By Nigar Abbbasova
The Multilateral Investment Guarantee Agency (MIGA) has approved a guarantee of some $1.2 billion on the loan allocated for the Trans-Anatolian Natural Gas Pipeline (TANAP) project, a core pipe of the ambitious Southern Gas Corridor project (SGC).
“The guarantee is expected to help draw in commercial banks that will contribute to long-term financing needs of the project. Reinsurance capacity is also expected to be mobilized,” a source in MIGA told Trend.
The WB’s Board of Executive Directors earlier approved two loans each worth $400 million for Turkey and Azerbaijan for the implementation of the project, which is aimed at diversification of Azerbaijan’s gas export markets and provision of energy security in Turkey and South Eastern Europe.
The recipients of funding are the Southern Gas Corridor (SGC) Closed Joint Stock Company with the guarantee of Azerbaijan and the Boru Hatları İle Petrol Taşıma Anonim Şirketi (BOTAŞ) with the guarantee of Turkey.
Being a member of the World Bank Group, MIGA promotes foreign direct investment (FDI) in developing countries to help support economic growth, reduce poverty, while its strategy is to attract investors and private insurers in operating environments.
TANAP shareholders are Azerbaijan’s state oil company SOCAR (58 percent), BOTAS (30 percent) and BP (12 percent).The length of the pipe is 1,800 kilometers with the initial capacity of 16 billion cubic meters
. Some 6 bcm of gas will be delivered to Turkey, while the remaining volume will be supplied to Europe. The construction process of TANAP is currently on track, while the project is completed by almost 55 percent. Some 19 underground passages have so far been built as part of the project.
Given the importance of the SGC for all countries involved, a number of international financial institutions are supporting the project, including the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the Asian Infrastructure Investment Bank (AIIB), the Asian Development Bank (ADB), and the World Bank Group (WBG).
Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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