European Union leaders have agreed to invest about 3.98 billion euros ($5.4 billion) in a wide range of energy infrastructure projects.

The massive energy investment had been proposed in January but was put on ice after larger EU members like Germany refused to endorse it without some concessions. Now, after months of wrangling, the funds have been freed up for infrastructure projects in the wind, electricity, coal and gas sectors. Germany succeeded in limiting the funding to just two years, meaning that only projects that are ready to go by the end of 2010 will be eligible for funding.

European Commission president Jose Manuel Barroso, who first proposed the funding, said, "Now it's a question of carrying them out swiftly to ensure that this funding will not be lost."

Overall, the funding will be divided into 1.05 billion euros ($1.4 billion) for carbon capture and storage (CCS) projects, 1.44 billion euros ($1.93 billion) for gas interconnectors, 565 million euros ($758 million) for offshore wind projects and 910 million euros ($1.2 billion) on electricity interconnect projects.

The funding will see the building of 13 CCS projects at coal-burning power plants in the U.K., Germany, the Netherlands, Poland and Spain in an effort to drastically cut their greenhouse gas emissions. Most of the CCS projects will pump the liquefied carbon dioxide into empty oil and gas fields, but some will use saltwater aquifers.

Almost $2 billion will be spent on gas interconnector projects, including the Nabucco pipeline, which is designed to transport gas from the Caspian Sea region to central Europe. The Skanled pipeline, to bring Norwegian gas to Denmark, Sweden and Poland, will also get funding, and there's a new liquefied-natural-gas terminal planned for the Polish port of Swinoujscie.

Offshore wind power has been allocated $758 million on key European projects, including the development of the North Sea Grid around the U.K that will link with Germany, Ireland, Denmark, France, the Netherlands, Belgium and Luxembourg to create 1 gigawatt of electricity. Investment will also be made in Baltic wind power generation, Thornton Bank off Belgium and the Aberdeen offshore windfarm, which is also used for testing larger multi-megawatt turbines off the Scottish coast.

The $1.2 billion set aside for electricity interconnectors will fund, among other projects, the Estlink 2 between Estonia and Finland, the interconnection of Sweden and the Baltic states, the linking of Ireland's wind farms to Wales and the U.K. electricity grid and the laying of a 380-kilovolt AC submarine cable between Sicily and continental Italy.

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