The economist Gubad Ibadoglu criticized the Azerbaijani government's policy on foreign borrowings for the Southern Gas Corridor project (SGC).
In his opinion, it is better to accept the World Bank conditions by increasing transparency and accountability, and in return obtain loans on favorable terms, rather than take the money at high interest rates.
Ibadoghlu wrote on his Facebook page the government of Azerbaijan places shares of SGC under 6.9% per annum. This is a very expensive and unnecessary debt.
The government prefers to take expensive debts in order to not accept the conditions of IFI to increase transparency, the expert believes.
Azerbaijan is currently experiencing demand for loans in the amount of 5 billion USD in connection with the implementation of the Trans-Anatolian gas pipeline (TANAP) with a capacity of 16 billion cubic meters of gas per year, which is expected to be completed in 2018.
In the project costing 10 billion dollars SOCAR owns 58%, the Turkish company BOTAS owns 30% and another 12% are owned by BP.
The European Investment Bank has decided to allocate 1 billion Euros for this project. -06D-
Economics
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