Baku, Azerbaijan, Oct.31
By Leman Zeynalova – Trend:
The European Investment Bank (EIB) hasn’t yet decided on the final amount of the loan for the Trans Anatolian Natural Gas Pipeline (TANAP) project, Trend learned from EIB.
“The date for the EIB Board discussion of the project is not known yet. The final amount of the Bank’s loan, if any, will be decided by the EIB governing bodies following the satisfactory completion of the ongoing due diligence,” said the source at EIB.
The source went on to add that the EIB is currently appraising loans to TANAP.
“It will carefully review all the issues raised as part of its intense due diligence procedures. As for all the projects that it finances, the EIB will apply the highest standards in its technical, economic, financial, and environmental and social assessment of this projects, It will ensure compliance with EU and national laws as well as EIB Environmental and Social Standards,” added the source.
Director General of Azerbaijan’s Southern Gas Corridor closed joint-stock company (CJSC) Afgan Isayev, for his part, told Trend that the amount of the loan intended to be allocated to the Southern Gas Corridor CJSC by the EIB to finance the company’s share in TANAP project remains unchanged at $500 million.
“But we can’t speak on behalf of EIB or Turkey’s BOTAS company (one of the shareholders of TANAP) about the intended amount of the loan between them,” he said.
“As I mentioned earlier during the international oil and gas summit held in Baku Oct.13, 2017, the total cost of TANAP (from the start of the pipeline’s construction until the completion of the work and transportation of first gas to Turkey and Europe) has decreased by more than $0.5 billion, as compared to the figure announced last year ($8.5 billion) and amounts to slightly less than $8 billion in accordance with TANAP’s new budget approved in October this year,” added Isayev.
TANAP project envisages transportation of gas from Azerbaijan's Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018 and after completion of the Trans Adriatic Pipeline's construction the gas will be delivered to Europe in early 2020.
The length of TANAP is 1,850 kilometers with an initial capacity of 16 billion cubic meters of gas. Around six billion cubic meters of this gas is meant to be delivered to Turkey, with the remaining volume to be supplied to Europe.
Currently, the shareholders of TANAP are the Southern Gas Corridor CJSC (58 percent), Botas (30 percent) and BP (12 percent).
The World Bank has approved allocation of $800 million to Azerbaijan and Turkey. Of this amount, $400 million was allocated to BOTAS, while the other $400 million was provided to the Southern Gas Corridor CJSC.
Additionally, the Asian Infrastructure Investment Bank (AIIB) has approved allocation of $600 million for the SGC.
A guarantee of allocation of $750 million for SGC has been provided by the Multilateral Investment Guarantee Agency (MIGA).
Moreover, the EBRD Board of Directors approved a $500 million worth loan for TANAP on Oct. 18, 2017. The loan is issued for a period of 18 years.
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