Three international lenders on Monday paved the way to lending up to 4 billion euros (5.2 billion dollars) to the Nabucco pipeline, which is to bring gas to Europe via Turkey, reported dpa. The European Union is desperate to diversify its gas supplies and reduce its dependence on a handful of countries, notably Russia. Nabucco, which is meant to bring gas from the Caucasus and Iraq to Europe, is the EU's main attempt to reach that goal. The agreement between three major international lenders and the six-company Nabucco consortium "is the start of the appraisal of the project" so that lenders can make sure it meets business, regulatory, social and environmental standards, said Thomas Barrett, operations director at the European Investment Bank (EIB). The EIB is the EU's long-term financing arm. It is joined in its appraisal of the Nabucco project by the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), a branch of the World Bank. The EIB is expected to lend up to 2 billion euros to the project, the EBRD up to 1.2 billion and the IFC up to 800 million. The total cost of the project is estimated at 7.9 billion euros. Despite its high profile, Nabucco has moved at a slow pace as gas suppliers have demanded that the project prove that it has the funds to buy their product, and investors have demanded that the consortium prove that it has enough gas to be viable. Nabucco managing director Reinhard Mitschek said that in-depth talks with lenders and gas suppliers would now run in parallel. The project timetable foresees initial decisions on both financing and gas supplies in early 2011, with construction set to start in 2012. The Nabucco partners are Bulgarian state energy firm BEH, Turkish state company BOTAS, Hungarian-based company MOL, Austria's OMV, Germany's RWE and Romania's Transgaz. The pipeline is planned to run from Turkey's borders with Georgia and Iraq through Bulgaria, Romania and Hungary to Austria.
