BP and its partners intend that the US$ 3.3 billion cost of the Baku-Tbilisi-Ceyhan pipeline should be financed 30% by equity (capital provided by the oil companies which hold shares in the project), but primarily 70% from debt (loans from banks). A large proportion of this debt will be sought from public financial institutions (ie lenders of taxpayers’ money), led by the International Finance Corporation (IFC – the part of the World Bank which lends to companies rather than governments) and the European Bank of Reconstruction and Development (EBRD).

[What are these international financial institutions?]

In November 1998, BP boss John Browne stated that the BTC / AGT project would not be possible unless such "'free public money' was offered by government to build the line."

In October 2001, BP and its partner oil companies sent a preliminary informative memorandum on the project's financing requirements to the IFC, the EBRD and leading export credit agencies. Both IFC and EBRD have informally indicated a willingness to provide financing. Export credit agencies that have been discussed in relation to the project include US-EXIM and OPIC, the UK's ECGD, Italy's SACE and Japan's JBIC.

No formal application has been made as yet – BP is aiming to submit this in December 2002, if all goes to plan. There would then be a 120-day ‘disclosure period’, during which time anyone is welcome to make comments and raise concerns to the institutions. The institutions’ boards would make a decision after the end of that disclosure period.

If you would like to be notified of when this disclosure period begins, and how to make comments to the financial institutions, please join our mailing list.

Since no formal application has been made, it is not officially declared what amount of money will be applied for. However, it is informally believed that IFC and EBRD would each be asked for US$ 300 million. MIGA (the World Bank's Multilateral Investment Guarantee Agency) is reportedly being asked for $200 million in political risk insurance to cover the commercial banks lending to BP (these have not been named yet - BP would use the insurance to solicit commercial bank loans). US export credit agency OPIC has been approached for $300 million in political risk insurance. Further guarantees are sought from other export credit agencies.

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