EU Investment Bank approves € 1.5bn loan for Trans Adriatic Pipeline (TAP)

Gas pipeline in the European Union. (Copyright: EU, 2012 / Source: EC - Audiovisual Service / Photo: Ferenc Isza)

Gas pipeline in the European Union. (Copyright: EU, 2012 / Source: EC – Audiovisual Service / Photo: Ferenc Isza)

Last week, the European Investment Bank (EIB) approved a € 1.5 billion loan for the Trans Adriatic Pipeline (TAP), a pipeline project to ship gas from Azerbaijan to Italy via Greece and Albania. The funding is part of a € 40 billion project to bring new gas supplies to Europe, the Southern Gas Corridor, and represents EIB’s largest ever single loan to an energy project. Although the TAP is expected to bring new gas supplies to Europe and reduce dependence on Russia, opponents and advocacy groups claim that the project will have negative environmental and social impact, citing human rights abuses in Azerbaijan and growing investments in fossil fuels in the Old Continent.

Background

The Trans Adriatic Pipeline is a planned 870km-long natural gas pipeline that will run from Greece via Albania and the Adriatic Sea to Italy, and further to Western Europe. The Southern Gas Corridor is expected to bring around 16 billion cubic metres of gas per year to Europe by 2020, from the giant Azeri Shah Deniz II field, crossing Georgia, Turkey, Greece, Albania and the Adriatic Sea.

The Trans Adriatic Pipeline is recognised by the European Commission as a Project of Common Interest (PCI) in the framework of the EU’s Trans-European Energy Infrastructure Guidelines. A decision about the loan was originally due on December 12 last year, but the Luxembourg-based EIB delayed it after the board claimed it needed more time to have look at the project more in depth. The funding that has been granted last Tuesday is part of a total € 6.5 billion financing approved by EIB for 36 projects in 17 European Union countries and schemes in Africa, Asia and Latin America.

Large investment

EIB Vice President Andrew McDowell told Reuters last week the TAP project would help to offset declining European production, provide a diversified source of gas and displace coal-fired power generation in central and South Eastern Europe. “The argument we are persuaded by, that made by the European Commission, is that it is simply not fair to leave large parts of Europe, particularly central and South Eastern Europe, at the mercy of a single supplier”, Mr. McDowell said.

Reuters also quoted Mr. McDowell as saying he hoped the EIB’s stamp of approval would smooth the way for the 4.5 billion euro pipeline to seek further financing from the market in the coming weeks. The international news agency has also revealed the European Bank for Reconstruction and Development is also expecting to decide on a loan for TAP this year, according to a spokesman. In October, it approved a $ 500 million loan for the TANAP pipeline, the central part of the Southern Gas Corridor, through which the first gas flows are expected in 2018.

Fierce opposition

But TAP has faced also big delays in the past months, due to massive public demonstrations, especially in Italy. Fierce protests took place in Apulia over the past two years as campaigners were trying to block the removal of centuries-old olive trees for the construction of the TAP’s Italian leg, even though the heads of the project are claiming the trees will be replaced in their original sites once construction is complete.

Most notably, green campaigners and activists highlighted the impact construction work is already having on local communities, from Azerbaijan to Europe, as well as the pipeline’s alleged incompatibility with the targets of the Paris climate deal. Colin Roche, extractive industries campaigner for Friends of the Earth Europe, said: “The European Investment Bank is now shamelessly locking Europe into decades of fossil fuel dependency, even as the window for fossil fuel use is slamming shut”. Xavier Sol, Director of Counter Balance, an alliance of European NGOs campaigning to prevent negative impacts of major infrastructure projects, described the EIB’s decision to fund TAP as “a historic mistake”.

Environmental management

TAP AG, the company established to plan, develop and build the TAP natural gas pipeline, has said that, the compan and its shareholders “take environmental, social and cultural heritage management, corporate social responsibility, and health and safety very seriously”. “The company complies with all legal requirements, implementing good international industry practice and the applicable lender standards”, an official corporate document said.

“Economic justification”

The EIB has officially assessed the economic justification of the project “as part of its due diligence”, and by claiming that the Southern Gas Corridor has been identified by the Council of Ministers, the European Commission, and the European Parliament as a “strategically important component within the EU’s energy policy”. “The SGC is economically justified on the basis of its contribution to security of supply and by enabling a new source of cost-competitive natural gas”, said the EIB in an official statement. “TAP is one of the largest single capital-investment projects currently being undertaken in Europe and the largest in Greece. It is expected to contribute to economic recovery in Greece and the other countries through which the pipeline is to be built”, the statement added.

