The European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation (IFC) signed an agreement in Brussels on Monday with the shareholders of the Nabucco gas pipeline project, MTI reported from Brussels on Monday.
The three banks will start due diligence for loans that could reach EUR 4bn for the construction of the pipeline under the agreement.
Sandor Fasimon, managing director of the MOL group’s Supply and Trading division, welcomed the decision, and said the Nabucco pipeline will guarantee security of supply for the part of Europe that is still lagging behind in terms of infrastructure and the sharing of resources.
The financing line, which the project could obtain from and through the international financial institutions, based on their assessment, comprises the following amounts: EUR 2bn from the EIB, EUR 1.2bn from the EBRD (including EUR 600m directly from the EBRD, and a further EUR 600m accessible via commercial banks), and EUR 800m from the IFC (including EUR 400m from the IFC and a further EUR 400m accessible via commercial banks), the banks’ joint statement said.
The agreement officially specified the banks’ assessment criteria and the possible level of financing.
The statement said the three banks’ participation is a “clear signal that Nabucco has the full political support of Europe and the international community” and constitutes a milestone in securing the total financing for the project. Their support will contribute already in the early phase of the investment to the fact that both procurement and the assessment of the environmental and social impacts will be performed at the highest possible standard.
The due diligence will include assessment of commercial, social and environmental criteria, the statement said.
Following successful conclusion of the due diligence, the final decision will be taken by the institutions’ competent governing bodies. Export credit agencies and international banks can then start their own preliminary assessment processes. Participation of the potential creditors is expected to be confirmed in 2011.
Managing director of Nabucco Gas Pipeline International Reinhard Mitschek said he expected to see a decision on the financing next year. However, participants of the international press conference emphasised that the process is still in its initial phase.
The investment is estimated to cost EUR 8bn and is expected to supply 31bn cubic metres of gas per year from the region of the Caspian Sea to Europe. Construction work is expected to begin in two years and deliveries are scheduled to start in 2015.
The shareholders of Nabucco Gas Pipeline International GmbH, set up in 2004 to develop, construct and operate the pipeline, are: Bulgarian Energy Holding (Bulgaria), Botas (Turkey), MOL (Hungary), OMV (Austria), RWE (Germany), Transgaz (Romania), each with a share of 16.67pc.