Main / Financial news / Germany to provide 1.2 billion euros to an alternative to the Turkish flow
Germany to provide 1.2 billion euros to an alternative to the Turkish flow
German is about to kick-off the funding for “Southern Gas Corridor” project that allows the gas from Azerbaijan to be supplied to Europe through Turkey.
In 2014, the President of Azerbaijan, Ilham Aliyev, official launch a decree to control the country’s interests in the growth of Shah Deniz, an offshore gas field in the Caspian Sea. This development will pave the way for the Southern Gas corridor project and support the construction and improvement of pipelines in the region.
Deutsche Welle has informed an offer from the Germany Finance Ministry’s Jens Spahn to the chair of the government’s budget committee, Peter Boehringer that allocates 1.2 billion euros to aid Azerbaijan in this development.
According to Euractiv, the Germany authorities will put 1.2 billion euros allocation in the form of a loan under the assurance of the Azerbaijani governments. The money will be withdrawn from the state program allocation to fund priority projects for Germany.
The direct receiver of the fund will be CJSC “Southern Gas Corridor”- a firm operated in Azerbaijan, which will finance the Azerbaijani part of investments.
The project picked by the European Union as an alternative option for first “South Stream”, and then- Turkish” cost total of 40 billion euros. The fund will go partly to the construction of two gas pipelines for 14 billion euros- Transanatolian (TANAP) through Turkey and Georgia, and the adjacent Trans Adriatic (TAP), which must go through the northern part of Greece, Albania, the Adriatic Sea and reach the coast of Italy.
The rest of investment will be headed to the development of the Shah Deniz field in the Caspian Sea, from where the EU makes a plan to wrap up to 10 billion cubic meters of gas per year.
German Finance Minister Jens Span, in her statement to the Bundestag Committee on Budget, believed that these investments will be a big contribution to assuring the energy security of Europe and Germany.
Besides, Berlin can also fund another 500 million euros in the form of export guarantees to finance the supply of German equipment used for construction.
In October, the European Bank for Reconstruction and Development launched the same amount of money for the TANAP project. European Investment Bank, in February, made another EUR 1.5 billion and this investment made in South Kazakhstan Territory reach a record high in history.