ICGB announces the launch of several tender procedures by the end of the year and reports the finalization of key milestones in H1 2017

ICGB reports constant and consequent progress on the realization of the IGB Project. For the first half of 2017 and up to now there are several milestones that are achieved or about to be finalized in the closest future:

  • Market Test - the Market Test, conducted in 2016, has been successfully completed with the execution of the ARCAs (Advanced reservation capacity agreements) with the shippers submitted binding offers. Five companies, 4 of which are entirely new for the Bulgarian market, have booked capacity in the IGB pipeline. On March 10th 2017 the Agreements signed (ARCAs) were submitted to both regulators - EWRC (Bulgaria) and RAE (Greece).
  • Exemption procedure under art. 36 of the Gas Directive - based on the Market Test held and initial agreements concluded, the Project company has submitted in July 2017 an annex to the exemption application to the regulatory authorities - EWRC and RAE, to take a final decision for exemption from the rules for regulated third party access. Decision by the Regulatory Authorities on the exemption procedure is expected by the end of October 2017 and the final opinion of the EU is expected by January 2018, based on which the gas transportation agreements will be signed with shippers that have booked capacity in the gas pipeline.
  • The IGB project is a potential beneficiary under the ESIF for Bulgaria and Greece. For that purpose, the Bulgarian Ministry of Energy provided in June 2017 an extensive justification for the IGB Project to be included as eligible for financing under the Bulgarian Operational Program for Innovation and Competitiveness as well as proposal for allocation of funds between the two projects - IGB and IBS. The need for resources is already determined within the Cost Benefit analysis prepared in compliance with the EC guidelines and submitted to the managing authority. The amendment of the OPIC and inclusion of the IGB project as beneficiary is expected.
  • The realization of the IGB Project is secured by sovereign guarantee in the amount of EUR 110 mln, provided in the Annual State Budget Act, which gives potential for assuring of loan financing under preferable conditions. ICGB is in negotiation process with IFIs for determining of the conditions but the final decision shall be dependent on the final decision of the ESIF grant.
  • Land rights - the process for establishing of land rights for approx. 3800 plots for the pipeline and the technological sites is finalized, including the expropriation of 23 plots that have not been required by voluntary agreements with the owners. The compensations for the affected land owners are transferred in July to bank account and are currently on their disposal; all affected owners are properly notified through the mass media and on a municipality level that they could receive due payments in August 2017. The easements established have been registered with the Registry offices as per location of the properties in 7 out of 9 municipalities affected. For the remaining two municipalities - Haskovo and Kurdzhali, registration of easement rights established is being processed.
  • Permitting process – the application for construction permit on Bulgarian territory is submitted to the Ministry of Regional Development and Public Works on 01.09.2017. The construction permit is expected to be issued in the first half of September 2017. This is a significant achievement of the project company and reflects the full compliance with the road map of the project.
  • Procurement procedures - the ICGB company is designated as Contacting entity under the Bulgarian Public Procurement Act. The company is in the process of preparation of the respective procedures for assigning the main contracts which are necessary for the start of the construction - selection of owner's engineer for the Project; line pipe supplies; assigning of the detailed engineering, procurement and construction (EPC contract); archaeological research and selection of the construction supervision company. In July 2017, the ICGB Board of Directors approved an updated schedule which foresees most of the tenders to be notified till the end of 2017. The procedures will be announced pursuant to the procedure and provisions of the Public Procurement Act and will be publicly accessible to all stakeholders.

Date 12/09/2017