ADB considers PCG for CJSC

The Asian Development Bank is considering a US$1.5bn financing for Azerbaijan’s 16.67% stake in the Southern Gas Corridor gas pipeline scheme to Europe from the Shah Deniz fields.


The ADB is considering a partial credit guarantee (PCG) to support commercial bank financing to fund the stake. If commercial bank financing is not available, the ADB will consider a direct loan.


In March, the government raised a US$1bn bond issue for the scheme. It had been hoping to raise US$2bn but market conditions saw the issue size cut back. The funding vehicle, Southern Gas Corridor CJSC, rated Ba1/BB+/BB+, priced the state-guaranteed US$1bn 10-year bond issue at 7% or 526bp over mid-swaps (PFI issue 573).


An ADB mission will visit Azerbaijan in mid-June to talk about the financing and its board of directors will consider the deal on August 22. The ADB is considering a separate US$450m direct loan on the expansion of the Shah Deniz field itself.




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