The EU will fund the Balticconnector projects with more than 200 million euros

The European Commission has decided to co-fund the establishment of the Estonia-Finland gas connection Balticconnector with a maximum rate of 75 per cent and the enhancement of Estonia-Latvia gas connection with a rate of 50 per cent with the total funding amounting to more than 200 million euros.

According to Taavi Veskimägi, Chairman of the Management Board of Elering, in addition to the funding of 100 million euros received for the Estlink2 project in the previous budgetary period of the European Union, the objective for this budgetary period was to receive co-funding for two projects that are crucial for the security of energy supply in Estonia, as well as the whole region – the third Estonia-Latvia electrical connection EstLatIII and the Estonia-Finland gas connection Balticconnector. “I am glad that by today, we have achieved these goals. The decision to co-finance the establishment of the EstLatIII electrical connection with 112 million euros was made in 2014; now, co-financing the Balticconnector with about 200 million, whereby the co-financing of the Balticconnector to the extent of 75% is the first of its kind among EU energy infrastructure projects. I would like to thank all of the participants for their cooperation and support, especially our Finnish partner Baltic Connector OY, Estonian and Finnish government officials and politicians, as well as the European Commission. Our goal is to finish the Balticconnector and the third Estonia-Latvia connection by the end of 2020 at the latest.”

Based on today’s decision, the European Union will be co-funding the Balticconnector and the strengthening of the Estonia-Latvia connection with 206 million euros of the approximate total cost of 300 million euros.

The Balticconnector will be linking Estonian and Finnish natural gas networks with a 150 km gas transmission pipeline, 80 km of which will be located on the seabed, and with compressor stations enabling gas transmission on both sides of the Gulf of Finland. The project to strengthen the Estonia-Latvia connection involves a compressor and gauging station in Southern-Estonia that enables bi-directional gas flows. The projects are prerequisites for the establishment of a Finnish-Baltic regional gas market and for increasing the gas supply security in the region.

The decision of the European Commission to fund the project provides a basis for the project developers Elering and the Finnish state-owned Baltic Connector OY in making the final investment decision. The construction costs of the projects are going to be distributed between Estonia and Finland based on the geographic location of the investments.