World Bank to Approve Tanap Loan in July
The World Bank and European Investment Bank (EIB) have indicated preliminary dates for the approval of more than $2bn in loans for the Trans Anatolian pipeline (Tanap) project across Turkey that, once built, will flow natural gas from the Caspian region to Europe.
According to information on the World Bank's website, the date when its board will decide on the allocation of a loan of about $1bn for Tanap's construction has been set for July 7. The loan will be provided through its subsidiary, the International Bank of Reconstruction and Development.
It is expected that a further €1bn ($1.13bn) will be allocated for Tanap by the EIB. The exact approval time for the EIB loan has not revealed yet, but it is likely to be after the World Bank's decision, so in the second half of the year, Turkish Anadolu agency reported.
The funding will be used by Turkey’s pipeline monopoly Botas, which holds 30% interest in Tanap and will itself invest $780mn in the project.
According to earlier reports, the long-term loans for Botas will probably be provided under state guarantees.
Proposed bank loans and/or guarantee assistance to the Southern Gas Corridor closed joint stock company are expected to be of the same order of magnitude, the World Bank document says.
The SGC joint stock company was established by the Azerbaijan’s government and Socar as the joint investment vehicle for the Southern Gas Corridor project and holds a 58% share in Tanap.
As yet unspecified export credits will provide $5.7bn financing and $1.2bn will come from foreign private commercial sources, the World Bank says.
Tanap's route starts on Georgia’s border with Turkey and runs 1,820 km westward to the Turkish-Greek border. The project has two compressors, 49 valves, plus four metering, two pigging and two off-take stations.
The $9.8bn Tanap project will form part of the overall $ 45bn Southern Gas Corridor that includes also the upstream Shah Deniz 2 gas development in Azerbaijan's sector of the Caspian Sea, plus an expanded South Caucasus pipeline and the new Trans Adriatic Pipeline.
Tanap and TAP will be connected near the Evros/Meric river crossing between Greece and Turkey, but it is not yet decided which of the two will actually be built over the river itself. Discussions on this are under way.
The Southern Gas Corridor will facilitate the tripling of Azerbaijan's gas exports and improve the security and diversity of energy supplies to Turkey and Europe by delivering 6bn m3/yr of gas to Turkey and 10bn m3/yr from Shah Deniz-2 for the European market, primarily Italy.