EIB allocates third tranche of loan for IGB

Oil&Gas Materials 9 December 2021 13:44 (UTC +04:00)

BAKU, Azerbaijan, Dec.9

By Leman Zeynalova – Trend:

The project company ICGB, which is responsible for the implementation of the Greece-Bulgaria interconnector, received the third tranche of the financing from the European Investment Bank (EIB), the project company told Trend.

Reportedly, the amount of EUR 30 million was granted in early December following an inspection by the EIB of the performed activities for the realization of the IGB pipeline.

“The agreement with the EIB was signed at the end of 2019, securing the final funding for the gas pipeline. The bank provides financing in the amount of EUR 110 million as a loan secured by a state guarantee from Bulgariа. The funds are allocated to the project company in four separate tranches, and before each one ICGB undergoes a thorough inspection of relevant project documentation and visits on site. The tranches are approved for payment only upon proof of quality performed activities and completed deliveries of equipment, in order to ensure full control and transparency in the use of the allocated funds,” said the ICGB AD.

The IGB project enables the transmission of gas and supplies from new sources, making it key to Bulgaria's energy security and part of the national plan for diversification of gas sources. The capacity of the project is 3 billion cubic meters with the option to reach 5 billion cubic meters. Half of the capacity of the interconnector is already reserved, as four of the shippers are completely new to the Bulgarian market. A contract has been signed for the supply of 1 billion cubic meters from Shah Deniz 2 based on a long-term contract with Bulgargaz.

The conclusion of the contract for construction of the interconnector dates back from the end of 2019, as one of the main commitments of the project company in structuring IGB is the obligation to control costs within the approved budget, which will ensure competitive transmission for customers. The delay in construction activities and the approved update of the construction schedule for the end of 2021 are due to objective reasons related to the global coronavirus pandemic and do not lead to direct losses. The established alternative route through the Greek system and Siderokastro provides a temporary solution for servicing the contract with Azerbaijan until IGB is put into commercial operation.


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