World Bank's Honda: We will support Southern Gas Corridor project till the end - INTERVIEW

Baku. 20 December. REPORT.AZ/ Executive Vice President and CEO of the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, Miss Keiko Honda paid one-day visit to Azerbaijan. During the visit organized at the invitation of Azerbaijani government, Keiko Honda met with the head of the state, finance minister, a number of state and government officials. At the end of her visit, Honda gave an exclusive interview to Report News Agency as below:

- First of all we would like to know the purpose of the visit.

- Azerbaijan is very important partner for WB Group and MIGA. One of the projects supported by World Bank and MIGA is TANAP. About one year ago the Board of Executive Directors of the banks approved both the projects of World Bank and MIGA. The loan allocated by the World Bank is currently being used. But the negotiations with commercial banks regarding the warrant of MIGA are underway. One more time I would like to confirm that MIGA has a great liability before this project. At the same time, we have also discussed with Azerbaijani government other spheres where we may support.

- Regarding the warrant of MIGA, with which particular financial institutions the negotiations are underway?

- I want to say that we support the negotiation of the government with commercial banks. That is why now we are not ready to disclose the names of these banks. At the same time, we continue talks with the Ministry of Finance and our main partner Southern Gas Corridor CJSC.

- Some time ago Paris has hosted a summit on the climate change and President of the World Bank Jim Yong Kim in his speech said that the World Bank will stop investing in oil and gas sector. In this case what will happen to this kind of projects?

- The message in our statement in Paris was that World Bank will not support the upstream projects after 2019. But the transportation of gas through pipelines is midstream and support for this project will continue.

- Does WB plan to support alternative energy projects in Azerbaijan or is it in the future plans of MIGA?

- During the discussions with government representatives we were informed about activity opportunities in the renewable energy area. Of course, if such opportunity appears, as a MIGA we would be pleased to work in this area.

- Among the renewable energy areas in Azerbaijan which one seems more real to invest in?

- In other countries we mainly support solar and wind power areas. Of course, there are other directions such as water and geothermal energies. But in Azerbaijani realities the two areas I have mentioned are more topical.

- MIGA gives warrant for loans allocated in oil and gas area. Although in next 50 years there is no threat for risky decrease of gas prices, such threat exists for oil. Does that create any risk for MIGA?

- Actually, the funds allocated by WB is sovereign loans. At the same time, the warrant we make covers the sovereign risks. This year Azerbaijani economy is already stable and we expect that in the future it will be more stable. During preparation of this project WB and MIGA conducted thorough assessment of this project, All the calculations show that Azerbaijani people will benefit from that project.

- Based on which indicators do you think that Azerbaijan's economy is in good shape?

- The economic growth temp is considerably improving. Economists of the World Bank believe that the prospect for Azerbaijani economy in the following years will be good. 

Notably, Board of Executive Directors of the MIGA approved the warrant up to $ 1.2 billion for the Trans-Anatolian Natural Gas Pipeline (TANAP) project on December, 2016.