With today's decision, the Commission grants EUR 2.3 billion to 31 gas and 12 electricity projects. This is the second financial decision under the Economic Recovery Package which amounts to almost EUR 4 billion. It is the largest amount the EU has ever spent on energy infrastructure.

"Under the EU's Recovery Plan we finance 'smart investment' - a short-term stimulus targeted on long-term goals. Investing in key infrastructure will not only give a push to the economy and employment, but it will also help ensuring that citizens homes will have heating and electricity, even in the event of supply disruptions," said José Manuel Barroso, President of the European Commission.

"We have learnt the lessons of the recent gas crisis which is one of the reasons why we decided to allocate major financial assistance to new energy infrastructure projects," he added.

"Never before has the Commission agreed such an important amount for energy projects. We have selected key projects which will help creating a more integrated energy network in Europe ensuring flexible energy flows across Member States' borders," added Günther Oettinger, European Commissioner responsible for Energy.

"Europe's energy and climate objectives require large and risky infrastructure investments with long pay-back times. The problem is that, in today's economic climate, such projects risk to be delayed. This is a moment where Europe can play an important role in keeping these projects on track," he added.

Today's Commission decision grants EUR 910 m for 12 electricity interconnection projects and EUR 1,390 m for 31 gas pipeline projects.

"The projects selected today will help to deliver major investment projects which were at risk of major delay because of the economic slowdown. By co-financing parts of these projects up to 50% the EU contribution will help to lever up to EUR 22 billion of private sector investment. The EUR 2.3 billion will be granted to project developers over the next 18 months," the EU executive said in a statement.

"These investments will help stimulate employment and ensure the survival of many small businesses in the construction and services industries. They will make energy supplies more reliable for millions of people especially in the event of a supply crisis."

The projects to be supported include:

Under reverse flow gas projects - infrastructure and equipment to permit reverse flow in the event of short term supply disruption - Hungary’s FGSZ Natural gas Transmission is to receive funding of EUR 8.08 m. Total project funding is EUR 79.5 m.

Background

In March 2009 the EU set aside EUR 3.98 billion to assist European economic recovery.

With the Carbon Capture and Offshore Wind Projects which the Commission agreed to support on 9 December 2009, the budget for energy projects in the European energy Recovery Programme is 97% committed.

The Commission will report to the European Council in March 2010."

Source: Portfolio Online Financial Journal