ADB to eye loan approval for Shah Deniz in autumn
By Fatma Babayeva
The Asian Development Bank (ADB) will consider the possibility to allocate loan worth $1.505 billion for the second phase of Azerbaijan’s Shah Deniz gas and condensate field's development on September 27, 2016, ADB reported on June 3.
The bank was earlier expected to approve the allocation on August 22, 2016.
The proposed investment plan will support the Azerbaijani government's efforts to finance Shah Deniz-2 project, and is aimed at improving the country's fiscal position by increasing revenues from natural gas exports from the expanded Shah Deniz field and creating additional jobs.
The plan will provide a partial credit guarantee (PCG) in the amount of 16.67 percent of the project's cost in order to support commercial bank financing of government shares.
If the loan is allocated, it will be used by Southern Gas Corridor CJSC.
Within the framework of Shah Deniz 2 project realization, the annual output of the natural gas will increase from 9 billion cubic meters (first phase) to 16 billion cubic meters (second phase).
The gas to be produced as part of the Stage 2 of the Shah Deniz field's development will be exported to Turkey and to Europe via the Southern Gas Corridor (SGC) pipeline network.
Within the framework of the project, the existing infrastructures will be upgraded and a chain of new pipelines will be developed.
Shah Deniz gas will be supplied to Turkey in 2018, and after the completion of the TANAP pipeline, the Azerbaijani gas – so called Caspian gas - will be transported to Europe roughly at the beginning of 2020.
The SGC is one of the biggest construction projects of our times with a value of $40 billion.
Earlier in mid-May, the European Bank for Reconstruction and Development (EBRD) said that the bank considers allocating up to €1.5 billion for the Trans Adriatic Pipeline (TAP) in a record loan.
The World Bank also will allocate $1 billion for the construction of the TANAP gas pipeline.
In the meantime, the European Investment Bank (EIB) is also expected to allocate $1.07 billion for the project on long-term basis and perhaps, under the state guarantee.
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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva
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