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    Miga Issues $1.1bn Guarantees for Tanap

Summary

The guarantee protects lenders if Baku defaults on payments.

by: Dalga Khatinoglu

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Natural Gas & LNG News, Europe, Corporate, Exploration & Production, Import/Export, Investments, Political, Ministries, Intergovernmental agreements, Caspian Focus, Infrastructure, Pipelines, Trans-Adriatic Pipeline (TAP) , Trans-Anatolian Gas Pipeline (TANAP) , News By Country, EU, Azerbaijan, Turkey

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Miga Issues $1.1bn Guarantees for Tanap

The World Bank’s Multilateral Investment Guarantee Agency (Miga) has issued $1.1bn worth of guarantees in support of the Trans Anatolian pipeline (Tanap), it said July 12. The 15-year guarantee is being offered to cover AKA Bank, Citi, Credit Agricole CIB, ING, LBBW, Santander and Societe Generale for their loans to Southern Gas Corridor Company (SGCC). SGCC is a special purpose vehicle overseeing Baku's interests in all three key sections the Southern Gas Corridor (SGC) project.

Miga's guarantees provide protection in the event the Republic of Azerbaijan fails to honour its sovereign guarantee on SGCC's payment obligations under the loans. SGCC signed July 2 a $750mn ($500mn and €215mn) syndicated loan agreement for Tanap under the Miga guarantee and Republic of Azerbaijan (sovereign guarantee).

Operator BP and its partners announced June 30 the start-up of Shah Deniz 2 in the Azerbaijan sector of the Casian Sea, including its first commercial gas delivery via Tanap to Turkey. The first stage of the 2,000-km SGC, from the Caspian shores to Eskiseher in northwest Turkey, started up May 29 in Baku. The opening ceremony of the Tanap was also held at the pipeline’s main Turkish offtake point at Eskisehir June 12.

Miga CEO Keiko Honda said the guarantees played a critical role in securing commercial financing on competitive terms. “Moreover, close co-ordination with the International Bank for Reconstruction and Development on due diligence ensures that Tanap is in line with international best practices,” he added.

Miga is an international financial-credit institution established in 1988, as a part of the World Bank Group, to encourage direct investments in member countries. The organization provides the insurance for the investments against non-commercial risks. Azerbaijan became a member of the World Bank, including Miga, in 1992. This year marks Miga's 30th Anniversary.  Over the last three decades, Miga has directly supported almost $47bn in investments for over 830 projects in 111 developing countries.

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