[Premium] SGCC In German Loan Talks

The Federal Republic of Germany has approved the initial stage of a $1.5bn (€1.2bn) credit guarantee to help develop the second stage of the Shah Deniz gas condensate field (SD2) and the Trans Anatolian Pipeline (Tanap) – collectively part of the Southern Gas Corridor – for Azerbaijan’s Southern Gas Corridor Company (SGCC), the SGCC’s deputy general director Rashad Mustafayev told NGW March 7.

The final terms of the loan – including the amount, the period and the repayment schedule – will be determined after the full agreement has been reached, and will involve export credit guarantor Hermes and related banks, he said without naming them.

The European Union is trying to reduce its dependence on Russian gas by developing the SGC, where German Uniper is among the buyers. The purpose of issuing this guarantee is to provide financial support to projects involving German companies. Nine European companies, including German Uniper, signed long-term gas sales contracts with Azerbaijan. Under the terms of the contract, Uniper will import 1.45bn m³/yr through the SGC in 2020-2044.

Credit:  SGCC

Earlier, The European Investment Bank (EIB) approved a loan of €1.5bn ($1.9bn) for the Trans-Adriatic Pipeline (TAP) project – the last leg of the SGC – February 7. Azerbaijan’s share was $11.5bn, of which three quarters has been paid; the remainder is due by 2020, when the project starts up.