TAP AG is a Switzerland-based company, headquartered in Baar, in the Canton of Zug, and has offices in Athens, Tirana, Rome, and Lecce. TAP’s shareholding is comprised of BP (20%), Azerbaijan energy group SOCAR (20%), Italy’s Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%). In early September 2017, the project leaders said that more than 50% of the pipeline construction was complete, nearly 16 months after construction had began.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

What we need for a better European Solidarity Corps

Main results of Environment Council of 09 October 2018

EU to scrutinise foreign direct investment more closely

Yemen war: UN-backed talks to silence the guns due to begin in Stockholm

Galileo and EGNOS programmes back in orbit powered with €70 billion

80 adolescents a day will still die of AIDS by 2030, despite slowdown in epidemic

EU-US Trade: European Commission endorses rebalancing duties on US products

Tanzania’s Dual Burden

In Mozambique, it’s ‘a matter of the heart’ says Guterres, lauding the cyclone-struck nation’s ‘undeniable moral authority’

Forty-two countries adopt new OECD Principles on Artificial Intelligence

Eliminating hepatitis calls for ‘bold political leadership, with investments to match,’ UN health chief says

Peacekeeping: A ‘great opportunity’ to develop professionally and personally

EU job-search aid worth €2 million for 500 former shipbuilding workers in Spain

The gender gap of medicine in 2018

Scientists are growing meat on blades of grass

These cities score an ‘A’ for environmental action – but hundreds more are falling behind

The world needs a circular economy. Help us make it happen

3 trends that will transform the energy industry

Somalia: UN congratulates Puntland region’s newly-elected President

Climate change is a security threat. We must act now

How powering food storage could end hunger

This Netherlands football stadium creates its own energy and stores it in electric car batteries

Tourism offers much to the EU gets a little

Peace in the Gulf ‘at a critical juncture’ says DiCarlo, urging continuation of Iran nuclear deal

Next six months crucial for the EU, says von der Leyen at the start of the German Presidency of the Council of the EU

Russia must urgently step up fight against foreign bribery

UN forum spotlights cities, where struggle for sustainability ‘will be won or lost’

Corruption thwarts attempts to build a better world and ‘must be fought by all, for all’

How to make primary healthcare a favourable career choice for medical students: Strategies and reflections

UN chief hails victory of ‘political will’ in historic Republic of North Macedonia accord

The Amazon is reaching a dangerous tipping-point. We need to scale solutions now if we have any chance of saving it

Developing countries should not be liable for emissions ‘accumulated throughout history’, key UN development forum hears

Green Deal: Coal and other carbon-intensive regions and the Commission launch the European Just Transition Platform

Coronavirus update: UN addresses school disruptions, suspends public access to New York Headquarters

First Western Sahara talks at UN in six years, begin in Geneva

With millions of girls ‘at risk’ today of genital mutilation, UN chief calls for zero tolerance

Historian Niall Ferguson on what the pandemic means for the global economy, geopolitics – and parties

Trade barriers are slowing plastic-pollution action. Here’s how to fix it

Italy’s dilemma after Merkel-Hollande agreed loose banking union

EU: All economic indicators in free fall

Immigration crisis at its very worst: EU to outsource rescue business to North Africa?

Paradise islands of Pacific increasingly vulnerable to climate change, as UN boosts resilience

CEOs say these 4 factors will shape business in 2020

How Google is fighting fire with real-time mapping data

This new initiative aims to make cybercrime harder – and riskier – to commit

As conflicts become more complex, ‘mediation is no longer an option; it is a necessity’, UN chief tells Security Council

Marco Polo’s Dream

BRICS’ New Development Bank turns four: what has it achieved?

The Great Reset and digital trust: 3 lessons on digital tools from the COVID-19 crisis

This is how many people are forcibly displaced worldwide

European Parliament gives green light to Christine Lagarde

Upgraded EU visa information database to increase security at external borders

Is the ECB enforcing the will of the big Eurozone member states on the small? Can the euro area live with that?

EU budget: Commission proposes to increase funding to support the environment and climate action

UN forum to explore use of outer space to improve lives, protect planet

Beyond self-regulation: dealing with Europe’s consumption problem

Factory workers are facing a mental health crisis. Here’s how to respond

The Greta effect? Why businesses are more committed to climate action in 2020

Parenting in the time of COVID-19? Consider these 6 tips from the WHO

To all far-right partisans who exploit Charlie Hebdo atrocity: a peaceful reply given by a peaceful student

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s