The Government approved the signing of the financing agreement between the Republic of Moldova and the European Investment Bank (EIB) for building the Ungheni – Chisinau gas pipeline, IPN reports.

Under the financing contract, the EIB will offer Moldova €41 million as a sovereign loan that will be on-lent to VestMoldTransGaz for making the investment.

The pipe will be 120 km long and will enable the country to fully use the Iasi – Ungheni gas pipeline that was put into operation in 2014.

Within this project, Romania will build two gas compressor stations on its territory. In Moldova, the construction of the Ungheni – Chisinau gas pipeline will cost €93 million, according to the feasibility study. Together with other network components, the total cost of the project will be €113 million.

The signing of the contract was set for December 19. The signatory on behalf of Moldova will be Minister of Economy Octavian Calmac.

In addition to the loan provided through the EIB, the European Union will offer Moldova €10 million worth of grant for compensating the initial financial contribution planned to be made from the state budget and over €20 million within the second project implementation phase.