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ADB Approves Loan of $ 1 Billion for Southern Gas Corridor

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tanap-yeniThe Board of Directors of the Asian Development Bank (ADB) has approved a loan of Azerbaijan CJSC Southern Gas Corridor (SGC). This was reported in a press release by ADB, published on 7 December.

The total amount of funding for the project will amount to $ 1 billion. The loan includes two components:

– $ 500 million for the JSC SGC,

– $ 500 million in the form of partial guarantees on commercial loans taken by SGC.

The bank argues that the loan will provide additional revenue that the government will be able to direct to the social sphere and to continue efforts to diversify the country’s economy.

JSC SGC was created by the Decree of the President of the Republic of Azerbaijan in February 2014 in order to finance the state’s share in the project Shahdeniz-2 and export infrastructure: expansion of the South Caucasus Pipeline, TANAP and TAP. The company is owned at 51% by the Azerbaijani government through the Ministry of Economy and 49% – by the State Oil Company of Azerbaijan (SOCAR).

* The cost of the project Stage-2 development of the gas condensate field Shah Deniz is currently estimated at $ 23.8 billion. The annual volume of production in Stage-2 will make 16 bcm per year, of which 10 billion will be sent to Europe, and 6 billion to Turkey. Gas supplies to Europe will begin in 2020.

Participants of the Shah Deniz project also are BP (operator, 28.8%), SOCAR (16.7%), Petronas (15.5%), Lukoil (10%), NICO (10%) and TPAO (19%).

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