The bank’s board approved the loan on Wednesday to a mostly Azeri-owned consortium building the Trans-Anatolian Pipeline, or TANAP.
The project is the central link in the Southern Gas Corridor aimed at reducing Europe’s reliance on Russian gas.
The US$40 billion, 3500 km corridor is one of the biggest infrastructure projects in the global oil and gas industry.
Financing for the project was thrown into question in March when Azerbaijan quit the Extractive Industries Transparency Initiative (EITI), an international anti-corruption watchdog made up of governments, companies and non-governmental organisations.
The EITI had suspended Azerbaijan’s membership after criticism from human rights groups over a crackdown on civil society.
Officials at the EBRD, the only international financial institution with a specific mandate to promote democracy, insisted they had ensured Tanap met the usual standards.
The financing is one of the largest single loans the bank has granted.
The US$8.6 billion TANAP pipeline will link to the Southern Corridor Pipeline already operating across Azerbaijan and Georgia, carrying gas from the giant Shah Deniz field in the Caspian across Turkey to the border with Greece.
From there the Trans-Adriatic Pipeline, or TAP, will take gas through Greece, Albania and across the Adriatic to Italy. With first gas expected in 2020, about 6 billion m3 of TANAP’s capacity will go to Turkey, with 10 billion m3 for Europe, enough to supply about 10 million households, the EBRD said.
Azerbaijan holds a 58% stake in the project, while Turkish national pipeline group Botas owns 30% and BP holds 12%. The EBRD, which has already loaned US$450 million to gas projects in the Caspian, is considering a further US$1.5 billion financing package for TAP, including US$500 million of its own funds, but does not expect a decision until next year.
The EU’s European Investment Bank is also considering financing for both TANAP and TAP.
The EBRD has already provided funding for Azerbaijan’s Shah Deniz field, gas from which will fill half of TANAP’s capacity.
Read the article online at: https://www.worldpipelines.com/business-news/19102017/ebrd-approves-tanap-gas-pipeline-funding/