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ICGB sign key agreements for construction of Greece-Bulgaria gas interconnector

Published by , Editorial Assistant
World Pipelines,

During a formal ceremony on 10 October, in the presence of the Ministers of Energy of Greece and Bulgaria, a number of important agreements and contracts for the IGB project were signed, regulating the financing and confirming the business model of the interconnector. Their successful completion is a prerequisite for the full mobilisation for the construction of the gas interconnector.

During the event, the Bulgarian Energy Minister Temenuzhka Petkova and her Greek counterpart Konstantinos Hatzidakis signed an Intergovernmental Agreement between the two countries, which declared continuous support for the project and stabilizs the tax regime of the pipeline for the next 25 years. Confirming a stable tax regime for the entire exploitation period of the IGB pipeline is part of the project's financial model and an element of the final business plan. The base terms of the agreement have been previously approved by the Council of Ministers of the Republic of Bulgaria and confirmed by the Greek tax authorities, with the ratification of the document due next.

Under the patronage of the two ministers, the Executive Officers and shareholders of the project company ICGB signed a number of important agreements and contracts, confirming the financial structure of IGB as well as settling relations with gas shippers and selected contractors for the construction and supply of line pipes for the purposes of project. "The systematic and consistent corporate efforts of the ICGB team, the political will of the governments of Bulgaria and Greece and the strong support of the European Commission helped us finalise the key documents that were signed today. They regulate the model of operation of the gas pipeline and allow progress in carrying out construction activities", noted the Executive Officers of the project company Teodora Georgieva and Konstantinos Karayannakos. They underlined the importance of the project for the actual diversification of gas supplies and said that the successful implementation of IGB would provide new opportunities for the energy markets in the region.

The two signed a €109 million reciprocal loan agreement with the European Investment Bank (EIB). The loan will be secured by BEH and backed by a state guarantee. The confirmation of the financial structure of the IGB pipeline also allows the project company to activate contracts for the supply of line pipes and for the design, supply and construction of the interconnector. The contracts with the selected subcontractors - the Greek companies Corinth Pipework Industries S.A. and AVAX S.A. were also signed during the visit of Minister Hatzidakis.

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, DEPA S.A. and Edison who will be providing gas transportation services, including gas through the Southern Gas Corridor, to the Bulgarian market. The actual transmission 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 shareholders’ agreement, which adopted the final IGB business plan and the final budget for the construction of the gas interconnection. They also signed a decision approved by the General Assembly of ICGB for the capital increase of the project company by €42 400 000. It was announced that the Board of Directors of ICGB was re-elected for a term of 3 years, together with a vote of confidence in the two Executive Officers for the management of the company during the construction and commissioning of the pipeline.

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