By Nigar Abbasova

The World Bank and Azerbaijan signed a loan agreement on Trans-Anatolian Natural Gas Pipeline project (TANAP) on January 16.

The project will transport natural gas from the Shah Deniz gas field in Azerbaijan to and across Turkey, and further to Europe, aiming to diversify Azerbaijan's gas export markets and improve the security of the energy supply in Turkey and South Eastern Europe.

The agreement was undersigned by WB Regional Director for the South Caucasus Mercy Tembon and head of Southern Gas Corridor Company Afghan Isayev, while guarantee agreement was undersigned by Finance Minister Samir Sharifov.

Tembon, addressing the ceremony, said that the agreement culminates many months of the hard work of teams from the World Bank Group and Azerbaijan.

“We strongly believe that this project will bring many benefits to the people of Azerbaijan by improving the country's regional trade and competitiveness, and expanding its exports,” she said.

The Bank earlier approved a $400 million loan for Turkey and a $400 million loan for Azerbaijan for the implementation of the TANAP project. Total cost of the TANAP project is estimated at $8.5 billion.

The recipients of funding are the Southern Gas Corridor (SGC) Closed Joint Stock Company with the guarantee of Azerbaijan and the Boru Hatları İle Petrol Taşıma Anonim Şirketi (BOTAŞ) with the guarantee of Turkey.

The project contributes to achieving the strategic objectives of the Bank's partnership with Azerbaijan, in particular, supporting stronger economic competitiveness, by integrating Azerbaijan with regional and European energy markets, strengthening its connectivity and transit role, and increasing its exports.

Turkey will get gas in 2018 and after completing the construction of Trans Adriatic Pipeline (TAP), gas will be delivered to Europe in early 2020. The overall objective of the project is to diversify Azerbaijan’s gas export markets and improve energy security in Turkey and South East Europe.

The length of TANAP is 1,800 kilometers with the initial capacity standing at 16 billion cubic meters. The construction work within the project is currently on track. So far, some 55 percent of operations have already been completed.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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