Agreement on $400 million loan for TANAP signed

The agreement for a $400-million loan issued by the World Bank to the Petroleum Pipeline Corporation (BOTAŞ) for the Trans-Anatolian Natural Gas Pipeline (TANAP) was signed on Wednesday between Cyril Muller, vice president of the World Bank’s Europe and Central Asia region, and BOTAŞ General Manager Burhan Özcan, under the auspices of Energy and Natural Resources Minister Berat Albayrak. Stressing that the agreement signed today as part of the project is important not only for energy markets but also for economic and financial markets, Minister Albayrak said, “Today, signatures are being put on the project, which has been Turkey’s long-standing motivation in the flesh to support the projects that serve three purposes in the energy markets.”

Minister Albayrak also added, “We all know how important the energy sector is not only for Turkey, but also for the region, the world and global markets.”

Underlining that a project should mean a “win-win” for all the parties, Albayrak said, “We, as Turkey, have declared that we will be in favor of such a project if it serves the supply and security of regional and global energy markets, and perhaps most importantly, it contributes to global welfare, peace and tranquility.”

Minister Albayrak pointed out that TANAP has been a dream project for decades in the region where it has been developed.

“While we are moving toward a period in which we have nearly completed two-thirds of TANAP and we will hopefully inaugurate it next year and activate the first gas line, we are here today with the World Bank, which plays an important part in the financing of the international project, to sign a $400 million loan agreement,” Albayrak said, stressing that it is important for the Turkish economy to make a good start to 2017.

He added that the project will be helped by the financing package, especially considering recent developments in the global economy, global finance and economic markets, and for the realization of the plan and energy markets.

Announcing good news for the markets, Albayrak said that they aim to realize a financing package worth approximately $3 billion with regards to the energy projects conducted by their team at the point of not just the World Bank but also with international investment banks within the framework of energy investments.

The Trans-Anatolian Natural Gas Pipeline (TANAP) project, set to carry Azeri gas to Europe, is ahead of schedule. Previously, Saltuk Düzyol, the general manager at the Trans-Anatolian Natural Gas Pipeline (TANAP) project said 55 percent of the work for the project was completed by the end of last November.

“I hope Turkey will begin receiving 2 billion cubic meters of gas during the first phase of the project, which will ultimately bring 6 billion cubic meters of gas to the country by the end of June 2018. Given the speedy construction, TANAP’s initial investment cost of $11.7 billion has come down to $8.5 billion at the moment,” Düzyol said in mid-December.

The TANAP project aims to bring natural gas, produced from Azerbaijan’s Shah Deniz-2 gas field and other areas of the Caspian Sea, primarily to Turkey, but also onto Europe via the Trans-Adriatic Pipeline (TAP).

The project is planned to be operational in 2018 with an initial capacity to carry 16 billion cubic meters (bcm) of Azeri gas through Georgia to Turkey. While 6 bcm will be for Turkey’s domestic consumption, the rest is destined for transfer to Greece, Albania, and Italy and further into Europe.

Previously in December, the Asian Infrastructure Investment Bank (AIIB) also previously approved approximately $600 million in loans for the Trans-Anatolian Natural Gas Pipeline Project (TANAP).

The fund will be used by Azerbaijan’s Southern Gas Corridor (SGC) Company in the construction of the project. According to a statement, the loan and conditions were discussed at the bank’s Executive Board meeting, where the board agreed to provide some $600 million in loans to the SGC for the construction work of the TANAP project. The loan will be provided to the SGC under Azerbaijan’s guarantee.

D.J. Pandian, vice chairman of the AIIB, said in the statement, the loan provided to TANAP shows the bank’s capacity. He stressed that this important energy infrastructure between Asia and Europe will not only strengthen the economy of Azerbaijan, but will also ensure the energy security of Turkey and many other countries in southern Europe.

Lake Tuz storage facilityEnergy and Natural Resources Minister Berat Albayrak said they will carry out the first gas compression of the Lake Tuz storage facility on Friday with a ceremony attended by President Erdoğan.


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