Thursday

28th Mar 2024

EU banks back non-Russian gas pipeline

European and Central Asian leaders gathered in Budapest have given new political impetus to the bloc's Nabucco gas pipeline from the Caspian region, designed as an alternative to the Russian distribution network.

Leaders of the countries affected by the pipeline, which would flow from the Caspian region to Central Europe, on Tuesday (27 January) said they would sign an agreement by 30 June covering the legal and technical aspects of the project, Hungarian Prime Minister Ferenc Gyurcsany, the host of the Nabucco summit in Budapest, told a news conference.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The Nabucco pipeline project got new political impetus but little financial backing (Photo: gazprom.ru)

In addition, the European Investment Bank (EIB) said it is prepared to finance up to 25 percent of the cost of building the Nabucco gas pipeline, so long as the June agreement between Turkey, Bulgaria, Romania, Hungary and Austria goes ahead.

Mr Gyurcsany called on the EU to provide some capital as he said Nabucco should be considered an issue of national security and not just a commercial project.

He asked the EU to provide up to €300 million in non-refundable capital financing to Nabucco and further loans through the European Investment Bank and the European Bank for Reconstruction and Development (EBRD).

The EBRD said it was ready to consider giving a financial contribution.

For its part, the European Commission is later today (28 January) to earmark €250m for the Nabucco pipeline as part of a €5bn stimulus package to use unspent funds for several infrastructure projects, according to draft plans seen by Reuters and the Financial Times.

"I will propose tomorrow for some money to be used for southern corridors, particularly for Nabucco," EU Energy Commissioner Andris Piebalgs said in Budapest, quoted by Bloomberg. "It's cash, but it should be used cleverly to strengthen the ability" for the Nabucco consortium to secure loans for its infrastructure projects, he explained.

Previously Mr Piebalgs was quoted by Reuters as saying that the EU could only provide loans and loan guarantees.

The stalled €10 billion Nabucco project has come back into the spotlight after the recent gas dispute between Russia and Ukraine, affecting millions of people in central Europe in early January.

The pipeline would deliver gas 3,300 km from the Caspian region through Turkey, Bulgaria, Romania and Hungary to a distribution hub in Austria, aiming to provide 5 percent of Europe's gas needs.

But securing enough gas to fill the pipeline has proven to be a daunting task, with Iran not being politically acceptable and Iraq too unstable. Potential suppliers, such as Turkmenistan, Azerbaijan and Kazakhstan are reluctant to sign up until financing is in place and the pipeline has been built.

Russian threat to Nabucco

Another obstacle for Nabucco have been the Russian pipeline projects, such as the planned Nord and South Stream, which threaten the viability of Nabucco, Czech Prime Minister Mirek Topolanek, who chairs the EU rotating presidency, told the conference.

"These routes bypass Ukraine as well as central Europe while maintaining the EU's high dependency on Russia. This is a direct threat to the Nabucco project," Mr Topolanek said.

However, Mr Topolanek stressed that Nabucco is not about being against Russia. There's no antagonism here," he told the conference "We don't want Nabucco against somebody, we want it for us."

Azerbaijan has confirmed that it remains committed to Nabucco and called on participants to move the project forward.

'Swiftly dial back' interest rates, ECB told

Italian central banker Piero Cipollone in his first monetary policy speech since joining the ECB's board in November, said that the bank should be ready to "swiftly dial back our restrictive monetary policy stance."

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Lawyer suing Frontex takes aim at 'antagonistic' judges
  2. Orban's Fidesz faces low-polling jitters ahead of EU election
  3. German bank freezes account of Jewish peace group
  4. EU Modernisation Fund: an open door for fossil gas in Romania
  5. 'Swiftly dial back' interest rates, ECB told
  6. Moscow's terror attack, security and Gaza
  7. Why UK-EU defence and security deal may be difficult
  8. EU unveils plan to create a European cross-border degree

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us