Until the end of this year shareholders of the Southern Gas Corridor (SGC) plan to borrow 2 billion from the international financial organizations (IFOs), Rovnag Abdullayev, President of State Oil Company of Azerbaijan (SOCAR), told journalists on Saturday.
“The talks are in progress with the European Bank for Reconstruction and Development (EBRD), Asian Development Bank (ADB) and other IFOs. Most likely until the end of 2016 about 2 billion will be borrowed from these banks,” Abdullayev said.
He did not specify currency of the credit and what section of SGC (expansion of the Southern Caucasian Gas Pipeline (SCG), Trans Anadolu (TANAP) or Trans Adriatic pipeline (TAP), the credit will be used for.
A little later SOCAR President explained “the credit will borrowed for the period of 20 years with very low interest rates.” He added that this will allow the shareholders not to spend their own funds for the project implementation.
SOCAR President also confirmed that the ceremony of laying foundation of TAP will take place in Greece on May 17, 2016.
At a press conference after the second session of the Coordination Council of SGC on February 29, 2016 Azerbaijani Energy Minister Natig Aliyev said that the issue of funding of TAP construction will be solved on April 28, 2016. He spoke about the possibility of borrowing from the European financial institutions.
Prior to that TAP was listed among 33 priority energy projects of the European Commission, which meant the possibility of borrowing up to 2 billion Euro from the financial and credit organizations of the European Union (EU).
In February 2016 European Investment Bank (EIB) said that it is interested in funding TAP and TANAP. EIB representative Massimo Dofemia said that last year EIB worked in close cooperation with TANAP and TAP projects. In December 2015 Tolga Erguven, EBRD President for Energy Diplomacy in Russia, Caucasus and Middle Asia, said that he has been discussing the project funding issues with the shareholders of TANAP A.S. gas pipeline company (SOCAR – 58%, Botas – 30% and BP- 12%).
Total length of TAP is 878 km, of which 550 km passes through the north of Greece, 215 km through Albania, 105 km through the Adriatic Sea and 8 km through Italy. Diameter of the land section of the pipeline in Greece and Albania is 48 inches, while offshore section and Italian section of the gas pipeline is 36 inches. Construction of the land section of TAP in Greece, Albania and Italy will start in summer 2016 and will end within 42 months. Construction of the offshore section of the gas pipeline will be completed in winter 2017-2018.
TAP shareholders include SOCAR (20%), BP (20%), Snam (20%), Fluxys ( 19%) , Enagas (16%) and Axpo (5%).