The EU Commission decides that a State guarantee can bridge the funding gap of an infrastructure project in the energy sector (LNG Terminal)

State Guarantee to an Energy Project* A state guarantee can bridge the funding gap of an infrastructure project. Introduction State aid rules allow energy infrastructure projects to be supported by as much aid as is necessary to bridge their “funding gap”; i.e. the difference between the initial investment cost and the present value of their expected net operating revenue which is the future gross revenue minus future operating costs. In the case of a terminal for liquefied natural gas [LNG] in Cyprus, the aid was in the form of a state guarantee. We will see later how the guarantee, which provides compensation in case of default rather than injecting actual money into the project, was able to reduce the funding gap. Cyprus notified to the Commission an individual measure

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Phedon Nicolaides, The EU Commission decides that a State guarantee can bridge the funding gap of an infrastructure project in the energy sector (LNG Terminal), 8 December 2020, e-Competitions April 2021 - II, Art. N° 100166

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