Government of Azerbaijan and ADB sign loan agreement to support "Shah Deniz" project

Baku. 8 May. REPORT.AZ/ Within the framework of ADB Board of Director's 50th annual meeting in Yokohama, Japan, May 6-8, a loan agreement worth $ 500 mln was signed between Azerbaijan’s "Southern Gas Corridor" CJSC and Asian Development Bank (ADB) in order to support development of ”Shah Deniz" gas-condensate field.

Report informs, the agreement was signed by "Southern Gas Corridor" CJSC CEO Afgan Isayev and Deputy Director General for ADB's Private Sector Operations Department Michael Barrow. The contract guarantee of loan agreement was signed by the Azerbaijani Minister of Finance Samir Sharifov on behalf of the Government of Azerbaijan and Asian Development Bank's (ADB) Vice-President Diwakar Gupta.

Notably, on December 7, 2016, ADB's Board of Directors made a decision on granting a guarantee for allocation of $ 500 mln loan on the basis of state guarantees for 15 years, as well $ 526 mln syndicated loan for 15 years for funding of the missing part of funds required for the company in "Shah Deniz" gas-condensate field development project.

ADB was founded in 1966, it has 67 member states. Azerbaijan was adopted as a member of ADB on December 22, 1999. Azerbaijan hosted 48th annual meeting of ADB's Board of Governors in 2015.

Azerbaijani Minister of Finance Samir Sharifov said that besides participating countries, the project is supported by ADB, the World Bank, Asian Infrastructure Investment Bank and other international financial institutions. It is a good example of trust and confidence in Azerbaijan and the SGC project carried out with its leadership and initiative. It is not accidental that the President of Azerbaijan stressed that this project is of a great importance, not only for our country, but for energy security of Europe and whole region, adding that Azerbaijan is a driving force in realization of this project.

"Southern Gas Corridor" CJSC CEO Afgan Isayev noted that "Southern Gas Corridor" project will contribute to Azerbaijan's economy and gave information on works done: "$ 6.6 bln, about 53% of total required amount (approximately $ 12.4 bln) on "Southern Gas Corridor" project for the years 2014-2019 has been implemented by the company. So far $ 799.3 mln of this amount have been invested since beginning of 2017. Within the project, 92.0% of works for the second phase of the development of "Shah Deniz" gas-condensate field (the first gas production), 83.8% for the South Caucasus Pipeline Expansion (SCPX), 69.0% of works on TANAP's construction, 40.3% of works on TAP project have been implemented. Construction is successfully underway."

The purpose of "Southern Gas Corridor" project is a full-scale development of "Shah Deniz" gas-condensate field (SD-2), ensuring export of the produced gas to Turkey and Southern Europe via the South Caucasus Gas Pipeline (SCGP) to be expanded, as well as via TANAP and the Trans-Adriatic Pipeline (TAP) to be built.

Notably, "Southern Gas Corridor" CJSC is a closed joint-stock company (CJSC), which established under the order of Azerbaijani President "On some measures regarding the second stage of Shah Deniz gas and condensate field and other projects on establishment of the Southern Gas Corridor", dated February 25, 2014, No. 287, and 51% of state-owned shares belongs to Azerbaijani Ministry of Economy, 49% to SOCAR.