Biggest EIB Loan for Energy in the Mediterranean

The European Investment Bank has announced a Eur500 million loan to Medgaz for the construction of a gas pipeline between Algeria and Spain. The financed project consists of transporting gas energy from Algeria to Spain over a length of 210 km. It comprises the construction and operation of a sub-sea gas transmission pipeline between Beni Saf in Algeria and a landfall close to Almeria in Spain, including a gas receiving terminal on the Spanish side, a compressor station at Beni Saf of initially 99 MW, a pipeline with a diameter of 24 inches, a capacity of 8 Gm³/a and short near-shore sections for a potential future second 24-inch sub-sea pipeline. The total project cost is estimated at Eur1.01 billion.

The project has a real added value in terms of energy supply, competitiveness and security. It will contribute concretely to meeting growing gas demand in Spain by diversifying supplies; and encouraging competitive operation of the internal market by making all the resulting import capacity available to competitors of the main market player of natural gas. It will also reinforce the security of EU energy supply.

The energy challenge in the Mediterranean is an operational priority for the EIB, which between 2002 and 2009 provided energy financing totalling Eur3.7 billion in the Mediterranean, with flagship projects such as the Tillouguit hydropower plant and the Tangiers wind farm in Morocco, the Gabal el-Zait wind farm in Egypt, the Jordanian pipeline in Jordan, the Ghannouch power plant in Tunisia and the Deir Ali I and II projects in Syria.

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