ADB direct loan turns out to be unneeded by Southern Gas Corridor CJSC
By Mirsaid Ibrahimzade
The direct loan of the Asian Development Bank (ADB) turned out to be unneeded by the Southern Gas Corridor CJSC of Azerbaijan as a result of optimization and reduction of project costs, spokesperson of Azerbaijan’s state oil company SOCAR Ibrahim Ahmadov told Trend.
"As it is known, Southern Gas Corridor CJSC signed two agreements with the Asian Development Bank, one of which envisages a guarantee to attract $ 524.5 million, which were fully utilized by the company, and the other was a direct loan worth $ 500 million, which later turned out to be unneeded by Southern Gas Corridor CJSC as a result of optimization and reduction of project costs," he explained.
As for the loan in the amount of $500 million raised from the European Bank for Reconstruction and Development, Ahmadov noted that these funds were also fully utilized.
Since the beginning of the year, Southern Gas Corridor CJSC has invested about $320 million to finance its share in the SGC projects (including financing costs), he added.
The Asian Development Bank has provided a $ 5.1 billion loan, guarantee, grant and technical assistance for Azerbaijan, so far.
ADB’s program for Azerbaijan during 2011–2017 consisted of 47 projects. Energy was the largest sector supported, accounting for 42 percent ($2.1 billion) of total financing followed by transport, at 27 percent ($1.4 billion).
Moreover, Asian Development Bank will allocate $ 815 million from its credit resources to Azerbaijan in 2019-2021. This is stated in the bank's three-year business plan. Thus, in 2019, the bank will allocate $ 250 million to the country, $ 265 million in 2020, and $ 300 million in 2021.
The Southern Gas Corridor is one of the priority projects for the EU envisaging the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.
SGC unites a number of pipeline projects set to bring Azerbaijani gas from Shah Deniz 2 field and by expanding the number of gas routes to Europe provides energy security of the latter.
The Southern Gas Corridor, a multi-billion project, consists of four segments: Shah Deniz 2, Expansion of South Caucasus Pipeline (Baku-Tbilisi-Erzurum), the Trans Anatolian Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).
The launching ceremony of the first stage of the Southern Gas Corridor was held in Baku on May 29, 2018, while opening ceremony of TANAP was held on June 12, 2018 in the Turkish city of Eskisehir. Trans-Adriatic Pipeline (TAP) and Trans-Anatolian Natural Gas Pipeline (TANAP) have already been connected on the Turkish-Greek border.
Perhaps SGC is one of the most ambitious projects in the world of oil and gas industry, as well as a complex target that involves a large number of different stakeholders - including seven governments and 11 companies.
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