SOFAZ to start funding TANAP in 2013
Azerbaijan, Baku, Nov. 9 /Trend A.Akhundov /
The State Oil Fund of Azerbaijan (SOFAZ) will start funding the project of Trans Anatolian pipeline (TANAP) in 2013, the Executive Director of the fund Shahmar Movsumov stated on Tuesday within the discussions of the draft budget for 2013 and the next three years at a joint meeting of five parliamentary committees.
The TANAP project envisages the construction of a gas pipeline from Turkey's eastern border to the western border to transport gas from Azerbaijan's offshore Shah Deniz field to Europe through Turkey.
On June 26, 2012, Azerbaijan and Turkey signed an intergovernmental agreement on TANAP's implementation.
Currently, Turkish BOTAS owns 20 per cent share in TANAP, while SOCAR has a 80 percent share. The initial capacity of the pipeline will be 16 billion cubic meters.
"In addition, in 2013 the State Oil Fund is planning to join financing of the project on construction of oil and gas petrochemical complex in Garadagh district of Baku," Movsumov said.
According to him, most of the SOFAZ expenses in the amount of 11.35 billion manat will be directed to the state budget as a transfer.
"Some 300 million manat will be contributed to measures on social and living issues of refugees and internally displaced persons and their settlement, 107.4 manat will be allocated to completion of the reconstruction project of the Samur-Absheron irrigation system, 138 million manat - to finance the new railway project of Baku-Tbilisi-Kars, 34 million manat - to State programme on education of Azerbaijan youth abroad in 2007-2015," Movsmov said.
In his words, one of the new projects which will be financed by SOFAZ in 2013, is the construction of high-speed fiber optic network, providing access to all the cities and towns in the country.
According to him, the SOFAZ revenues in 2013 are formed on the basis of oil price at $ 100 for a barrel, as it was set in the national budget for next year.
SOFAZ revenues for the coming year are projected at $ 11.819 billion manat, expenses - at 13.599 billion manat.
SOFAZ was established in 1999 when its assets amounted to $271 million. As of Jan. 1, 2011 SOFAZ assets amounted to 22.8 billion and the Fund's current assets have already hit $32 billion.
Based on SOFAZ's regulations, the funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems. In 2001-2009 special attention was drawn to the development of the oil and infrastructure sectors, as well as the non-oil sector of the country. At the moment, a number of important projects in irrigation and transportation are financed at the expense of the funds. The main purposes of the fund are: accumulation of funds and placement of the fund's assets abroad to minimize the negative impact on the economy, preventing a "Dutch syndrome" to ensure savings for future generations and to maintain the current socio-economic standard in the country.
The official exchange rate on Nov. 6 is 0,7849 AZN / USD.