European Commission approves state support for natural gas interconnector between Greece & Bulgaria

The European Commission said on November 8 that Bulgarian and Greek plans to support the construction and operation of a 182km cross-border gas interconnector (“IGB”) between Komotini in Greece and the Bulgarian town of Stara Zagora to be in line with EU state aid rules.

IGB will be owned by ICGB AD, a 50-50 joint venture between the IGI Poseidon consortium (which includes Edison of Italy and Greek gas incumbent DEPA) and BEH, the Bulgarian gas incumbent.

The total investment cost for the IGB interconnector, which is designed to transport three billion cubic meters/year (bcm/y) of natural gas from Greece to Bulgaria by 2021, is 240 million euro.

Bulgaria and Greece notified the Commission of certain support measures to ICGB AD, which involves state aid within the meaning of EU state aid rules.

These include an unconditional state guarantee to be granted by the Bulgarian state to cover a 110 million euro loan that ICGB AD will receive from the European Investment bank; a 39 million euro direct financial contribution by Bulgaria via the Bulgarian Operational Programme “Innovation and Competitiveness” 2014-2020; (OPIC) and a fixed corporate tax regime that will apply to ICGB AD for 25 years from the start of commercial operations and will be governed by an intergovernmental agreement between Bulgaria and Greece.

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