Energy Economy

06 Nov 2020

EU Bank Acquires 25% Stake in Romanian Gas Company

06 Nov 2020  by   

The European Bank for Reconstruction and Development (EBRD) is strengthening energy security in Moldova with the acquisition of a 25% stake in Vestmoldtransgaz.

EBRD invested €20 million ($24 million) as part of a capital increase in Vestmoldtransgaz, the gas transmission company operating the newly built Ungheni-Chisinau gas pipeline.

Vestmoldtransgaz owns and manages a gas pipeline network in western Moldova and provides natural gas transport services. In 2018 it was taken over by Eurotransgaz, a subsidiary of SNTGN Transgaz, the company operating the Romanian natural gas transmission system.

The 120km Ungheni-Chisinau gas pipeline will soon become operational and complete the connection of the gas transmission systems of Romania and Moldova, by linking the capital Chisinau to the Iasi-Ungheni interconnector between the eastern Romanian city of Iasi and Ungheni, a Moldovan town on the Romanian border.

The Ungheni-Chisinau gas pipeline will enable Moldova – a country more than 90% dependent on energy imports – to diversify its energy sources.

The construction of the €90 million pipeline has also been supported by a €38 million loan from the European Investment Bank and an equity investment from Eurotransgaz.

Ion Sterian, CEO of SNTGN Transgaz, said: “In March this year, Transgaz and the EBRD signed a Memorandum of Understanding to support investments in the Romanian energy sector.

“The transaction between the EBRD and Vestmoldtransgaz, Transgaz’s subsidiary in Moldova, underlines the EBRD’s commitment to its partnership with Transgaz and its interest in supporting Transgaz’s strategic investment programme. The programme aims to develop the interconnection of natural gas networks in the region, which will lead to better safety and security of supply, as well as diversification of natural gas sources.

“The EBRD provided support to Vestmoldtransgaz for the environmental and social component of the Ungheni-Chisinau project, making sure that the highest standards were met.”

Alain Pilloux, EBRD Vice President, said: “This connection will enhance Moldova’s energy security by diversifying its gas supply sources, a prerequisite for the country’s successful development. The project also helps integrate Moldova into future major gas infrastructure projects such as the Trans Adriatic Pipeline and gas sources from central European hubs, and links it with Black Sea gas deposits. Greater integration will deliver economic benefits for consumers.”

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