Azerbaijan, December 21, 2016
AIIB approves $600 million to support energy project of Azerbaijan
The Board of Directors of the Asian Infrastructure Investment Bank (the Bank) today approved a loan of US$600 million, the largest so far, for the construction of a natural gas pipeline from Azerbaijan through Turkey. The Bank is co-financing this project with a number of other multilateral development banks, including the World Bank Group, and other commercial entities.
Once completed, the Trans Anatolian Natural Gas Pipeline Project (TANAP) will transport natural gas from fields in Azerbaijan into Turkey and then onto markets in Southern Europe. Investment in this energy infrastructure project is crucial for integrating Azerbaijan with new markets and enhancing energy security for Turkey, while also benefitting Europe. The construction of this pipeline will also create numerous employment opportunities in Azerbaijan and Turkey.
The latest approval brings the total amount lent by the Bank in its first year to US$1,730 million, in nine infrastructure projects across seven countries. Collectively, the Bank’s portfolio of lending so far will:
● Boost connectivity in Tajikistan and Uzbekistan with investments in new state-of-the-art roads;
● Support urban infrastructure development in Indonesia, helping the government to raise living conditions for 9.7 million slum dwellers;
● Upgrade electricity infrastructures across South Asia, bringing power for the first time to 2.5 million rural households in Bangladesh and significantly raising production capacity in Pakistan and Myanmar; and
● Help Oman diversify its economy through a dual investment in port and railway infrastructure which are interrelated and will together improve trade links from its broader hinterland of Gulf countries to the rest of the world.
President Jin Liqun said in his remarks, “I am delighted and proud that the Bank has managed to lend over $1.7 billion in our inaugural year, capped off by the latest loan which is our largest to date. Thanks to the early steps we have taken, in future years, millions across Asia will experience an improvement in the quality of their lives through better living conditions, access to power and improved transport connectivity.”
Vice President and Chief Investment Officer, DJ Pandian welcomed the latest project saying, “The approval of TANAP, which involves a number of other multilateral and private sector players, demonstrates the Bank’s capacity to assess and provide loans in even the most complex of cases. This crucial upgrade of energy infrastructure between Asia and Europe will further strengthen the economy of Azerbaijan while underpinning energy security in Turkey, as well as several countries in southern Europe.”
Notes to Editor
1. The Loan is provided to Southern Gas Corridor (SGC) company, a state owned enterprise of Azerbaijan, and fully guaranteed by the Government of Azerbaijan.
2. TANAP is a part of Southern Gas Corridor Program that consists of the development of Shah Deniz 2 gas field in Azerbaijan; construction and commissioning of 3,500 Kilometers of pipeline from Azerbaijan to Italy through Georgia, Turkey, Greece and Albania.
3. The approved US$600 million loan by AIIB is to finance the TANAP project, an 1,850 km pipeline, representing 53% of the total 3,500 km of pipeline to be constructed under the Southern Gas Corridor Program. Turkey is the host country of the Project.
4. Additional details on TANAP projects may be found at here.
5. AIIB has approved loans of US$1,730 million to support nine infrastructure projects in seven countries namely, Pakistan, Bangladesh, Tajikistan, Indonesia, Myanmar, Azerbaijan, Oman, comprising investments in transportation, energy and urban development infrastructure.
6. The AIIB, located in Beijing, aims to promote broad-based economic and social development in Asia through investment in infrastructure and other productive sectors and promote regional cooperation in addressing development challenges by working with other multilateral and bilateral development institutions.
7. For further information about the Bank please visit www.aiib.org.
Telephone: 0086 10 83580035
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