The Asian Development Bank (ADB) has postponed its decision on allocating a $1.5bn loan to Azerbaijan's landmark gas project Shah Deniz II from August to September, the international financial institution (IFI) said on June 3.
Azerbaijan has already spent some $5bn from its state treasury and a combination of Eurobond issuances and loans on developing its share of the project, but remains $8bn short of financing it, according to ratings agency Fitch. The project comprises developments at the Shah Deniz II offshore gas field in the Caspian Sea, as well as a network of three interconnected pipelines that will deliver some 16bn cubic metres (cm) of Azerbaijani gas to Europe and Turkey starting in 2019.
The IFI did not explain why it has postponed its decision. Azerbaijan has also applied for a $500mn loan from the World Bank and plans to issue a $1bn Eurobond by end-2016 to raise financing for the project. The European Bank for Reconstruction and Development (EBRD) has expressed interest in financing part of the project, as well as one of the pipelines - the Trans Adriatic Pipeline (TAP).
Azerbaijan's energy minister Natiq Aliyev told journalists on June 3 that the overall cost of the project has dropped from an estimated $45bn, when it was planned in 2013, to $39.1bn due to a reduction in the cost of construction materials.
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