The planned major oil pipeline from Azeri oilfields to the Turkish port of Ceyhan, once dismissed as too costly, got a further boost on Friday when the European Bank for Reconstruction and Development said that it would fund at least ten percent of the project.
"We want to finance the Baku-Ceyhan project and are ready to fund $300 million before the end of 2002," Thomas Moser, the head of the EBRD in the Azeri capital Baku, said.
A BP-led consortium plans to start building the $2.9 billion, 1,730 km (1,075 mile) oil pipeline in July and complete it by 2005.
The link will carry up to one million barrels per day (bpd) of crude oil, mainly from Azerbaijan's giant offshore fields operated by BP, to Turkey's southern coast.
Between 20 and 30 percent of the cost will be financed by the BP consortium in cash, the rest borrowed from international financial institutions.
The US-backed pipeline project was masterminded by Turkey in the early 1990s to bypass its already busy Bosphorus straits, the only outlet at present for Russian and Caspian oil transported via the Black Sea.
The BP-led group earlier this year decided to build the Baku-Ceyhan pipeline along the same channel as a gas pipeline to Turkey from a huge offshore gas field in Azerbaijan, also operated by BP.
Moser said that Western banks were ready to provide both pipeline projects with up to $2 billion but declined to name other potential lenders.
Turkish officials have said that the US Eximbank, Japan Eximbank and the International Finance Corporation (IFC) were among those interested in providing financing for the project.
The EBRD has lent $350 million to the Azeri economy and has invested another $265 million in Caspian Sea oil projects.