EBRD's governing body confirmed giving of credit in the amount of $250 m. for the project of pipeline Baku-Tbilisi-Jeikhan building
12.11.03 00:00
/Kazakhstan today, November 12, 03/ - On November 11 governing body of
European bank for reconstruction and development (EBRD) confirmed
granting of credit in the amount of $250 m. for realization of the project of
pipeline Baku-Tbilisi-Jeikhan (BTJ), informed a correspondent of KZ-today
from Baku with reference to the official message of the company BP-
Azerbaijan.
As the message notes, credits of IFK and EBRD for the project "BTJ" on the
terms of commercial interest rate have been granted on condition that during
this project realization obligations assumed to the society, will be followed
as it should be, and creditors will conduct official quarterly auditing of
assumed obligations fulfillment.
"Especially we hope to work with both these organizations over initiatives of
regional development and working out of plans for attracting population's
representatives to this project's monitoring", - said executive director of BTC
Co. Michael Townshend.
In accordance with the official message of EBRD, bank's own funds in total
sum of the credit equaling to $250 m. will equal to $125 m., and the other
$125 m. will be borrowed as a syndicated loan. And EBRD's credit will be
spent for financing building of Azerbaijan and Georgian parts of the pipeline
because this financial organization does not conduct its activity in Turkey.
The bank's message also notes that within the next 20 years Azerbaijan will
get from realization of this project, which provides for supplying Azerbaijan
oil to the world markets, from $31 bn. up to $42 bn. in dependence with oil
prices, and Georgia, as a transit country, through the territory of which the
pipeline has been laid, $508 m. within 20 years.
Besides, the bank's message says that BP and EBRD came to agreement
about joint realization of the regional initiative of development, which was
directed towards creation of long-term workplaces and viable economic
development after finishing of pipeline building. Each of these organizations
will give up to $25 m. for this initiative realization which costs $100 m.
Joining of other participants of BTC Co is also expected. First investments are
expected in the middle of 2005.
According to the data of BP-Azerbaijan, $2.95 bn. will be necessary for
building the pipeline Baku-Tbilisi-Jeikhan (total cost of the project is $3.6
bn., including interest on credits), and the remaining part of the project's
cost is formed by domestic funds and also export credit organizations and
commercial banks. Questions concerning financing are to be solved before
the end of the year.
As was informed before, as the whole credits for the project of BTJ will be
given by four groups of lenders. The first group will comprise international
financial organizations (EBRD, IFC), which will give funds by themselves,
and also give guarantees for commercial banks. The second group will
comprise export-credit agencies, which will give guarantees to commercial
banks for financing supplies of materials and equipment from six
economically developed states of the world - USA, Great Britain, Japan,
Germany, Italy and France. The third group includes commercial banks
themselves, the number of which varies between 10 and 30. The fourth
group of lenders will consist of such major companies as BP, Total and
ConocoPhillips, which are to finance the project by giving loans. BP agrees
to provide a loan for $500 m, Statoil - not less than $170m.
At present time $1.5 bn from personal shareholders' funds has been already
used within Baku-Tbilisi-Jeikhan pipeline construction project.
The stakeholders of BTJ projects are: BP (30.1%); SOCAR (25.00%);
Unocal (8.90%); Statoil (8.71%); TPAO (6.53%); ENI (5.00%); Itochu
(3.40%); ConocoPhillips(2.50%); INPEX (2.50%), Total (5.00%) и Amerada
Hess (2.36%).
The length of BTJ pipeline is assumed to be 1767 km, 443 km of which goes
through the territory of Azerbaijan, 248 km - Georgia, Turkey - 1076 km.
Carrying capacity of the pipeline is 50 m tones of oil per year. Construction
works began in April 2003, and they will be finished in the 4th quarter of
2004. the first oil delivered through the pipeline, which approximately 40%
completed, will be exported from Mediterranean port Jeikhan in 2005.
[2003-11-12]