ADB supports financing to expand Azerbaijan gas field

The Asian Development Bank (ADB) will be providing USD 1B in private and public sector assistance to expand Azerbaijan’s Shah Deniz II, one of the world’s largest gas fields. The assistance comprises a USD 500M private sector loan to the Southern Gas Corridor Closed Joint Stock Company (SGC) and a USD 500M sovereign-counter guaranteed partial credit guarantee. The guarantee will back USD 526M in commercial loans made by a consortium of international banks to SGC, which is 51% owned by the Azerbaijan government and 49% by the State Oil Company of the Azerbaijan Republic.
The ADB assistance will provide additional revenues that the government can direct to social spending and to continued efforts to diversify the hydrocarbon-dependent Azerbaijan economy.
“The expansion of the Shah Deniz gas field is key for Azerbaijan’s economy, providing the country a long-term revenue stream and diversifying its gas exports to Europe,” said Sean O’Sullivan, ADB Director General for Central and West Asia Department. “ADB’s support will help generate economic opportunities for the private sector, create thousands of jobs, and help boost Azerbaijan’s ties with neighboring countries and Europe.”
The total cost of the Shah Deniz II expansion project, being developed by a consortium of companies, is expected to top USD 26B. BP will build and operate the project facilities. Production from the project is expected to begin in 2018.

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