The European Investment Bank (EIB) will finance the construction of the Serbian section of a 171 kilometres natural gas interconnector between Serbia and Bulgaria.
The 25 million euro loan from the EIB will enable the diversification of Serbia’s energy supply and strengthen energy networks in South-East Europe. It will also support faster integration of the region into the EU energy market, improve competition and ultimately attract more investment. The EIB loan complements a 49.5 million euro EU grant for this project, which is on the fourth list of Projects of Common Interest.
“The European Investment Bank is supporting the energy transition in Serbia and around the world,” said Lilyana Pavlova, the EIB Vice-President responsible for lending operations in Serbia. “As part of the EIB energy lending policy agreed in 2019, we committed to supporting a few select gas projects already under appraisal, before moving to renewables-only lending from the end of 2021. That is why the EIB is pleased to provide 25 million euro to back the construction of the Serbian side of this interconnector, a priority project for the European Union and the Central and South-Eastern Europe Energy Connectivity (CESEC) initiative, contributing to a strong, prosperous and developing Serbia, a goal shared within Team Europe. With this investment, we confirm the importance of supporting the energy transition in Serbia and the whole region.”
“After the diversification of gas routes, Serbia’s goal is to also achieve the diversification of suppliers,” stated Deputy Prime Minister of Serbia and Minister of Energy, Development and Environmental Protection Zorana Mihajlović. “The Niš-Dimitrovgrad gas pipeline, for which construction should start this year so that the pipeline can become operational by 2023, will enable Serbia to be supplied with natural gas from other suppliers – from LNG terminals in Greece, from the TAP and TANAP gas pipelines that are part of the Southern Gas Corridor and possibly from the Eastern Mediterranean gas pipeline, with gas from the Leviathan field (Cyprus and Israel). The construction of the Niš-Dimitrovgrad gas pipeline will significantly increase the energy security of not only Serbia but also the whole region.”
Indeed, the new development will cater for about 2 billion cubic metres per year and will thus contribute to the diversification of energy sources to Serbia and the wider Western Balkan region, as well as to the creation of trans-European energy networks.
“Investments in infrastructure are of great importance for Serbia, specifically in the energy sector because they contribute to the security of gas supply and the diversification of supply routes and suppliers,” added Serbian Minister of Finance Siniša Mali. “The Serbia-Bulgaria gas interconnector is very significant in this context and we, therefore, express our gratitude to the European Investment Bank for helping us to conclude the financial arrangements for this project today. These kinds of projects normally contribute to higher economic growth, which is particularly important amid the fallout of the coronavirus pandemic. That is why Serbia has provided substantial funds for the public investment budget, which has reached a record level of 7.2 per cent of GDP.”