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Time of allocating last EIB loan tranche to IGB announced

Oil&Gas Materials 9 December 2021 13:55 (UTC +04:00)
Time of allocating last EIB loan tranche to IGB announced

BAKU, Azerbaijan, Dec.9

By Leman Zeynalova – Trend:

The last tranche of EUR 19.9 million by the European Investment Bank (EIB) for the Interconnector Greece-Bulgaria (IGB), is expected to be utilized in the second quarter of 2022, and the amount will cover the cost of equipment supplies, the ICGB AD, the project company, told Trend.

The bank provides financing in the amount of EUR 110 million as a loan secured by a state guarantee from Bulgariа.

Earlier, after a detailed audit, ICGB received approval for the second interim payment from the European Energy Recovery Program (EEPR) grant. The European Commission has officially approved without any remarks the second interim payment of EUR 16,503,254.24, and the funds have already been received by the project company.

A grant in the total amount of EUR 39 million under the Operational Program "Innovation and Competitiveness" (OPIC) 2014-2020 has also been provided for the implementation of the IGB project. The first tranche under OPIC in the amount of EUR 28.5 million was approved in the spring of 2021, and the second approved payment amounts to EUR 8.7 million.

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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