"Southern Gas Corridor" signs syndicated loan agreement under Multilateral Investment Guarantee Agency guarantee

30.06.2018,14:51


June 30, Fineko/abc.az. “Southern Gas Corridor” CJSC (“SGC CJSC”) signs a syndicated loan agreement in the amount of US$750 million under the guarantee of the Multilateral Investment Guarantee Agency (MIGA) to finance the Trans-Anatolian Pipeline (“TANAP”) project.

On 29 June of the current year, the loan and guarantee agreements were signed in relation to the syndicated loan facility to “Southern Gas Corridor” CJSC (“SGC CJSC”) in the total amount of US$750 mln (US$500 million and EUR 215 million) backed with the guarantees of the Republic of Azerbaijan (sovereign guarantee) and Multilateral Investment Guarantee Agency (“MIGA”) for the purpose of financing Trans-Anatolian Pipeline (“TANAP”) project, which is part of the Southern Gas Corridor (“SGC”) project.

The sovereign guarantee agreement in relation to the mentioned loan agreement was signed by Finance Minister Samir Sharifov on behalf of the Republic of Azerbaijan, and the loan agreement was signed by General Director of SGC CJSC Afgan Isayev.

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. The Republic of Azerbaijan became a member of the World Bank, including MIGA, in 1992.

Afgan Isayev, the General Director of SGC CJSC, briefed on the works carried out within the framework of Southern Gas Corridor projects:

"The SGC project has been financially supported by the leading international financial institutions, and Phase-0 under TANAP project, which relates to the works required for the first commercial gas deliveries to Turkey, has already been completed. First commercial gas deliveries to Turkey has commenced today, on 30 June 2018. The works planned for the delivery of natural gas to Europe through Turkey in the near future are being carried out according to the schedule.

Overall progress in works in relation to the 2nd Stage of the development of Shah Deniz gas-condensate field (“SD2”) and South Caucasus Pipeline Expansion project (“SCPX”) is 100.0% (for the 1st commercial gas deliveries), TANAP project – 94.8% and Trans Adriatic Pipeline (“TAP”) project – 74.6%.

The construction works are successfully progressing. The total cost of SD2 project is currently estimated to be US$22.7 billion (US$17.8 billion spent as of the end of May 2018), SCPX project - US$4.5 billion (US$4.2 billion spent as of the end of May 2018), TANAP project - US$8.0 billion (US$5.5 billion spent as of the end of May 2018), and TAP project - EUR 4.5 billion (EUR 3.0 billion spent as of the end of May 2018). SGC CJSC’s share of total project cost till 2020 inclusive is estimated at US$11.4 billion, of which US$9.1 billion (approximately 80%) had already been invested as of the end of May 2018.”

The purpose of SGC value chain is the implementation of SD2 project and subsequent delivery of the gas to be produced under the project via SCPX, TANAP and TAP to Turkey and Southern Europe.

SGC CJSC was incorporated pursuant to Presidential Decree No. 287 “On relevant measures related to the second stage of the operation of Shah Deniz gas-condensate field and establishment of the Southern Gas Corridor with regard to other projects” dated 25 February 2014. 51% of SGC CJSC’s share capital is held by the Ministry of Economy of the Republic of Azerbaijan and 49% by SOCAR.

Ключевые слова: TANAP