The European Investment Bank granted a loan to GAZ-SYSTEM S.A. to finance a new gas pipeline

Photo of the article On 16 June 2014, GAZ-SYSTEM S.A. signed an agreement with the European Investment Bank (EIB) for the financing of the Lwówek - Odolanów gas pipeline being currently under design.
The financing will consist in a project loan to be taken out by GAZ-SYSTEM S.A. up to the maximum amount of PLN 410 million, which may be drawn in full or in multiple tranches, each of at least PLN 50 million. The loan will be available for 22 months of signing the agreement. The maximum loan maturity is 20 years.
The construction of the Lwówek - Odolanów gas pipeline is a crucial element for enhancing the security, reliability and flexibility of the operation of the gas transmission system in Poland and the neighbouring countries, especially in the context of the planned Central European North-South Gas Corridor. The pipeline will offer the possibility of transporting increased gas volumes domestically, including the transportation from the LNG terminal in Świnoujście, through the Polish transmission system, to the border with the Czech Republic, Slovakia and Ukraine. For this reason, the project received the PCI (Project of Common Interest) status granted in October 2013 by the European Commission.
 “The EIB, the bank of the EU, strongly promotes the diversification and security of the energy supply. We therefore particularly welcome this agreement with GAZ-SYSTEM, as the project will add capacity and robustness to the existing Polish gas transmission system and allow better connectivity to new gas supplies. Together with other projects previously financed by the Bank in Poland, this marks an important step towards better security of the energy supply in Europe. At the same time, this loan confirms the contribution of the EIB to the modernisation of the Polish energy sector, necessary for the successful economic development of the country”. -  László Baranyay, EIB Vice-President responsible for lending in Poland said.
The Lwówek - Odolanów gas pipeline to be built by 2017 will have a diameter of 1000 mm and a length of approx. 170 km. 
The value of the entire project is estimated at PLN 850 million. So far, at the design stage of the Lwówek - Odolanów pipeline, GAZ-SYSTEM S.A. raised co-financing under the Operational Programme Infrastructure and Environment in the amount of PLN 3.76 million. 

 “This is yet another project loan granted to GAZ-SYSTEM by the EIB to implement investment projects which are not only key from the point of view of our country but also play an instrumental role in the development of the integrated gas network in Europe. The EIB therefore supports our common goal of improving European energy security, building on the principles of solidarity and community of economic goals”. - Jan Chadam, President of the Management Board of GAZ-SYSTEM S.A. commented.
The first agreement between GAZ-SYSTEM S.A. and EIB for the value of PLN 600 million was signed on 14 July 2011 and concerned the construction of Rembelszczyzna-Gustorzyn and Szczecin-Gdańsk gas pipelines. On 14 December 2011, the European Investment Bank extended another loan worth PLN 600 million to the company, to finance the LNG terminal in Świnoujście.
To date, EIB has signed with GAZ-SYSTEM S.A. the agreements for the financing of strategic investments for total value of PLN 1.61 billion.
Investment programme 2009-2014
The implementation of the investment programme in the years 2009-2014 consists in the expansion of the transmission network in North-western and Central Poland by over 1000 km of gas pipelines. The sources of project financing include the company's equity, non-repayable subsidies from EU funds and European financial institutions. The capital expenditures on the construction of new pipelines total approximately PLN 4.5 billion in the years 2009-2014, of which EU co-financing represents PLN 1.3 billion. In addition, GAZ-SYSTEM S.A. provides the financing for the construction of the LNG terminal in Świnoujśce executed by its subsidiary company Polskie LNG S.A. For this purpose, GAZ-SYSTEM S.A. will spend approx. PLN 2 billion in the years 2009-2014.
Investment programme 2014-2023
The next step in the development of the Polish transmission system will involve the construction of new gas pipelines making part of the EU-supported North-South Gas Corridor which will enable the full integration of the transmission infrastructure in this part of Europe. To this end, in the years 2014-2023 GAZ-SYSTEM S.A. plans to build around 2000 km of new gas pipelines in Western, Southern and Eastern part of Poland. In the same framework, the construction of new gas interconnections with EU countries are planned (including Poland – Czech Republic, Poland – Slovakia, Poland – Lithuania). The today's agreement with banks will enable the financing of selected projects to be implemented as part of the North-South Gas Corridor.
 We invite you to see the photogallery:
 
From left:  Mr Jan Chadam,  President of the Governing Board of GAZ-SYSTEM S.A.; Mr László Baranyay, EIB Vice-President responsible for lending in Poland and Mr Adam Bryszewski,  Head of the Financial Division of GAZ-SYSTEM S.A. ( Source: EIB Photolibrary)

Exchange of the signed documents between Mr Jan Chadam, President of the Governing Board of GAZ-SYSTEM S.A.  and Mr László Baranyay, EIB Vice-President responsible for lending in Poland. ( Source: EIB Photolibrary)