EBRD's governing body confirmed giving of credit in the amount of $250 m. for the project of pipeline Baku-Tbilisi-Jeikhan building

/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]