The Asian Infrastructure Investment Bank (AIIB) has approved its biggest loan so far for the construction of a gas pipeline connecting Azerbaijan to Turkey and Southern Europe.
The Beijing-based AIIB will lend US$600 million to the Trans-Anatolian Natural Gas Pipeline Project (TANAP) which, when completed, will transport natural gas from fields in Azerbaijan through Georgia into Turkey and then onto markets in Southern Europe.
The bank said investment in the project, which will be financed together with other multinational lenders including the World Bank as well as commercial investors, was vital for linking the South Caucasian country with new markets.
“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,” AIIB Vive-President DJ Pandian said in a statement on Wednesday.
Construction of the 1,850-kilometre pipeline, which is owned by the State Oil Company of Azerbaijan Republic, Turkey’s BOTAŞ Petroleum Pipeline Corporation and BP, is expected to complete by 2018 and cost around US$8.5 billion.
The pipeline is part of the European Union’s Southern Gas Corridor initiative which aims to improve the security and diversity of the 28-nation bloc’s energy supply by bringing natural gas from the Caspian region.
Source: Pechristener/Wikipedia.
Loans worth US$1.73bn during first year
The loan to the Azerbaijan gas pipeline is the ninth so far for the AIIB, which was established by China to fund infrastructure projects in Asia and started operations in January with 57 member countries and US$100 billion in committed capital.
It brings the total amount lent by the bank in its first year of operation to US$1.73 billion, exceeding the target of US$1.2 billion.
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