Turkey’s state gas company has received a €925 million ($929 million) loan from Deutsche Bank to finance purchases of liquefied natural gas (LNG) in a bid to reduce the country’s dependence on Russian energy imports, such as Bloomberg reported.
The three-year loan will allow Boru Hatlari ile Petrol Tasima AS, or Botas, to buy LNG from suppliers in 10 countries, including the US, Algeria and Qatar, according to a Deutsche Bank statement. Funding is guaranteed by the government of Turkey and may increase in the future.
The deal marks the state-owned pipeline operator’s first international loan for LNG imports. And while it will finance only a small portion of Turkey’s natural gas consumption, it paves the way for similar deals that will allow Botas to diversify supplies currently dominated by Russia and Iran.
The loan facility comes at a critical time for Botas. The Turkish company has been hit by soaring gas prices that it has struggled to pass on to consumers, with authorities desperate to contain inflation that is at a 24-year high ahead of a crucial election year. Botas has reported selling gas to domestic consumers at 30% of cost.
The Turkish government pumped more cash into Botas in the first quarter than in all of 2021 to keep it afloat. The company was also the biggest recipient of the central bank’s $18 billion in foreign exchange sales for state-owned companies in the first half of this year, adding to pressure on Turkey’s foreign exchange reserves.
Botas will use the loan to also buy LNG from suppliers in Germany, France, Italy, Spain, Switzerland, Singapore and the United Kingdom, it said.
The loan negotiations were first reported by Bloomberg in April, which also said the size could double in the future.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
