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Azerbaijan can revise state guarantee for loans on South Gas Corridor

Business Materials 11 April 2018 16:04 (UTC +04:00)
The state guarantee for loans granted for realization of the South Gas Corridor (SGC) project can be replaced
Azerbaijan can revise state guarantee for loans on South Gas Corridor

Baku, Azerbaijan, April 11

By Anvar Mammadov - Trend:

The state guarantee for loans granted for realization of the South Gas Corridor (SGC) project can be replaced, Azerbaijan's Finance Minister Samir Sharifov told reporters in Baku on April 11.

"The Southern Gas Corridor (SGC) CJSC is engaged in financing the SGC project. The company was created especially for this purpose. To finance the company's share in the consortium, we borrowed loans under a state guarantee," the minister said.

He explained that according to international practice, lending requires a bank guarantee, but since the company was new, the guarantee was provided by the state.

"However, after the full operation of the gas pipeline, we can consider replacing state guarantees with private ones," Sharifov said.

The minister said that loans issued by various international financial organizations also demonstrate the success of the SGC project.

"Such international financial organizations as the World Bank (WB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) have allocated funds for this project, and the Multilateral Investment Guarantee Agency (MIGA) has also decided to grant a loan for the SGC project," he said.

Presently, the SGC CJSC continues negotiations with MIGA on the loan agreement, Sharifov added.

The Southern Gas Corridor is one of the priority projects for the EU and provides for the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.

At an initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Shah Deniz Stage 2, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).

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