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SOCAR’S cash-flow problem

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Azerbaijan has been negotiating with international financial institutions to borrow $5bn to fund its share of the construction costs of the Southern Gas Corridor (SGC) gas export route, finance minister Samir Sharifov said on 20 July.

Москва выступила против строительства газопровода через Каспий
Southern Gas Corridor (SCG)

He told UK daily Financial Times that talks are in progress with the World Bank (WB), the European Bank for Reconstruction and Development and the Asian Development Bank.

A WB spokesman told NGW July 20 that it is considering supporting Azerbaijan’s investments in the SGC because of its critical importance to energy security in the region and to Azerbaijan’s development priorities. “At this moment, we are reviewing ways to support the investment in cooperation with other nancing partners and will fully disclose project documents in the course of project preparation,” the bank said.

Azerbaijan has already sold $1bn Eurobonds and is preparing to sell the same again in further bonds to nance SGC. A source at WB told NGW June 2 that “Baku has applied to the WB for a loan of $500mn, the talks are under way… the process should be wrapped up by the end of the year.”

The European Bank for Reconstruction and Development (EBRD) has con rmed that it started talks to provide direct financing of €500mn and attract €1bn from banks for TAP, of which Socar is a 20% owner.

The current cost of SGC including upstream work on Shah Deniz 2 (SD2), is now estimated at around $40bn, including $9.3bn for the Trans Anatolian gas pipeline (Tanap), $6bn for the Trans Adriatic pipeline (TAP) and $23.8bn for developing SD2 as well as the expansion of the South Caucasus line (SCPX)…

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