The European Investment Bank and Italian export credit agency Cassa depositi e prestiti (CDP) have approved a 20-year finance contract for a total of €400 million ($489 million) for Snam Spa, aimed at supporting the company’s investment programme.

The European Investment Bank and Italian export credit agency Cassa Depositi e Prestiti (CDP) have approved a 20-year finance contract worth €400 million ($489 million) for gas grid operator Snam, aimed at supporting the company’s investment programme.

An initial tranche of €300 million, already provided by the EIB, is being deployed while a second tranche will be made available before the end of 2012. CDP has also approved a further 10-year loan of €400 million, the Rome-based company confirmed this week.

The added finance will be used to help build two new gas pipelines in northern Italy and the plant to connect them to the existing grid, to boost the security of gas supply and give the network greater flexibility. The first gas pipeline will be around 150 km long and located between Poggio Renatico (Emilia Romagna) and Cremona (Lombardy). The second one, around 170 km long, is between Zimella (Veneto) and Cervignano (Lombardy). The plant to connect the Zimella-Cervignano pipeline to the national gas grid will be located in Cremona province. The total cost of these projects is expected to reach €950 million.