Development banks pump more money into Southern Gas Corridor, despite fresh concerns

24 July 2018

Questions have been raised about the future of the Trans-Adriatic Pipeline (TAP), after Italy’s new coalition government announced in June that it will review its support for the project. Italy’s new environment minister, Sergio Costa of the 5-Star movement, said in a written response to reporters, “given falling gas demand [in Italy], that project [TAP] today looks pointless.”

TAP is the final leg of the Southern Gas Corridor (SGC), a mega-project that has received funding from the World Bank and other multilateral development banks (MDBs) to bring Azeri gas to Europe via Turkey and other transit countries (see Observer Spring 2018, Autumn 2017).

According to recent reports, “The TAP consortium, which includes British oil group BP, Italy’s Snam and Spain’s Enagas, has said re-routing the pipeline away from Italy is not an option … [and] redirecting it inside Italy could delay the project by four to five years.”

Despite these concerns, the European Bank for Reconstruction and Development (EBRD) approved a €500 million loan for TAP on 4 July. This brings MDBs’ total funding for the SGC to over €6 billion, with the World Bank approving $500 million loans to Turkey and Azerbaijan, respectively, in 2016 (see Observer Autumn 2017).

Fidanka McGrath of the European civil society network Bankwatch commented, “The massive injection of public money in the Southern Gas Corridor, that TAP is part of, has not been enough to make right everything that is wrong with the pipeline: from fuelling corrupt and oppressive regimes, the project tramples on the rights of farmers and communities, and ends by locking in Europe to fossil fuels.”