Foreign loan to be attracted to finance Azerbaijan's share in SGC project

Baku. 26 September. REPORT.AZ/ Foreign loan will be attracted by the year end and in the first months of next year to finance Azerbaijani share at the Southern Gas Corridor project, which will transport Azerbaijani gas to Europe.

Report informs, Minister of Finance Samir Sharifov said.

"Azerbaijan is represented through two institutions in the project. Certain funds have been allocated from the state budget for implementation of financial liabilities of these institutions. Other funds are planned to be attracted from foreign financial markets in the form of a loan, which will be returned from the project revenue after the launch. Talks are at the final stage with several international financial institutions. We don't predict any difficulties in regard to attract financing.

He noted attraction of 1 bln USD for the project early this year. The minister added that Southern Gas Corridor CJSC has appointed financial advisor and relevant debt strategy prepared as the question is not about a year, but several years".

According to the minister, there is no delay in the implementation of the project.

"Liabilities of the current year are fully implemented. There is no delay in fulfilment of the financial liabilities by our side and we don't predict any delay. The project is funded in accordance with the schedule," the minister added.

Notably, Southern Gas Corridor CJSC was established according to the Order of the President of the Republic of Azerbaijan dated 25 February 2014 to ensure the second phase of 'Shah Deniz' gas-condensate field operation, expansion of the South Caucasus Pipeline, management of the Trans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline (TAP) projects. The CJSC's authorized capital makes 100 mln USD. The state owns 51% of the shares and 49% belongs to SOCAR.   

According to Item 2.1 of the order, financing of direct state-owned shares of the CJSC was charged to the SOFAZ, while ownership and management of the state-owned shares to the Ministry of Economy. 

The Southern Gas Corridor project is currently estimated at 40 bln USD. 9.3 bln USD of this amount accounts for TANAP, 6 bln USD for TAP, 23.8 bln USD for "Shah Deniz-2" and South Caucasus Pipeline Expansion project. Financing of Azerbaijan's share of the project is estimated at 11.454 bln USD.