The Trans-Anatolian Natural Gas Pipeline ("TANAP" or the "Project") is a natural gas pipeline crossing the territory of the Republic of Turkey to supply natural gas to the Republic of Turkey as well as European countries. The pipeline, which is currently under construction, will stretch from the Turkey/Georgia border to the Turkey/Greece border. The Project is implemented by TANAP Dogalgaz Iletim A.S. ("TANAP A.S.").
Along with the EBRD, a number of other international financial institutions will support the project.
The World Bank has committed USD 800 million financing for TANAP and the Asian Infrastructure Investment Bank has committed USD 600 million. The European Investment Bank is also considering financing for the TANAP project.
Stretching across five countries of operations of the EBRD, the Southern Gas Corridor - of which the TANAP Project is an integral part - is an important strategic gas infrastructure project aimed at improving the security and diversity of the energy supply to Europe and Turkey. It will expand gas supply options and provide new energy transportation routes enabling Europe to access gas from the Caspian region and, in the longer term, beyond it, including the Eastern Mediterranean, Central Asia and the Middle East. In Turkey, which imports most of its gas, the Southern Gas Corridor will provide an additional source of natural gas and improve the country's infrastructure with better distribution of gas supplies, improved access to energy and inclusive regional growth.
As a cross-regional infrastructure project, the Southern Gas Corridor will foster opportunities for international cooperation, economic integration and sustainable economic development in the region.
Projects of such scale also create significant opportunities for local employment and businesses with the TANAP Project resulting in more than 9,000 jobs during construction and a further 300 new permanent jobs during operations in Turkey. Local benefits will include improvements in Turkey's regional road and social infrastructure as well as environmental mitigation programmes ensuring Project implementation in line with the requirements of the Bank and other international financial institutions.
As countries undertake the long-term transition to a low carbon economy, gas will continue to play a significant role as a complementary fuel. As a relatively low-carbon fossil fuel providing a flexible power generation source, gas can be used to complement renewable energy sources as a reliable back-up to expanding intermittent renewable energy. Most new thermal facilities are expected to be fuelled by gas because of lower capital costs, greater flexibility to act as back-up to intermittent renewables and lower carbon footprint. As renewable energy is expanding and as greenhouse gas emission reduction goals are becoming more stringent, gas, as a lower carbon fuel, will have an increasingly prominent role in power generation in the move to a low carbon economy.
The transition impact of the Project is expected to come mainly from its contribution to the integration and resilience of the energy markets along the pipeline route but it is also expected to have a significant impact in supporting the transition towards low carbon economies.
The Project will support the diversification of gas supply sources in Europe and Turkey supporting resilience of the energy sector against unforeseen circumstances. The enhancement of energy security and diversification of energy supplies are important elements of well-functioning economies.
Additionally, through the Project, the Bank will engage in policy dialogue to support the strengthening of energy market institutions, as well as skills and capacity building for key actors in the sector. The proposed Southern Gas Corridor will not only connect Azerbaijan with the European gas market but also enhance the interconnection of the regional gas network. As such, the Project will assist in the creation of an integrated, well-functioning European gas market and contribute to cross-regional trade and connectivity. With the potential to increase transportation capacity, the Project could also connect the broader Caspian region to Turkey and Europe and strengthen gas market integration in south-eastern Europe.
Natural gas is recognised to be an important fuel for the transition towards low carbon economies around the world. It still provides the lowest-carbon intensive generation of electricity to cover the share of energy demand not fulfilled by renewable energy sources and also fuels the flexible peaking capacity that is required to balance the intermittency of renewables. As a combined result of demand-side fuel switch (especially coal-to-gas) and supply-chain emission savings (in comparison with the supply of the other fuels being replaced by the Southern Gas Corridor gas), the Southern Gas Corridor is expected to have a substantial positive impact in contributing to the overall evolution of the impacted countries towards lower carbon intensity levels. To evaluate this impact, the Bank is undertaking a detailed assessment of the potential Project emission reduction benefits taking into account energy demand evolution in Turkey as well as national commitments to international climate change targets, including under the Paris Agreement. The scope of the assessment is to understand how the Project could support decarbonisation of the energy system. Initial estimates from this assessment suggest significant cumulative Green House Gas emissions savings in all EBRD and non-EBRD countries of relevance.
The Southern Gas Corridor Closed Joint Stock Company (the "Borrower") is owned 51% by the Republic of Azerbaijan and 49% by the State Oil Company of Azerbaijan Republic (in turn 100% owned by the Republic of Azerbaijan). The Borrower, a 58% shareholder in TANAP A.S., manages the Republic of Azerbaijan's interest in the Trans-Anatolian Natural Gas Pipeline project.
