The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) will provide by a loan of €41 million to Moldova for building the 120-km long Ungheni- Chisinau gas pipeline. The lending agreements were signed in Chisinau on December 19. The EU supports the project with €10 million worth of grants, IPN reports.

The money will be transferred to the state-owned company “Vestmoldtransgaz” that will build and put into operation the gas pipeline and the interconnector between Romania and Moldova.

“The EU fully supports this project that is of strategic interest for the Republic of Moldova as it will strengthen the country’s energy security and will simultaneously contribute to increasing the competitiveness of the energy market in Moldova, for the benefit of all the citizens,” Head of the EU Delegation to Moldova Pirkka Tapiola stated in the signing ceremony.

EIB Vice President Jan Vapaavuori said the gas pipeline will contribute to increasing the energy security and will support both the liberalization of the domestic natural gas market and its integration into the European energy system.

Dmitry Gvindadze, Head of the EBRD Office in Chisinau, said the gas pipeline will enable Moldova to purchase natural gas from the EU markets and to promote measures that will enable the foreign gas suppliers to enter the Moldovan market. This will allow the country to diversify the sources of energy and to enhance competitiveness in the sector.

The Swedish International Development Cooperation Agency provides additionally almost €600,000 in support for a feasibility study that will be carried out by Fichtner GmbH to assess the technical, regulatory, economic, environment and social aspects of the project. Also, the EBRD offers €1 million grant financing from its own funds in support of the project, including for legal and regulatory assistance.