ADB May Extend Financial Support to TAPI

The Asian Development Bank (ADB) may offer financial support to the TAPI gas pipeline project if requested, a source in ADB’s external relations department has told Trend News Agency.

"ADB continues to be in discussion regarding its role taking the [TAPI] project forward in all aspects," the source said. ADB was appointed the transaction advisor for the TAPI gas pipeline project in November 2013. It has already provided more than $4 million in technical assistance grants to date for the project's pre-feasibility studies, risk analysis and mitigation, legal advice, market analyses, and security studies, among others, Trend stated.

TAPI being a large project requires a strong coalition of financiers. According to the source, financing for the project would be in the form of equity and debt.

"Contribution of each party will be determined once we know the total project cost upon completion of the detailed design and due diligence process," the source said.

Last week, Government of Turkmenistan allocated more than $45 million to finance the initial phase of construction of the TAPI gas pipeline at the Afghan-Pakistan segment. The $45 million allocated by Ashgabat is in accordance with an investment agreement signed by TAPI countries earlier this year. In April, Turkmenistan, Afghanistan, Pakistan and India (TAPI) agreed to invest $200 million in the next stage of the multibillion dollar TAPI pipeline project.

The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years. 

In recent weeks, Turkemnistan has held talks regarding financing of the project with international agencies such as Islamic Development bank, the Saudi Fund for Development and the Japanese government. These international entities are expected to participate in areas of trade, supply equipment, financing through provision of loans and investment in the TAPI project and in development of the Galkynysh gas field.