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    Greece-Bulgaria Pipe Banks Funds


The Greece-Bulgaria interconnector is now set for building work with shipper, loan and construction documents in the bag.

by: William Powell

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Greece-Bulgaria Pipe Banks Funds

The energy ministers of Greece and Bulgaria signed financing and other documents related to the Interconnector Greece Bulgaria (ICGB) October 10, ready for the "full mobilisation for the construction of the gas interconnector," the operator ICGB said.

Temenuzhka Petkova and Konstantinos Hadzidakis signed the intergovernmental agreement, declaring "continuous support for the project" and stabilising the tax regime of the pipeline for the next 25 years, the "entire exploitation period." The base terms of the agreement have been approved by the Bulgarian government and confirmed by the Greek tax authorities, meaning only ratification is needed.

ICGB officials also signed contracts confirming the financial structure of IGB and settling relations with gas shippers and selected contractors for supply of pipelines and construction, the Greek companies Corinth Pipework and Avax.

The two also signed a €109mn ($118mn) reciprocal loan agreement with the European Investment Bank (EIB). The loan will be secured by Bulgarian Energe Holdings backed by a state guarantee. The contracts with the selected subcontractors – the Greek companies Corinth Pipework Industries and Avax were also signed.

During the official ceremony, binding contracts were also signed with the shippers who have reserved capacity in the pipeline. A long-term commitment has been arranged with the companies Bulgargaz, Greek Depa and French Edison who will provide gas transportation services, including gas through the Southern Gas Corridor, to the Bulgarian market. The actual transfer will start after the IGB gas pipeline is put into commercial operation, with a planned deadline for the end of 2020, which coincides with the schedule for the completion of TAP. 

The shareholders of the project company BEH and IGI Poseidon signed an updated shareholder agreement, which adopted the final IGB business plan and the final budget for the construction of the gas connection. They also signed a decision approved by the General Assembly of ICGB for the capital increase of the project company by €42.4mn.