Fueled by its hydrocarbon exports—Turkmenistan is the 12^th largest natural gas producer in the world, with the 4^th largest natural gas reserves, and the 10^th highest oil producer in the Asia and Pacific region—the country’s economy has grown rapidly. However, highly concentrated export basket and export markets have made the economy vulnerable to changes in commodity prices. Turkmenistan’s national development strategy aims to shift to a growth model based on economic diversification, innovation, and sustainable development, with greater regional cooperation.

“Turkmenistan has made important progress in recent years and achieved upper middle-income status,” said Sean O’Sullivan, Director General of ADB’s Central and West Asia Department. “ADB will work with the government and people of Turkmenistan to build on this progress by enabling the country to diversify its energy markets, improve its regional transport connectivity, and diversify its non-hydrocarbon economy.”

The CPS provides three main avenues of support: hydrocarbon market diversification and energy trade promotion; diversification of the non-hydrocarbon sectors through transport infrastructure investments to improve market connectivity, and supporting private sector development, including small and medium-sized enterprises; and knowledge work on economic diversification and reforms.

Regional power interconnection projects such as Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan (TUTAP), Turkmenistan-Afghanistan-Pakistan (TAP), and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project will be the primary vehicles of ADB support to diversify Turkmenistan’s power and natural gas export markets to South Asia. ADB has been instrumental for TAPI’s progress to date, serving as the TAPI secretariat since 2003 and, more recently, acted as transaction advisor. Going forward, ADB will continue to support the project, including the possibility of providing financial advice, financing shareholder equity in TAPI pipeline company, and non-sovereign loans, and credit enhancement.

ADB will support transport infrastructure investments to improve market access and regional connectivity. Modernizing institutions to increase the role of the private sector in the non-hydrocarbon economy, starting with small and medium-sized financing, will be a key area of engagement. To meet the needs of policymakers, ADB will also support knowledge work on economic diversification and economic reforms. Regional cooperation and integration, particularly within the Central Asia Regional Economic Cooperation (CAREC), which Turkmenistan joined in 2010, is a priority area of the CPS.

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April 13, 2016: The shareholders of the TAPI Pipeline Company Limited (TPCL) signed an Investment Agreement in a ceremony witnessed by petroleum ministers and senior government officials of Turkmenistan, Afghanistan, Pakistan and India, and senior Asian Development Bank (ADB) officials. It will pave the way for long-term natural gas supplies that will give a major boost to the signatory countries’ economies and energy security.

The Investment Agreement provides an initial budget of over $200 million to fund the next phase of the development of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. This includes funding for detailed engineering and route surveys, environmental and social safeguard studies, and procurement and financing activities, to enable a final investment decision, after which construction can begin. Construction is estimated to take up to three years.

“The financial support committed by the shareholders of TAPI under this investment agreement is a true testament of their intention to get this historic project off the ground and running,” said Yagshygeldi Kakayev, Deputy Chairman of the Cabinet of Ministers of Turkmenistan. “Turkmenistan’s vision is strongly aligned with that of its TAPI neighbours to make this project a reality and to deliver a truly regional project that will address energy demands and support economic prosperity and security in the region.”

TPCL will build, own, and operate the TAPI pipeline, which, once completed is expected to transport up to 33 billion cubic meters of natural gas annually from Turkmenistan to Afghanistan, Pakistan and India over 30 years. The pipeline stretches about 1,600 kilometers from the Afghan/Turkmen border to the Pakistan/Indian border.

“TAPI exemplifies ADB’s key role in promoting regional cooperation and integration over the past 20 years,” said Sean O’Sullivan, ADB’s Director General for the Central and West Asia Department.  “TAPI will unlock economic opportunities, transform infrastructure, diversify the energy market for Turkmenistan, and enhance energy security for the region.”

Acting as TAPI secretariat since 2003 and as transaction advisor since 2013, ADB has been instrumental in the progress of the TAPI pipeline to date. In the latter role, ADB helped establish TPCL, select Turkmengaz as consortium leader, and finalize the Shareholders and Investment Agreements.

ADB, headquartered in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.

– See more at: http://www.internationalfinancemagazine.com/article/Investment-agreement-signed-for-TAPI-pipeline.html#sthash.9Ou4dALa.dpuf

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