The European Bank for Reconstruction and Development (EBRD) is providing a RON 278 million (EUR 60 million) loan for the construction of a new gas pipeline between Romania, Bulgaria, Hungary and Austria, as a way to boost the development of regional European energy markets, as a press release informs.
With a total length of 1,318 km, the so-called BRHA gas corridor will offer better interconnection between the countries along its route. It will boost the energy market by enabling new links with major gas infrastructure projects such as the Southern Gas Corridor, through TAP and TANAP, other central European gas hubs and future offshore production sites in the Black Sea.
“The project will also ensure a greater integration of European gas markets and increase the security of supply. Promoting the diversification of the routes and sources of supply, the pipeline will also support the development of local economies and competition on regional energy markets to the benefit of consumers,” the release reads.
EBRD funds will be extended to Romania’s Transgaz which is building the Romanian section of the pipeline.
”This project is perfectly in line with our strategic objectives in Romania. While the cooperation with Transgaz has set the bar very high, we trust further opportunities to support the development of strategic infrastructure in the country will materialise both in the energy and transport sectors,” Matteo Patrone, EBRD Regional Director for Romania and Bulgaria stated.
The total project cost is EUR 479 million. In addition to the EBRD financing, Transgaz is investing EUR 149 million, the European Union is providing EUR 179 million in grants and the European Investment Bank (EIB) is contributing a EUR 50 million loan. The balance will be covered by other lenders.
The first phase of the project includes the construction of a 478 km pipeline between the technology node Podișor near Bucharest and the one in Recaș some 30 km away from Timisoara in the west of the country, as well as auxiliaries, state-of-the-art hardware and software supervisory systems and communication technologies and three gas compressor stations to be placed along the route.
“As one of the currently largest infrastructure projects backed by the European Commission, BRHA is going to bring much-needed connectivity between Bulgaria, Romania, Hungary and Austria. Transgaz attaches high value to the EBRD’s powerful drive to create significant opportunities for the natural gas transmission system operators along the BRHA route that will help bridge the gap between the east-west and the north-south gas corridors,” Ion Sterian, General Director of Transgaz said.
EBRD supported 29 projects in Romania with EUR 546 million of debt and equity investments last year. Of this financing, 93 percent was provided to the country’s private sector.