Sberbank and ChelPipe Group close the deal with participation of State Bank for Foreign Economic Affairs of Turkmenistan and Islamic Development Bank under the TAPI Project
- The deal amounts to USD 219 mln.
- Chelyabinsk Pipe Plant’s products will be used to construct a 214 km section of the TAPI pipeline.
2 April 2019, Moscow – Sberbank has confirmed a letter of credit issued by State Bank for Foreign Economic Affairs of Turkmenistan under the irrevocable commitment for reimbursement of Islamic Development Bank in amount of USD 219 mln in favour of Chelyabinsk Pipe Plant (ChelPipe, part of the ChelPipe Group) as a part of the project to construct a section of the TAPI (Turkmenistan–Afghanistan–Pakistan–India) gas pipeline.
To ensure that supplies are made, Sberbank efficiently structured a financial instrument that meets the requirements of both international and Islamic banking, which enabled Sberbank to act as the confirming bank for the export letter of credit.
ChelPipe won the tender announced by Turkmengas State Concern to select the supplier of pipes for the TAPI gas export pipeline.
First Deputy Chairman of the Executive Board of Sberbank Alexander Vedyakhin:
“By following one of the bank’s key strategic principles — ‘Everything for the Client’ — and with a view to developing Russian exports, Sberbank worked together with Islamic Development Bank to structure and implement our first letter of credit which is compliant with Islamic banking. This is the first deal of its kind, and we are certain that it will not be Sberbank’s last. The demand for Islamic finance is now growing, and Sberbank is actively involved in forming this market.”