Bulgaria’s Cabinet approved on December 19 the allocation of 76.2 million leva, or about 39 million euro, in EU funds for the construction of the Greece-Bulgaria gas inter-connector pipeline.
The money will come under the innovation and competitiveness operational programme for 2014-2020, with new gas infrastructure strengthening Bulgaria’s energy security and “optimizing the energy mix” as the country switches to “low-carbon economy”, the Government media office said.
The goal of the Greece-Bulgaria inter-connector, which will cost 240.2 million euro to build, is to provide the necessary gas transit infrastructure for EU’s southern gas corridor, which would ensure the diversification of gas sources for the south-eastern Europe region by providing access to gas from the Caspian Sea region and Eastern Mediterranean.
Bulgaria and Greece signed a final investment decision on the inter-connector pipeline in 2015. Although originally slated to finish by mid-2018, the start of construction work was repeatedly delayed and it is now expected to be completed in 2021.
The release of funds comes a month after the European Commission approved state aid for the project, including the direct financial contribution by the Bulgarian Government.
Additionally, the EC approved the unconditional state guarantee, to be granted by the Bulgarian state, to cover a 110 million euro loan from the European Investment bank, as well as a fixed corporate tax regime that will apply to the pipeline’s operator for 25 years from the start of commercial operations and will be governed by an intergovernmental agreement between Bulgaria and Greece.