Financed ProjectsTransbalkan II

Identification Code:

OP/01/0261

Total Operation Cost:

116.094.000

Maturity:

144 months

Operation Status:

Description and Purpose of the Operation:

After a successful completion of phase I - the construction of a new compressor on the existing Ananyev-Izmail gas pipeline at Tarutino, BSTDB participates in phase II of the Trans-Balkan Gas Pipeline Project, which involves the financing of the engineering, procurement, construction and commissioning of approximately 75 km looping natural gas pipeline on the Southern Ukrainian section of the Trans-Balkan Gas Pipeline for increase of existing gas capacity.

Countries of Operation:

Ukraine (100,00 %)

Financial Product:

Loans

Sector:

Utilities

Domain:

Private

Borrower/Client:

Gastransit is a limited liability company established by Gazprom (Russia), Naftogas Ukraine (Ukraine), Turusgas (Turkey) and Transbalkan (Turkey) as shareholders.

Co-Financiers/Participants:

1. European Bank for Reconstruction and Development (EBRD) 2. HypoVereinsbank (HVB) 3. Agricultural Bank of Greece (ABG)

Guarantors/Sponsors:

Developmental and Regional Cooperation Impact:

(a) Cooperation Impact: Project Company is the joint venture between Ukrainian, Turkish and Russian corporate entities. As a result of the Project, Russia will increase gas deliveries to and transit through Ukraine, Turkey, Romania and Bulgaria. (b) Country and Sector Strategy Conformity: The Project is fully in line with the BSTDB energy sector strategy calling for the priority of the cross-country energy infrastructure projects. (c) Economic Development Impact: (i) Increase in the net gas supply to Turkey by around 1.6 -2 billion cm per annum; (ii) Transit of the new quantities of gas will result in the overall incremental transit fee revenues for Ukraine. (iii) increased transit fees for Romania and Bulgaria (iv) Tax revenues for Ukrainian State (vi) demand for equipment and construction services, materials in Russia and Ukraine. (d) Financing Mobilization/Additionality: The Project will allow to expand and reinforce further close and fruitful cooperation with EBRD. (e) Environmental Considerations: The Project is consistent with the BSTDB environmental policy related to neutral impacts during operation.

Environmental Classification and Impact (summary):

The Project is consistent with the BSTDB environmental policy related to neutral impacts during operation. Development of a clearly defined environmental management system is part of the environmental action plan. Mitigation measures to reduce the impacts of construction works have been taken into consideration. The impact of the pipeline during operations is limited to emergency situations. The design of the pipeline includes special provisions to ensure safe operations and to minimize the risk of accidents. After a successful completion of phase I - the construction of a new compressor on the existing Ananyev-Izmail gas pipeline at Tarutino, BSTDB participates in phase II of the Trans-Balkan Gas Pipeline Project, which involves the financing of the engineering, procurement, construction and commissioning of approximately 75 km looping natural gas pipeline on the Southern Ukrainian section of the Trans-Balkan Gas Pipeline for increase of existing gas capacity

Operation Leader:

Energy & Infrastructure

E-mail:

ei@bstdb.org