EBRD Signs $500mn Credit Line with Azeri SGC Co
The European Bank for Reconstruction & Development (EBRD) signed a $500mn credit deal with Southern Gas Corridor Company (SGCC) October 18. The loan would be allocated to completion of the 1,802-km Trans-Anatolian Pipeline (Tanap). The repayment period is 18 years. It is a part of the 3,187-km Southern Gas Corridor, aimed to transit 16bn m³/yr Shah Deniz phase 2 gas to Turkey and EU by 2020.
As of September 2017, shareholders have invested some $4.6bn in Tanap, while its total costs are about $8bn. SGCC has a 58% stake, BP 12% and Botas 30%. In total, SGCC has spent $7.8bn on SGC, or 66% of its envisaged financial obligations. SGC has an estimated investment cost of $41.5bn. SGCC’s share of funding its commitments in all projects (including Shah Deniz and South Caucasus Pipeline) till 2020 is about $11.8bn.
SGCC is directly and indirectly wholly owned by the Republic of Azerbaijan, with 51% owned by the economy ministry and 49% by Socar. SGCC has a 6.67% stake in Shah Deniz and South Caucasus Pipeline projects (with further 10% stakes owned by Socar), a 58% interest in Tanap, and a 20% stake in TAP.
The funding of SGCC’s stake in the projects was carried out through equity injections from the ministry of economy and Socar totalling $2.4bn; a $2.5bn issue of SGCC bonds to the state oil fund (Sofaz), direct loans from the World Bank's International Bank Reconstruction & Development and Asian Infrastructure Investment Bank for $0.4bn and $0.6bn respectively as well as eurobonds worth $2bn.
In addition to the revenues generated from the operation of existing projects and reinvested in the Southern Gas Corridor, the company envisages raising of up to $3.1bn of debt backed by sovereign guarantee by the end of 2020, when all four new projects (SD2, SCPX, TANAP and TAP) will have already become operational, the CEO of SGCC Afgan Isayev told NGW.
Isayev said that discussions in regard to external debt raising are ongoing with the European Investment Bank (EIB), the Asian Development Bank (ADB) (guaranteed facility), the Multilateral Investment Guarantee Agency (Miga), Germany's UFK and banks intending to lend under ADB, MIGA and UFK facilities.
He added that, as of today, SGCC does not plan to arrange a further eurobonds issue.
Dalga Khatinoglu, Ilham Shaban
I