The European Bank for Reconstruction and Development (EBRD) Board of Directors has approved US$500 million in financing for Trans Anatolian Natural Gas Pipeline (TANAP), a statement from the Bank said on Wednesday.
The project will help finance the delivery of crucial energy supplies from the Caspian Sea through to Europe along the Southern Gas Corridor (SGC) and make an important contribution to energy security and diversification, according to the statement.
The EBRD financing will fund the completion of the TANAP that passes through Turkey, the Bank said.
The borrower of the financing is the Southern Gas Corridor Closed Joint Stock Company, which is 51 percent owned by the Republic of Azerbaijan and 49 percent by Azerbaijan's State Oil Company.
The borrower - SGC Closed Joint Stock Company - is a 58 percent shareholder in TANAP and manages the Republic of Azerbaijan's interest in the project.
TANAP is a key component of the Southern Gas Corridor, which will strengthen Europe’s energy security, will promote interconnectivity and open gas markets, the statement said.
It will also help provide better energy supply mix for consumers in the Balkans and southeastern Europe as well as achieve significant CO2 reductions through the substitution of obsolete coal-fired power plants, according to the statement.
"The Bank’s engagement in the project will ensure adherence to the highest environmental standards and allow continuing extensive policy dialogue with all stakeholders of SGC," the statement read.
The Southern Gas Corridor includes gas infrastructure investments in a 3,500-kilometer-long pipeline running through six countries at a total cost of $40 billion.
The key components are the Shah Deniz offshore gas field in Azerbaijan, the Southern Caucasus Pipeline in Azerbaijan and Georgia, TANAP in Turkey and the Trans Adriatic Pipeline (TAP) through Greece, Albania and Italy. The initial annual throughput capacity will be up to 16 billion cubic meters, which is equivalent to the annual energy consumption of more than 10 million households in the region.
By Nuran Erkul
Anadolu Agency
energy@aa.com.tr