Greece-Bulgaria Link Operator Draws on Loan

Pipeline operator ICGB, which is building the Greece-Bulgaria gas interconnector, has used the first tranche of the €110 ($130)mn loan from the European Investment Bank (EIB), it said August 26. The EIB financing is secured by a guarantee from the Bulgarian state, owner of Bulgaria Energy Holdings (BEH) and was agreed last year.

"This is an unconditional achievement that costs a lot of complex preparation and joint efforts of the project company and the EIB and BEH, as the utilisation of such a resource requires the prior fulfilment of a number of serious conditions," said ICGB.

The total cost of the line is nearly €240mn, the balance coming from shareholders' capital, a state guarantee and €39mn state grant; and a €45mn grant from the European Energy Program for Recovery.

The loan had a number of conditions precedent, including an environmental and social management framework whereby the borrower protects the lender's reputation by ensuring good communications with local communities, awards compensation for adverse effects and so on. An environmental and social monitoring consultant has also been selected to audit the implementation of the environmental and social measures.

The gas pipeline will increase the security of gas supplies and will lead to real diversification of sources, said the company. "We are confident in the success of the project and the achieved utilisation of the first instalment of the loan is a serious and significant progress, which is possible thanks to the persistent efforts of all parties." Among the sources of the gas is the planned 5.5bn m³//yr Alexandroupolis LNG import terminal in Greece, in which Bulgaria has booked some capacity along with its equity.