Azerbaijan Seeks More Funds for Southern Corridor

Azerbaijan is seeking to attract more funds for the Southern Gas Corridor Company (SGCC) which will oversee the laying of a pipeline from the Shah Deniz field offshore Azerbaijan, crossing Georgia, Turkey, Greece and Albania and ending in southern Italy.

SGCC, which was set up to realise the project, is planning to raise a further $1bn in Eurobonds and borrow $500mn from the World Bank. "Azerbaijan appealed to the World Bank for a loan of $500mn, the talks are under way”, said a source at the bank's office in the country. The beneficiary of the loan will be SGCC, WB said, adding that the process should be wrapped up by the end of the year.

BP's Shah Deniz platform, the starting-point of the southern gas corridor (Credit: BP)

If approved, the loan will be available under the state guarantees, said the WB local office. SGCC is planning a second $1bn bond issue till the end of this year, the company general manager Afgan Isayev said, Bloomberg reports. The company raised $1bn in a 10-year Eurobond at 6.875% yield in March, but it met only half of its target. The government and SGCC are in talks with Asian bank and European Bank for Reconstruction and Development for funding too.

ADB said earlier that a loan of about $2bn for the southern gas corridor was under consideration with decision planned for this summer. From the development of Shah Deniz 2 gas development in the Caspian Sea to the Italian end of the Trans Adriatic pipeline, the project’s value is put at $45bn.

Kama Mustafayeva