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bne March 2018 Companies & Markets I 19
EIB to go ahead with controversial €1.5bn loan for TAP pipeline
Clare Nuttall in Bucharest
The European Investment Bank (EIB) has approved €1.5bn of financing for the Trans-Adriatic Pipeline (TAP), which will carry gas from the Caspian to southern Europe.
The EIB decision, made by its board on February 6, follows heavy pressure from environmental groups who argued that the development bank should avoid investing in major fossil fuel projects.
“TAP was a large project with
a number of due diligence issues that merits proper discussion”
The pipeline, currently under construction, is a key part
of the Southern Gas Corridor. It is intended to connect to infrastructure carrying gas from Azerbaijan’s giant offshore Shah Deniz II field to the Turkish-Greek border and on across Greece, Albania and the Adriatic Sea to southern Italy.
The EIB funding was approved by the bank’s board as part
of a total of €6.5bn in new financing for 36 projects in 17 EU countries as well as projects in Africa, Asia and Latin America.
These also comprised funding for renewable energy investments including a new 17MW wind farm in Austria, a hydropower plant on the Nenskra river in Georgia and medium-sized renewable energy projects across Africa.
The bank said its decisions reflected the “EIB’s commitment to support both renewable energy and strengthen security of energy supply”. Its February 6 statement noted that the TAP project was a strategically important component within the EU’s energy policy.
In December, the EIB decided to delay its decision on a
Welded steel pipes are lowered into trenches on the TAP route in northern Greece.
€1.5bn loan for the TAP, with a spokesperson telling bne IntelliNews that the delay was because TAP was a “large project with a number of due diligence issues that merits proper discussion”.
The news of the delay broke on the day of the One Planet Summit at which dozens of major international financial institutions, including the EIB, affirmed their commitment to the fight against climate change, but according to the
EIB spokesperson this was coincidental. The World Bank announced on the same day it would end funding for oil and gas exploration and gas extraction projects.
Several environmental groups have criticised the EIB’s decision to fund TAP, claiming in a joint statement that the Southern Gas Corridor “could be as emissions-intensive or even more so than coal power” and detrimental to the EU’s efforts to cut greenhouse gas emissions.
The TAP project was the subject of additional controversy when it was later revealed that top European Commission officials had been lobbying the two development banks to extend financing for the pipeline infrastructure between Azerbaijan and Europe.
Miguel Arias Canete, the EU's climate change and energy commissioner, and Maros Sefcovic, vice president of the European Commission, were found to have sent a letter
to the EIB and the EBRD urging them to finance a gas pipeline running from Azerbaijan to Europe, Climate Home News revealed on November 27.
The European Commission released the letter, which was dated July 13, 2017, under freedom of information laws. In it, Arias Canete and Sefkovic urge Werner Hoyer, the EIB president, to support a project that the European Union has deemed as of common interest, namely the Southern Gas Corridor. bne IntelliNews was told that Hoyer was resisting pressure to sign off on the financing.
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