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Moldova builds oil terminal with EBRD finance
To help finance the construction of a river-port oil terminal in Moldova, the European Bank for Reconstruction and Development (EBRD) is providing a US$ 28 million (ECU 22 million) financing package to Terminal S.A., a joint venture between Tirex-Petrol, the Moldovan state oil company, and Technovax S.A., a Greek joint-venture company. Three Greek banks are participating in the debt financing, the first such syndication with Greek banks in Moldova.
"This is the EBRD's first port project to be financed on a concession basis with private sector sponsors and it sets an important example for the region. The modern facilities will make Moldova's handling and distribution of oil more cost-effective and efficient," said Jacques de Larosière, President of the EBRD. "We are especially pleased that three leading Greek banks have participated in this pioneering transaction, which is a strong introduction for Moldova to the international syndication market."
The terminal, to be built on the River Danube in the south of Moldova,will increase the country's flexibility in importing raw materials as well as introducing market-based principles to the oil products distribution sector. The terminal will comprise riverside mooring facilities, pipelines from the mooring facilities to a storage area with a tank-farm located 1 km from the river, and a pumping station for fuel transportation.
The construction costs are budgeted at US$ 38 million (ECU 30 million). The EBRD, which is covering 74 per cent of the project costs, has syndicated US$ 9 million in addition to its US$ 16.5 million (ECU 12.8 million) loan to the Commercial Bank of Greece, the National Bank of Greece and the General Hellenic Bank. The EBRD is also investing US$ 2.5 million (ECU 1.9 million) in Terminal S.A. The Republic of Moldova will ensure the facility's financial viability by guaranteeing a certain level of usage.
About 190 new jobs will be created and Moldovan construction companies will have the opportunity to tender for contracts. Following an environmental assessment which was conducted in accordance with the EBRD's procedures and with Moldovan requirements, significant environmental and safety measures have been incorporated in the operation.
Technovax was formed in 1992 by two Greek construction companies, Hellenic Technodomiki S.A. and Avax S.A. which have extensive experience in the construction of oil ports and related infrastructure.
This is the EBRD's second infrastructure project in Moldova, increasing the Bank's commitments there to ECU 111 million.
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