EIB supports diversification of natural gas sources and private sector in Greece

Greece-Turkey natural gas pipeline interconnection, expansion of uptake and throughput of the Revithousa terminal for liquefied natural gas, and partnership with Emporiki Bank.

The European Investment Bank (EIB), the European Union's long-term financing institution, is providing a total of EUR 95 million in support of the diversification of natural gas sources and the small and medium sized enterprises (SMEs) in Greece. The three relevant finance contracts were signed yesterday and today in Athens by Mr Gerlando Genuardi, EIB Vice-President.

EUR 45 million go to the Public Gas Corporation of Greece S.A. (DEPA), in charge of the high-pressure gas transmission system, for enhancing the country's natural gas supplies.

EUR 22 million is for the construction and operation of an 85-km long gas transmission pipeline that will link the Greek and Turkish national gas systems between Komotini in Greece and Kipi at the Greek/Turkish border. The purpose is to import natural gas from Caspian and Middle East sources through Turkey, in order to satisfy growing demand, improve the supply security to the country, and to provide capacity for the potential future transit of gas to neighbouring countries. In this sense the project offers potential benefits to the wider European market, given the possibility to make further pipeline connections in the future between Greece and Italy, or Greece and the South East European countries. The project is, therefore, by decision of the European Parliament and the European Council, classified as a priority Trans-European Networks Energy project of European interest (priority axis Natural Gas Caspian/Middle East/EU).

EUR 23 million is for expanding the liquefied Natural Gas (LNG) terminal on the island of Revithoussa, near Athens. It comprises mainly the implementation of pumps and vaporisers to enhance the receiving and send-out capacity of the Revithoussa terminal. LNG is currently supplied to the terminal from Algeria.

Operation for both projects, seen as strategic moves for the development of the gas network in Greece, is scheduled for the 2d half of 2007. Environmental Impact Assessment (EIA) studies, foresee no adverse implications to the environment.

The large-scale use of natural gas as a source of energy is relatively new to Greece. Construction of the basic infrastructure commenced in 1992 and the main high-pressure network was completed gradually during 1996-2000. Initial gas sales began in 1997.

Natural gas is currently imported from Russia through the Greek-Bulgarian border and from Algeria. Within Greece, the current basic transmission and distribution system comprises the main pipeline, which begins at the Greek-Bulgarian border and extends to Attiki in the south of Greece and Komotini in the north-east.

Established in 1988 with the purpose of introducing natural gas into the Greek energy market, DEPA is in charge of the importation, transport and sale of natural gas to power producers and other large consumers, gas supply companies and users of natural gas as transportation fuel. It has three Greek subsidiary companies formed for the purpose of gas distribution in the areas of Attica, Salonica and Thessalia. 65% of its capital of EUR 990 million is held directly by the Greek State.

EUR 50 million go to the Emporiki Bank of Greece S. A. (Emporiki), as part of EIB's efforts to intensify its support for Small and Medium size Enterprises (SMEs) in Greece. The EIB funds, provided to Emporiki in the form of a global loan, will be targeted primarily towards investments in industry, tourism and services. This is a follow-up operation with Emporiki, after a EUR 50 million signed in 2003 has been fully utilised. Emporiki, the fourth largest bank in Greece, is a long-standing partner of the EIB, also through relevant participations in guarantee syndicates relating to EIB's financing of major infrastructure projects. Emporiki lending expansion in recent years has been one of the most dynamic in the Greek system, focusing in particular for SMEs. Clients are primarily serviced through its extensive 373-branch network, which provides wide geographic coverage of all local areas outside Athens.

In 2005, the EIB provided a total of some EUR 895 million for projects in Greece, mainly for transport and energy.

Projects signed in 2005: a total of EUR 895 million