Boosted by 4 bln euro loan, nabucco pipeline to be functional by 2015
Three leading international financial institutions are preparing to loan a potential €4 billion to the Nabucco pipeline project – a project that aims to reduce Europe's dependence on Russian energy supplies and could make Turkey an indispensable energy route for its neighbors. In order for the much-awaited project to begin, officials from the European Union, European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC) – a World Bank Group affiliate – met in Brussels on Monday where they signed a letter of authorization for the large loans. Under the agreement, the Nabucco Gas Pipeline International GmbH and its partners – including the Turkish Pipeline Corporation (BOTAS) and the three financial institutions, the EIB, the EBRD and the IFC – will provide loans to the project of up to €2 billion, €1.2 billion and €800 million, respectively. Speaking at a press conference following a ceremony formalizing the deal, Reinhard Mitschek, managing director of Nabucco Gas Pipeline International, said an important step had been taken. He added that he expects the loans to be approved next year and that he hopes the pipeline will be able to carry 18 billion cubic meters of Azeri and Iraqi natural gas to Europe by late 2014 or early 2015. Additional supplies from producer countries in the region, including Turkmenistan and Egypt, could also be transported in later years, Mitschek added. Also speaking to reporters, BOTAS General Director Fazil Senel elaborated on the significance of Monday's agreement and on the project's possible benefits to Turkey. He said Turkey is one of the masterminds of the Nabucco pipeline, also known as the "Turkey-Austria gas pipeline." "We're supporting every step necessary for the project's completion," he said. "Today's signatures provide proof of the contributions these three important financial institutions will make. It is an important step for realization of the project. Seventy-five percent of the Nabucco pipeline will be on Turkish soil – and it will make substantial contributions to the places it passes through. Our producers, industrialists and our people will benefit from the project." The 3,300-kilometer project will have an annual capacity of 31 billion cubic meters of gas and is expected to cost €7.9 billion. If it becomes fully operational, the project will meet 5 percent of Europe's annual energy demand, which is expected to reach 600 billion cubic meters by 2020.