ADB approves Shah Deniz2 loan

The Asian Development Bank (ADB) has approved a $1bn loan for the expansion of the Shah Deniz gas field development, one of the world’s largest, the bank announced December 7.

The assistance comprises a $500mn private sector loan to the Southern Gas Corridor company (SGCC), an Azerbaijan government entity set up for the project implementation and funding a state share in it.  

The other half comes as a credit guarantee backing $526mn in commercial loans made by a consortium of international banks to SGCC, which is 51% owned by the Azerbaijan government and 49% by the state oil company Socar.

The ADB assistance will provide additional revenues for the government that can be directed to social spending and to continued efforts to diversify the country's hydrocarbon-dependent economy, it said in a statement.

“ADB, through its private sector window, has already demonstrated strong support to the Shah Deniz gas field expansion through its direct assistance to this project in 2015,” said Michael Barrow, of ADB’s private sector operations director general. “The proposed assistance to Southern Gas Corridor is a continued testament to ADB’s belief in the development impact of this important project, and the importance of crowding in commercial capital to support Azerbaijan’s funding needs for the project.”

Azerbaijan desk

More details on the progress of the Southern Gas Corridor in the next edition of NGW, published December 14