Wednesday June 29 2022

WB considers loan guarantees for TANAP

16 June 2016 12:39 (UTC+04:00)
WB considers loan guarantees for TANAP

By Fatma Babayeva

The World Bank (WB) is considering a possibility to provide loan guarantees for financing the construction of the Azerbaijani part of the Trans Anatolian Pipeline (TANAP) project.

The statement was made by Larisa Leshchenko, head of the WB Baku office to Trend on June 16.

TANAP is a component of the Southern Gas Corridor, which envisages transferring natural gas from Azerbaijan’s section of the Caspian Sea to Europe. The pipeline stretches from the Georgian-Turkish border to the western borders of Turkey with Greece.

Leshchenko noted that the Bank also continues discussions on the issue of financial support to the Azerbaijani part of the TANAP project.

It is too early to speak about the volume of financing as the discussion and preparation processes are currently being conducted, she said, adding that if the project is approved, it will increase the volume of TANAP's financing.

Perhaps, the financing will be via the International Bank for Reconstruction and Development (IBRD), Leshchenko said adding that it is also possible that the WB will provide loan guarantees through the Multilateral Investment Guarantee Agency (MIGA, an institution of the World Bank Group).

Meanwhile, WB regional director for the South Caucasus Mercy Tembon underlined that the Bank's mission on studying possible financing of the TANAP project continues its work in Azerbaijan.

There are a number of tasks that the mission must fulfill, said Tembon adding that it will take some time as it is necessary to bring together all the fragments and submit to the bank's management.

At the same time, the WB is in the negotiation process simultaneously with Turkey's Botas Petroleum Pipeline Corporation and Southern Gas Corridor CJSC for financing TANAP.

Moreover, it is expected that additional $1.07 billion will be allocated by the European Investment Bank (EIB) to TANAP pipeline. The loans will be long-term, and will possibly be provided under state guarantee.

TANAP will be connected to the Trans-Adriatic Pipeline (TAP) which is the European leg of the SGC.

The source in TAP consortium told that the construction of subsea section of the TAP pipeline is expected to begin in the winter of 2017-2018.

Immediate construction works within the framework of the TAP project will kick off in the countries that located on the route of the pipeline this summer, said the source by stressing that after the groundbreaking ceremony of the TAP in May, contractors has been mobilized and pipes continue to arrive in the ports of Greece and Albania.

The completion of the TAP is expected in 2019. The gas will be transported from the Turkish-Greek border through Greece, Albania and the Adriatic Sea and then coming ashore to Italy’s south.

TAP's initial capacity will be 10 billion cubic meters of gas per year with the possibility expand it to 20 billion cubic meters.

The SGC is one of the biggest construction projects of our times with a value of $40 billion. The realization of SGC will serve to enhancing energy security of the EU and diversify its gas supply routes.


Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

Follow us on Twitter @AzerNewsAz

Latest View more