EBRD names conditions for financing Southern Gas Corridor expansion project

The European Bank for Reconstruction and Development (EBRD) is ready to conduct a comprehensive assessment of the Southern Gas Corridor (SGC) expansion project if a request for its financing is received, Nataly Mouravidze, head of the EBRD Resident Office in Azerbaijan, said in an interview with Report.

"We want to ensure that our investments contribute to a sustainable future. When it comes to large-scale energy infrastructure projects, we believe it is essential that they not only address today’s energy needs but are also aligned with the future transition.

The decision on expanding the SGC rests with the Azerbaijani authorities. If they decide to approach the EBRD for financing, we will of course work with them to assess the project. But we will have to consider various factors including our Paris Agreement obligations," she noted.

The Southern Gas Corridor covers the second stage of the Shah Deniz project, the expansion of the South Caucasus Pipeline (Baku - Georgia - border with Türkiye), the construction of the Trans-Anatolian Natural Gas Pipeline (TANAP) from the eastern to the western border of Türkiye and the Trans Adriatic Pipeline (TAP) connecting Greece, Albania and the southern part of Italy.

The total cost of the project was estimated at $45 billion, but its implementation cost $33 billion. The EBRD allocated a loan of $500 million in 2018 to finance the construction of TAP. The initial capacity of the SGC was 16 billion cubic meters per year. Of this, 10 billion cubic meters of gas were intended for deliveries to Europe, and 6 billion cubic meters - to the western regions of Türkiye.

Gas deliveries to Türkiye began in the summer of 2018. Exports of Azerbaijani gas from the Shah Deniz field to Europe for consumers in Italy, Greece and Bulgaria started on December 31, 2020. The possibility of increasing TAP capacity by the end of 2027 to 16-20 billion cubic meters per year is being considered. Azerbaijan supplies natural gas to 12 countries.

Full interview is available here