Wednesday, April 23, 2014

Drew EGC Report

Bulgarian Link Brings Nabucco Funding Issues to Forefront

Bulgaria and Turkey plan to build a pipeline linking the two countries’ natural gas grids.

The countries are proposing an interconnector between their gas transport systems. The link, which would facilitate  gas purchases by Bulgaria from Turkey, would later become the first operational section of the Nabucco gas transit pipeline.

Bulgarian Prime Minister Boyko Borisov said that the gas interconnector between is the first step towards the diversification of gas deliveries to Bulgaria away from Russian supplies.

However Bulgaria wants the EU to provide 65 million euros towards the project.

Borisov said the country's finance minister wouldn't sanction a loan to build a 47-mile pipeline to connect to Turkey because of the consequences for the Bulgarian economy.

"We have to find money for Nabucco," he said.  The EU has pledged to give 200 million euros to the pipeline.

Pipeline Loans to Be an Off-Budget Item

Bulgaria has said that it will ask the European Union to allow hundreds of millions of euros worth of loans to build its section of the Nabucco natural-gas pipeline to be an off-budget item.

“If Nabucco is really an EU priority, then countries building the pipeline shouldn’t be sanctioned for excessive budget deficits, which will be fuelled by the funds they spend on Nabucco,” said Borisov.

"We have coordinated our positions on Nabucco with Turkey and Georgia. If we take a loan to build the gas pipeline to Turkey, this means that we will have to add hundreds of millions of EUR to our budget deficit."

"If what I have heard from all EU member states' leaders that Nabucco is a priority, we will be asking the EU for funding specially for that so that we don't suffer any losses," he was quoted as saying.

The European Commission, the EU’s executive arm, has given Bulgaria until the end of 2011 to bring its budget gap within the bloc’s limit of 3 percent of gross domestic product.

The Cabinet of the EU’s poorest country by per-capita GDP plans to narrow the shortfall to 2.5 percent next year from 4.8 percent in 2010, after the recession eroded revenue.

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