EBRD Finance Summary
Up to USD 500 million loan to Southern Gas Corridor Closed Joint Stock Company (the "Borrower") guaranteed by the Republic of Azerbaijan. The loan will be used to finance a portion of the Borrower's commitments to the Trans-Anatolian Natural Gas Pipeline.
Total Project Cost
Total TANAP project costs: USD 8.6 billion.
Southern Gas Corridor Closed Joint Stock Company share: USD 5 billion
Environmental and Social Summary
The Project involves a construction of a 1,850 km main high pressure gas pipeline in Turkey and has been categorised A in accordance with the Environmental and Social Policy 2014. The Bank's Environmental and Social Due Diligence ("ESDD") was supplemented by an international environmental, health, safety and social consultant and included a review of the Project's Environmental and Social Impact Assessment ("ESIA"), Resettlement Action Plans ("RAP"s), Biodiversity Action plan ("BAP"), Environmental and Social Management Plans ("ESMP"s), Stakeholder Engagement Plan ("SEP"), and other documents and a site visit to two construction Lots in Erzurum and Ankara areas. The ESDD also covered a high level review of other related projects/associated facilities such as Shah Deniz II; South Caucasus Pipeline Extension ("SCPX") and Trans-Adriatic Pipeline ("TAP").
The Project carried out a comprehensive ESIA, which assesses adverse impacts and identified avoidance and mitigation measures (as required by EBRD's Environmental and Social Policy) from the design and engineering activities to construction and through operation and decommissioning of the pipeline. The ESIA contains an assessment of cumulative and residual impacts of the Project.
The ESIA was publicly disclosed on the TANAP website (22 June 2015) as part of the company's ongoing consultation process. Turkey's Ministry of Environment and Urbanisation approved the ESIA in June 2014. The Bank's ESDD did not identify any Material Non-Compliances with environmental and social Performance Requirements ("PR"s), though a number of Partial Compliances were identified, which can be readily addressed through the development and implementation of the Environmental and Social Action Plan, which has been agreed with the Client and is disclosed on the Bank's website. The Project has robust environmental and social management systems and procedures in place, which are subject to regular review. The ESDD identified that environmental and social aspects and impacts have been considered during Project scoping and planning, with due consideration of avoidance through the application of the mitigation hierarchy and Good International Practice ("GIP").
Assessment of alternatives and route selection were a key focus for ensuring that environmental and social impacts were avoided and minimised while providing for technical feasibility of the Project. E&S criteria were duly applied to narrow the Preferred Route Corridor from 2km to 500m. The ESIA covered the full 500-metre pipeline corridor.
The selected routing allowed avoiding physical displacement of households along the entire corridor route. Further route selection changes were implemented throughout the construction phase and managed through a Management of Change process, to avoid significant cultural heritage sites and designated wildlife areas. The ESIA assessed potential E&S impacts of the project and, the related environmental and social mitigation measures and commitments were translated into a number of management plans to address any outstanding residual risks. Internal and third party monitoring is undertaken on the implementation of ESIA and Environmental and Social Management Plan commitments. The ESDD identified that potential risks related to vessel to vessel interactions and vessel interactions with marine fauna were assessed post-ESIA development through a comprehensive Hazard Identification Study ("HAZID"). Further Task Risk Assessments will be developed by the Contractor to identify and mitigate potential Project-related risks for offshore activities and relevant ESMSP will be developed and disclosed by the Project.
The Project currently employs 9445 people for the construction for the pipeline and compressor stations (2066 unskilled; 1907 semi-skilled and 5472 skilled employees) and the use of local employment is maximised especially for unskilled and semi-skilled workers and robust training is provided to ensure a transfer of skills. No material non-compliances were identified as part of the review against labour and working conditions criteria. Partial non-compliances include overtime work and fatigue management issues at the contractors' level. Extension of short-term construction labour force contracts also requires more clarity and TANAP will develop clear procedures for termination of employment.
The Project demonstrates full compliance with PR 3. The design of the Compressor Stations took into account relevant Best Available Technique provisions in order to reduce emissions at source. Impacts of water intake for camps and hydro-testing are adequately assessed; and the water is withdrawn on the basis of the permits by General Directorate for State Hydraulic Works. Sanitary wastewater from the camps and construction site is treated at an on-site wastewater treatment plant and discharged to an approved location after it meets applicable Project Standards. Water intake for hydro testing is metered and reused hydro-testing water is pumped from one section to another. Hydro-testing water goes through sedimentation and filtration and laboratory tests before the final discharge to compliance with Project Standards. The ESIA assesses waste streams generated by the Project; and management and mitigation measures are documented in a Waste Management and Pollution Prevention Plan developed by TANAP and the contractors. Chain of custody records are held by TANAP confirming waste has been disposed of at an appropriate facility. TANAP implements a detailed Health and Safety Management System informed by risk assessments. Relevant requirements are communicated to contractors and included in the contracts.
