EC approves public support for gas interconnector Greece-Bulgaria

Photo: EPA Commissioner Margrethe Vestager

The European Commission announced on Thursday it has found Bulgarian and Greek plans to support the construction and operation of a natural gas interconnector to be in line with EU State aid rules. The project will contribute to the security and diversification of EU energy supplies without unduly distorting competition.

“We have approved the support measures to be granted by Bulgaria and Greece because they are limited to what is necessary to make the project happen and therefore are in line with our State aid rules,"Commissioner Margrethe Vestager, in charge of competition policy, said.

The measures will support the construction and operation of a 182 kilometres cross-border gas interconnector (called "IGB") between Greece (Komotini) and Bulgaria (Stara Zagora). It will transport 3 bcm/y of natural gas from Greece to Bulgaria by 2021. A potential later phase of the project could increase this capacity to 5 bcm/y and allow physical reverse flow capacity from Bulgaria to Greece.

IGB will be owned by ICGB AD, a 50-50 joint venture between the IGI Poseidon consortium (which includes Edison of Italy and Greek gas incumbent DEPA) and BEH, the Bulgarian gas incumbent.

The total investment cost for the realisation of the IGB interconnector amounts to €240 million. This will be financed through: a direct equity contribution of €46m from the joint venture shareholders; a contribution of €45m from the European Energy Programme for Recovery (EEPR), managed by the EC; a loan of €110m granted by the EIB; and a direct financial contribution of €39m from the Bulgarian State budget via the Bulgarian Operational Programme "Innovation and Competitiveness" 2014-2020 (OPIC). An unconditional state guarantee to be granted free of charge by the Bulgarian State to BEH to cover the €110 m loan from the EIB.

Similar articles