The European Bank for Reconstruction and Development (EBRD) has agreed to acquire 25% stake in Vestmoldtransgaz, which operates the newly built Ungheni-Chisinau gas pipeline in Moldova.

EBRD is acquiring the stake from Transgaz, the parent company of Vestmoldtransgaz, for €20m.

Established in 2014, Vestmoldtransgaz owns and manages a gas pipeline network in Moldova, offering natural gas transport services. In 2018, the company was acquired by Eurotransgaz, a subsidiary of SNTGN Transgaz, a company that operates Romanian natural gas transmission system.

The Ungheni-Chisinau gas pipeline is a 120km long pipeline, which could be operational soon, will interconnect the gas transmission systems between Romania and Moldova.

The pipeline will link the capital Chisinau to the Iasi-Ungheni interconnector between the eastern Romanian city of Iasi and Ungheni, a Moldovan town on the Romanian border.

EBRD vice president Alain Pilloux said: “This connection will enhance Moldova’s energy security by diversifying its gas supply sources, a prerequisite for the country’s successful development.

“The project also helps integrate Moldova into future major gas infrastructure projects such as the Trans Adriatic Pipeline and gas sources from central European hubs, and links it with Black Sea gas deposits. Greater integration will deliver economic benefits for consumers.”

The 120km long Ungheni-Chisinau gas pipeline was built at a cost of €90m

The gas pipeline is expected to support Moldova in diversifying its energy sources. Currently, it is more than 90% dependent on energy imports.

The €90m pipeline is supported by a €38m loan from European Investment Bank (EIB) and equity investment from Eurotransgaz.

In 2016, the EBRD offered a loan to the Moldovan government to support the Ungheni-Chisinau project. However, the financing was concelled following the privatisation of Vestmoldtransgaz.

The EBRD has now provided the funds in the form of an equity stake in the company.