Turkish Gas Storage Facility Continues to Expand Through a New World Bank Loan

The World Bank’s Board of Executive Directors today approved a US$600 million loan for the Gas Storage Expansion Project in Turkey. The project’s aim is to increase the reliability and security of gas supply in Turkey by expanding the underground gas storage facility near Tuz Gölü.  In November 2005, the Bank approved a US$325 million loan for a first gas storage project at Tuz Gölü, and in July 2014 it approved an additional financing of US$400 million for that initial project, which will provide storage for about one billion cubic meters of gas.  The Gas Storage Expansion project will support government efforts to quintuple the size of the storage facility at the same location.

The Gas Storage Expansion Project will be implemented by Turkey’s national gas company, BOTAŞ, and will consist of three components:
Component 1: Tuz Gölü Gas Storage Expansion Plant. This involves building an underground gas storage facility within a salt formation close to Tuz Gölü, a salt lake in central Turkey. Upon completion, the plant will raise the capacity of working natural gas storage at Tuz Gölü by about four billion cubic meters.

Component 2: Construction Supervision Monitoring.

Component 3: Environmental and Social Impact Assessment (ESIA) and the Resettlement Action Plans (RAP) Monitoring.


On the occasion of the loan approval Johannes Zutt, Country Director for Turkey stated: “The gas storage facility at Tuz Gölü is the first of its kind in Turkey and one of few such projects globally. The facility will play a key role in improving Turkey’s energy security and in enabling flexibility in meeting the growing demand for natural gas among households and businesses.”

Zutt continued: “In particular, the facility will help to ensure that enough natural gas is available to consumers at all times, especially when global supplies are tight or when demand escalates suddenly due to winter cold”.
The Project contributes to the Turkey Country Partnership Framework (CPF) for FY18-21 by supporting the aim to improve the reliability of energy supply. The project is expected to help Turkey lower its greenhouse gas emissions by reducing dependence on coal, especially in the winter months.  Increased flexibility in the natural gas supply will also support greater integration of renewables as they become a larger part of Turkey’s energy mix.

Financing the proposed Gas Storage Expansion Project is an integral component of the World Bank’s program of policy, technical and financial assistance in Turkey to support energy reform in general and gas sector reform specifically. With this project, the World Bank is also helping Turkey raise financing from other sources, including commercial finance through due diligence on BOTAŞ’s technical, procurement, and environment and social safeguards work on the project. The Asian Infrastructure Investment Bank (AIIB) is a co-financier of the project.

The lending instrument for the Gas Storage Expansion Project is an IBRD Flexible Loan with 22.5-years maturity, including a seven-year grace period.

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