The European Investment Bank (EIB), the European Union’s financial institution, has signed a contract for a long-term loan of EUR 400 million with Fluxys, the independent operator of the natural gas infrastructure in Belgium. Fluxys will use the loan to finance investments in transmission and storage facilities in order to meet rising consumption in Belgium and Europe.
The EUR 400 million loan from the EIB will help to finance Fluxys’ investments in infrastructure over the period 2008 to 2012. The term of the loan is 25 years and a first instalment of EUR 280 million will already be used in 2008.
Fluxys’ investments for the period 2008-2012 are estimated at €1.4 billion and cover around 20 different projects, including:
- pipeline projects to increase capacity along the East-West axis, which will serve both for the transit of natural gas to other countries and the transport of natural gas for consumption in Belgium;
- investments in compressor stations, entailing the replacement of existing installations by a more energy-efficient technology and the construction of additional compression installations;
- capacity increase of the underground storage facility for natural gas in Loenhout.
By arranging this loan from the EIB, Fluxys is drawing more on foreign funds to finance its investments in infrastructure, in the spirit of the tariff framework set out in the legislation relating to the natural gas market in Belgium. Last year Fluxys LNG already secured a long-term loan of EUR 85 million from the EIB to finance the project to double the throughput capacity at the liquefied natural gas terminal in Zeebrugge. The project has been finalized in the meantime and the additional capacities are already in use.
Financing these projects will enable to strengthen Belgium’s position as a crossroads for international gas flows. From the EIB’s point of view, this financing fulfils one of its key aims, namely to support the development of projects for Trans-European Energy Networks (TEN-E), the prime objective being to guarantee the security of energy supply. The EIB has made supporting the energy sector a priority, and spent EUR 6.8 billion on doing this in 2007.
The funding for the development of Fluxys’ infrastructure follows the objectives approved by the EIB’s governors (the finance ministers of the EU Member States) to safeguard Europe’s energy supply.
Information note on Fluxys:
Fluxys is the independent operator of natural gas transport, transit and storage infrastructure in Belgium. The company also operates the LNG terminal in Zeebrugge and the Zeebrugge Hub, one of the leading international short-term natural gas markets in Europe. Through its first-mover approach, Fluxys has developed its infrastructure into a central crossroads for international gas flows in Western Europe.