Last week in Budapest the national company Transgaz succeeded ensuring a grant of about 180 million euro from EU funds needed for the BRUA (Bulgaria-Romania-Hungary-Austria gas transmission corridor) project, but now the company must come up with the rest of the money of a project worth a total of about 600 million euro. The official project cost is of 560 million euro, however, industry pundits consulted by energynomics.ro consider this amount too low. But the real issue is the financing model.
”One of the issues raised by such a financing system is who will pay for this project: The Romanian consumer or the European beneficiaries? It is not clear how will the financing be ensured and who will be charged for it,” told energynomics.ro an industry expert.
While the project is of a strategic importance for both EU and Romania, the latter may have to extra charge the Romanian consumers for covering its cost.
Last year the general manager of Transgaz, Petru Vaduva, was quoted as saying the company will have to issue corporate bonds to cover up to half of the project.
”Transgaz already has a regulated asset base worth about 800 million euro. If it will have to come up with about 400 million euro for BRUA, it would mean upping the asset base by 50%. And if the costs will be charged to the Romanian consumers, the gas transport tariff will have to grow accordingly,” says the quoted source.
As the transport tariff has a ratio of about 20% in the final energy bill to the consumer, growing it by half it would mean Romanian bills will grow by roughly 10%.
”It is not clear if this will happen or not. We will have to see what the financing model chosen will be and who will be charged: The Romanian or the EU consumer,” the source added.
Last Friday the operator of the Romanian gas transmission system Transgaz and the representatives of the European Commission signed an agreement that grants the company Euro 179.32 million for the implementation of BRUA Project – phase 1.
The project is estimated by the company to create approximately 4,000-5,000 jobs during the construction phase and approximately 300-400 jobs for an indefinite period of time. The project is undergoing a process of environmental permit acquisition and conclusion of agreements with the impacted land owners.