High risk activities are controlled through a Permit to Work process, implemented by contractors under supervision from TANAP personnel. TANAP monitors workplace H&S incidents and near misses.
Permanent land acquisition is required for approximately 260 ha for the Above Ground Installations, while approximately 6,600 ha is required for a temporary period of 3 years (easement land for the construction corridor, or unrestricted access for the Right of Way ("ROW")). This land is to be returned to owners after construction and reinstatement, with some restrictions on agriculture/ buildings in easement areas. Some gaps were observed between national land acquisition process, carried out by BOTAS, and Project standards. TANAP has committed to development of Corrective Actions in the Pipeline RAP, including a new entitlement matrix and a RAP fund, which intends to fill the gap between the national legislation and international standards with regard to compensation payments. The study to investigate potential impacts to fishermen in the Sea of Marmara is now being finalised and relevant Livelihood Restoration Plan will be developed and implement by the Project.
Biodiversity studies identified the pipeline will cross 67 terrestrial and 27 freshwater critical habitats. The terrestrial critical habitats cover only 0.39% of the 500 m Local Study Area corridor assessed in the ESIA and 5.6% of the ROW (36m). Protection status and endemism for species have been determined against BERN, IUCN, CITES, Bird Directive, Habitat Directive criteria. To mitigate impacts to species and habitats of conservation importance within the ROW, the Biodiversity Action Plan was developed.
The ESDD identified a gap with the requirements of PR6 in terms of ensuring No Net Loss of Priority Biodiversity Features and Net Gain of critical habitats (where residual impacts exist). Such gaps will be rectified through the development of a Biodiversity Offset Strategy to supplement the BAP. This work is currently underway and will be developed prior to the board approval of the Project.
The Project is fully compliant with PR8. Ongoing and close engagement has been undertaken with the Museum Directorate of the Ministry of Culture and Tourism. A Cultural Heritage Management Plan, including a Chance Find Procedure is in place, and its requirements are reflected in construction contractor MPs. Ground clearance works are supervised by the archaeologists, in liaison with the TANAP Cultural Heritage Officer and relevant authorities.
Stakeholder engagement activities during ESIA development and national disclosure included village-level meetings, gender-sensitive meetings/focus groups and stakeholder analysis commensurate with the nature and the scale of the Project. The Stakeholder Engagement Plan, aligned with international standards was first prepared in August 2013 and revised to reflect public participation and disclosure requirements. The SEP is aligned with an internal online Stakeholder Information System for tracking ongoing engagement, grievances and issues of stakeholder interest.
In line with the SEP commitments the Project has committed to disclosing summary of grievances and correction measures to affected communities, along with providing timely information to relevant stakeholders on updated project documents, including RAP and BAP updates.
The following actions have been agreed as part of the ESAP: hiring independent environmental and social monitoring consultants for both the construction and operation phases of the Project; development and disclosure of an environmental and social management plan for offshore construction, including offshore emergency response plan; provision of cost estimates for biorestoration and monitoring activities and newly identified remedial and offset activities for the operational phase; strengthening contractors overtime and fatigue management through relevant plans and procedures and better engagement and training; developing clear employment termination documentation for contractors; providing annual GHG reporting; developing and implementing a programme on prevention and management of communicable diseases in Project areas; providing to the Bank a final RAP Fund management procedure and a plan of engagement with affected land-owners and land users; provide Livelihood Restoration Programme for people affected by permanent land acquisition for the Above-Ground Installations and for Fishermen affected by the Offshore section construction; providing RAP Fund monitoring reports; developing Biodiversity Offsets Strategy quantifying residual impacts on critical habitats and net loss/net gain actions; disclosing summary of grievances and measures undertaken by TANAP and contractors to address such grievances to the community, including resettlement-related grievances, and providing evidence of the modality of local disclosure of key documents such as RAP, BAP and environmental and social management plans.
There is an Environmental and Social Impact Assessment available for this project.
The Bank is undertaking a detailed assessment to understand how the Project (and more broadly the Southern Gas Corridor) could support the transition of Turkey towards a low carbon economy taking into account the energy demand evolution in the power, industrial, commercial and residential sectors in the country as well as existing and planned national commitments to international climate change targets, including under the Paris Agreement.
The activity was conducted under the Green Economy Transition Project Preparation and Implementation Framework funded by the European Union under the programme "Enhancement of the Turkish Energy Sector in line with EU Energy Strategies".
Company Contact Information
+994 12 521 3091
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Public Information Policy (PIP)
The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP