The World Bank Group's International Finance Corp. has approved up to $250 million in loans to help build a controversial $3.6-billion oil pipeline from the Caspian Sea to Turkey. The IFC's board on Nov. 4 voted to approve two, $125-million loans for the 1,760-km-long project, which runs from a site in the Caspian Sea near Baku, Azerbaijan, through Georgia, to a terminal at Ceyhan on the Mediterranean coast of Turkey.
IFC also approved up to $60 million in loans for developing an oilfield off the coast of Azerbaijan in the Caspian Sea.
Environmental groups lambasted the action. "IFC buried its head in the sand on this one," said Carol Welch, Friends of the Earth's director of international programs. The group says the pipeline crosses the buffer zone of a national park in Georgia and poses a threat to the mineral water industry and to tourism. The World Wildlife Fund wanted the IFC to reject the loan to avert what WWF termed "a potential ecological and social disaster."
But Rashad Kaldany, director of the World Bank Group's oil, gas, mining and chemicals department, said the project was sound. He said, "Routing options were carefully assessed by IFC staff and independent environmental and technical experts, who confirmed that the route chosen was the only viable one with the significant mitigation and protection measures proposed in this area."
Kaldany also says the pipeline and oil field projects will have four internal and five external levels of monitoring and says the IFC believes that constitutes "unprecedented" transparency.
BP has the largest share of the pipeline venture, with 25%. Other participants are Azerbaijan's state oil company, SOCAR; TPAO of Turkey; Statoil of Norway; Unocal, Itochu of Japan; Amerada Hess; Italy's Eni; TotalFinaElf of France; INPEX of Japan; and ConocoPhillips.