ASHGABAT (TCA) — The Islamic Development Bank will provide a $700 million loan to finance the construction of the Turkmen section of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. The agreement was signed in Washington, DC during the recently-held IMF-World Bank Annual Meetings. The State Bank for Foreign Economic Activities represents the Government of Turkmenistan in that agreement, the State News Agency of Turkmenistan reported.
The State Bank for Foreign Economic Activities of Turkmenistan is the official agent of the Government of Turkmenistan in the international capital market and attracts medium- and long-term foreign loans to finance strategic investment projects.
In April 2016, the shareholders of the TAPI Pipeline Company Limited (TPCL) signed an Investment Agreement in a ceremony witnessed by petroleum ministers and senior government officials of Turkmenistan, Afghanistan, Pakistan and India, and senior Asian Development Bank (ADB) officials. The document paved the way for long-term natural gas supplies that will give a major boost to the signatory countries’ economies and energy security, the ADB said at the time.
The Investment Agreement provides an initial budget of over $200 million to fund the next phase of the development of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. This includes funding for detailed engineering and route surveys, environmental and social safeguard studies, and procurement and financing activities, to enable a final investment decision, after which construction can begin. Construction is estimated to take up to 3 years.
TPCL will build, own, and operate the TAPI pipeline, which, once completed is expected to transport up to 33 billion cubic meters of natural gas annually from Turkmenistan to Afghanistan, Pakistan and India over 30 years. The pipeline stretches about 1,600 kilometers from the Afghan-Turkmen border to the Pakistan-Indian border.
Acting as TAPI secretariat since 2003 and as transaction advisor since 2013, ADB has been instrumental in the progress of the TAPI pipeline to date. In the latter role, ADB helped establish TPCL, select Turkmengaz as consortium leader, and finalize the Shareholders and Investment Agreements.
