SGC reveals plans on funds to be raised

Oil&Gas Materials 13 October 2017 18:35 (UTC +04:00)

Baku, Azerbaijan, Oct. 13

By Maksim Tsurkov – Trend:

The Southern Gas Corridor CJSC plans to additionally raise $3.1 billion (excluding expenses for servicing current debts) for the SGC project by 2020, Afgan Isayev, director general of the company, said Oct. 13.

“In addition to the funds raised so far to finance Azerbaijan’s share in the Southern Gas Corridor (SGC) project, another $3.1 billion is required by 2020,” Isayev said.

He added that negotiations on financing the project continue with a number of financial institutions.

“The Board of Directors of the European Bank for Reconstruction and Development (EBRD) is expected to issue a decision next week regarding a loan worth $500 million for the Trans Anatolian Natural Gas Pipeline (TANAP),” Isayev said.

The Southern Gas Corridor CJSC expects to receive a loan worth $524 million for 15 years from the Asian Development Bank (ADB) for the Shah Deniz Stage 2, he added.

“Also, negotiations are underway with MIGA (Multilateral Investment Guarantee Agency) for allocation of $750 million for a period of 15 years for the TANAP project.”

“Talks are also underway with Germany’s Hermes Insurance Company for allocation of a loan worth $1.2 billion-$1.5 billion for 15 years under German Untied Loan Guarantee Scheme (UFK) for the TANAP and Shah Deniz Stage 2 by a syndicate of banks which includes Germany’s KfW Development Bank and Citibank,” he noted. “The European Investment Bank (EIB) is conducting a detailed study of the TANAP project, and the bank is ready to allocate $500 million for up to 18 years for the project’s financing.”

He added that the Southern Gas Corridor CJSC doesn’t plan to issue Eurobonds in the near future, despite the great interest from investors.

The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.

At the 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 Stage 2 of the Shah Deniz development, 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 and Trans Adriatic Pipeline.