WB can provide loan guarantees on TANAP gas pipeline’s construction

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The World Bank (WB) is considering the possibility to provide loan guarantees for financing the construction of the Azerbaijani part of the Trans Anatolian Pipeline (TANAP) project, Larisa Leshchenko, head of the WB Baku office, told Trend in an exclusive interview.

TANAP-sonLeshchenko said the WB also continues discussions on the issue of financial support to the Azerbaijani part in the TANAP project.

It is too early to speak about the volume of financing, because, currently, the discussion and preparation processes are being conducted, she added.

If the project is approved, it will increase the volume of TANAP’s financing, noted Leshchenko.

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

WB regional director for the South Caucasus Mercy Tembon told Trend that the bank’s mission on studying possible financing of the TANAP project continues to work in Azerbaijan.

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

The WB is in negotiations 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) for TANAP.

The loans will be long-term, and will possibly be provided under state guarantee.

TANAP project envisages transportation of gas of Azerbaijan’s Shah Deniz field from the Georgian-Turkish border to the western borders of Turkey.

Turkey will get gas in 2018 and after completing the construction of Trans Adriatic Pipeline (TAP), gas will be delivered to Europe in early 2020.

The project’s total cost is estimated at $9.8 billion. Currently, the shareholders of TANAP are: SOCAR (State Oil Company of Azerbaijan) – 58 percent, Botas – 30 percent and BP – 12 percent.

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