The board of the European Bank for Reconstruction and Development (EBRD) has approved up to $250 million in loans to the Baku-Tbilisi-Ceyhan (BTC) pipeline, a network that extends from Azerbaijan and Georgia to Turkey.
The endorsement follows the decision by the International Finance Corporation (IFC) to approve a similar financial package earlier this month. Agreement on the two loans comes after over two years of extensive monitoring and scrutiny of the project’s environmental and social impact, as well as a thorough public consultation process.
The loans, which attract commercial rates of interest, are conditional on the project continuing to meet its stringent public commitments, which will be subject to formal quarterly audits by the lenders, stated a press release.
The BTC pipeline will cost $2.95 billion to construct, with the balance of the finance being provided by equity investment, export credit agencies and commercial banks. Financial close is due by the end of the year.
“The involvement of both the IFC and EBRD will help ensure that this investment results in real benefits for those most directly affected – from the 450 villages along the pipeline route, to the citizens of Azerbaijan, Georgia and Turkey,” said BTC chief executive Michael Townshend.
The 1,760-kilometer pipeline will allow one million barrels of oil per day (bpd) to be exported safely and responsibly from the Caspian without increasing tanker traffic through the Turkish Straits. It is buried for its entire length and, once constructed, land will be fully re-instated above a narrow eight-meter right of way.
Landowners and land users have been compensated for disruption during the construction phase and will be able to use their land after construction, subject to restrictions imposed for safety reasons.
First oil from the pipeline, which is already around 40 percent complete, will be exported from the Mediterranean port of Ceyhan, Turkey in 2005.
Partners in BTC Co are BP, SOCAR, Unocal, Statoil, TPAO, ENI, Total, Itochu, Inpex, ConocoPhillips and Hess. The BP-operated South Caucasus Pipeline (SCP) will be built alongside the BTC line and will take gas from the BP-operated Shah Deniz field to the Georgia-Turkey border. First gas exports are expected in 2006. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
© 2000 - 2022 Al Bawaba (www.albawaba.com)