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EIB grants $1.15bn loan to fund $8.6bn TANAP pipeline project

EBR Staff Writer Published 16 March 2018

The European Investment Bank (EIB) has granted €932m ($1.15bn) loan to fund the construction of $8.6bn Trans-Anatolian Natural Gas Pipeline (TANAP) project that aims to transport natural gas from Azerbaijan to Europe.

The 1850km TANAP, which has already secured funding from the European Bank for Reconstruction and Development (EBRD), the World Bank and Asian Infrastructure and Investment Bank (AIIB), will bring natural gas from Azerbaijan’s Shah Deniz-2 gas field to Europe.

The EIB financing for the pipeline is part of a total of €8bn approved by the bank to fund 34 projects in education, energy, telecom and local businesses in the European Union, Africa, Asia and Latin America.

Planned to be commissioned in 2018, the TANAP pipeline will form the key part of the $40bn Southern Gas Corridor (SGC) project, which aims to improve the security and diversity of the EU’s energy supply.

Apart from TANAP, the SGC also features the South Caucasus Pipeline (SCP) in Azerbaijan and Georgia and the Trans-Adriatic Pipeline (TAP) that would pass through Greece, Albania and Italy.

EIB president Werner Hoyer said: “In spite of the improving business confidence in Europe, significant investment gaps remain.

“To address these, the EU Bank has today backed exciting new projects that will enable companies to expand, tackle transport bottlenecks, harness clean energy sources and cut energy bills for European citizens.

“This as well as a massive investment program for research and innovation in Spain will contribute to increasing the competitiveness of the EU economy.”

Through the TANAP project, natural gas produced from the Shah Deniz-2 offshore gas field and other areas of the Caspian Sea is delivered mainly to Turkey and other parts of Europe.

The TANAP pipeline is jointly owned by Azerbaijan's state-owned oil company Socar (58%), Turkish oil and gas group Botas (30%) and BP (12%).

In 2016, the World Bank had approved a loan of $800m for the development of TANAP.

Image: TANAP project is under construction. Photo: courtesy of TANAP.