Nabucco pipeline gets funding boost

Financial institutions take the first step to agreeing a multi-billion euro support deal.

The Nabucco pipeline, which would bring gas from the Caspian to central Europe, recieved a major boost today when three international financial institutions took the first step to agreeing a multi-billion euro financing deal.

The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the International Finance Corporation (IFC), which is part of the World Bank, today (6 September) signed a mandate letter for the Nabucco project. This step is the start of the appraisal process that should lead to the organisations providing around €4 billion in financing for the scheme.

The letter sets out the conditions under which the organisations will carry out their appraisal and gives an indication of the potential level of financing.

A joint statement issued by the three organisations said that their involvement in the Nabucco project was a “demonstration of global and European support for the project”.

The signing of the letter was welcomed by the European Commission, which said in a statement that it reflected the strong commitment for Nabucco and was an “important step towards its realisation”.

RWE, the German energy company that is a member of the Nabucco consortium, also welcomed the news. Stefan Judisch, chief executive of RWE Supply and Trading, said the signing of the letter was “another clear signal to supplier countries that Nabucco has the full political support of Europe and the international community”.

The Nabucco pipeline is expected to be operational by 2014 and to transport 31 billion cubic metres of gas a year.