It was built in 2014 to enable Moldova – a country which is more than 90 percent dependent on energy imports – to diversify its energy sources. The EU provided a EUR 7 million grant for the interconnector,” the release reads.
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.
“The EU fully supports this project which is of strategic interest to Moldova. It will reinforce the energy security of the country and contribute to increasing the competitiveness of the Moldovan energy market to the benefit of all citizens,” EU Ambassador to Moldova, Pirkka Tapiola, said.
Additional support comes from the Swedish International Development Cooperation Agency (Sida) which has provided nearly EUR 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 EUR 1 million grant financing from its own funds to support the implementation of the project, including legal and regulatory assistance.