Azerbaijan Lands More ADB Funds

Two months after signing a $500mn credit deal with the European Bank for Reconstruction and Development (EBRD), the Azerbaijan state Southern Gas Corridor Company (SGCC) said December 22 that it sealed another syndicated loan with Asian Development Bank (ADB) worth $542.5mn. In May it signed a 15-yr loan with the same lender, for a similar amount: $500mn. 

The loans date back to a memorandum of understanding, signed December 2016, where ADP approved up to $1bn in  loans.

SGCC CEO Afgan Isayev said that the company’s share of the Southern Gas Corridor financing costs – including the existing Shah Deniz 1 and South Caucasus pipeline projects – would be $11.5bn until 2020. Of that, about three quarters – $8.4bn – has already been invested.

Azerbaijan established SGCC in 2014, the government owning directly 51% and state-run Socar owning the rest, as the vehicle that will consolidate, manage and finance the country’s interests in SD 1&2 and the three elements of the SGC: South Caucasus Pipeline and its expansion; Trans Anatolian Pipeline (Tanap), and Trans Adriatic Pipeline (TAP).

The country is preparing to start SD2 gas to Turkey in mid-2018, then the flow increases to 16.18bn m³/yr by early 2021, of which 10bn m³/yr goes to the EU. Isayev said that during the current year, some $2.3bn have been invested in SGC. “As of now, SD2 is 98.5%-complete, SCPX 99.2%, Tanap about 87.4% complete and TAP around 60.8% done, he said.