Although IFC funding will account for only about 10% of the money for the project, it is seen as vital by the consortium responsible for the construction of the pipeline. The consortium, which includes BP, Total and Statoil, has come under increasing pressure from environmental and human rights groups. Backing from the IFC is seen to add credibility to the project because the World Bank is committed to the highest environmental and social standards.

The IFC now views the pipeline as one of its milestone projects, breaking “new ground in transparency, environmental and social safeguards, community consultation and involvement, national and international civil society engagement, and local economic benefit”. Rashad Kaldany, director of the World Bank Group’s oil, gas, mining and chemicals department, says that figures of Azerbaijan’s oil revenues will be made public for the first time due to the project.

Environmental groups, including Friends of the Earth (FOE), the Corner House, the Kurdish Human Rights Project and Platform, have blasted the IFC for making a politically motivated decision driven by the need to secure oil supplies and geopolitics. “BP does not need this money,” says Greg Muttitt of Platform. “It needs the political muscle that comes with a World Bank loan in order to enforce its will”. FOE says that the three host countries have ignored the pipeline’s impact on the environment. The groups claim that the pipeline is not economically viable, an opinion that BP echoed at the beginning of the project, questioning whether the amount of oil was sufficient to make the it pay. BP decided to go ahead when it revised the volume needed to make it viable.

Most recently, BP’s consultant found that the project had broken World Bank resettlement guidelines and therefore local law. The Bank is prohibited from funding projects that violate local law. This admission came shortly after environmental groups filed a review of the project, alleging that it violates World Bank standards on at least 173 counts.

The IFC emphasises that it has worked closely with local non-governmental organisations to ensure that the communities will get the “best possible deal” and gain full economic benefits. The project is expected to generate $29bn in oil revenue in the next 20 years. Pipeline transit revenues to Georgia are expected to be worth approximately $500m and Turkey is expected to earn $2.5bn from the pipeline. The IFC estimates that some 10,000 jobs will be created during construction and is putting a programme together to help local companies and entrepreneurs to benefit from related economic activities, as well developing micro-crediting schemes and consultancy capacity in biodiversity, energy efficiency and corporate governance.