A major European development bank has approved a loan for construction of the Trans-Adriatic Pipeline (TAP) on Wednesday, in a boost for the developers of the 4.5 billion euro gas project.
The European Bank for Reconstruction and Development (EBRD) said its board of directors has approved a direct loan of up to 500 million euros ($583 million) for TAP.
TAP, the final leg of a $40 billion project called the Southern Gas Corridor to transport gas from central Asia to western Europe, is a cornerstone of the European Union’s energy security policy to wean the bloc off Russian gas supplies.
The European Investment Bank approved a 1.5 billion euro ($1.75 billion) loan earlier this year for TAP and further contributions from the export credit agencies of France, Germany and Italy are currently under consideration, the EBRD said in a statement after the board meeting.
EBRD directors were asked to approve a total loan amount of up to 1.2 billion euros, sources familiar with the matter said. Apart from the direct loan, the rest would be a syndicated loan. However, the exact amount of that will depend on the success of syndication.
The EBRD said the pipeline will make a “significant contribution” to the diversification of Europe’s energy supply.
“It will also help make energy supply for consumers more reliable, as well as achieve significant carbon dioxide reductions by providing a cleaner fuel, as compared to coal,” it added.