A major European development bank has approved a loan for construction of the Trans-Adriatic Pipeline (TAP) on July 4, in a boost for the developers of the 4.5 billion euro gas project.
The European Bank for Reconstruction and Development (EBRD) said its board of directors has approved a direct loan of up to 500 million euros ($583 million) for TAP.
The 878 kilometer pipeline will start at the Greek/Turkish border, cross Albania and, after passing under the Adriatic Sea, will end in southern Italy. It constitutes the final leg of the Southern Gas Corridor and will transport gas from the Caspian region to Europe.
With an initial annual capacity of 10 billion cubic meters – equivalent to the energy consumption of approximately seven million households in Europe – the pipeline will make a significant contribution to the diversification of Europe’s energy supply.
It will also help make energy supply for consumers more reliable, as well as achieve significant CO2 reductions by providing a cleaner fuel, as compared to coal.
The first delivery of gas is expected by 2020.
The total project cost is 4.5 billion euros.
The European Investment Bank’s Board earlier this year approved TAP’s eligibility for a 1.5 billion euro loan, and further contributions from the export credit agencies of France, Germany and Italy are currently under consideration.
At the end point in Italy, TAP will connect to the Italian natural gas network and from there with wider European networks.
The EBRD said that it would continue to monitor the project during construction and operations to ensure the continued compliance with these commitments.
The Southern Gas Corridor value chain has a total estimated cost of $40 billion and includes gas infrastructure investments into a 3,500-kilometer network of pipelines crossing six countries.
The inauguration of TANAP took place in June in Turkey.