World Bank approves N14.7b for regional gas project

No Comments » August 21st, 2008 posted by // Categories: Energy Development Project



 

GUARDIAN

 

Wednesday, August 20, 2008

World Bank approves N14.7b for regional gas project
By Yetunde Ebosele

THE World Bank has approved the sum of N14.750 billion about ($125 million) to support the execution of the West African Gas Pipeline (WAGP) project aimed at transporting natural gas from Nigeria to other neighbouring African countries.

Of the sum, the Bank is providing about $50 million partial risk guarantees on concessional terms from the International Development Association (IDA) and an additional $75 million guarantee from the Multilateral Investment Guarantee Agency (MIGA) for political risks.

It was gathered that WAGP, a regional integration project, involving the construction of a 428-mile long (678 kilometres) pipeline which would transport natural gas from Nigeria to Benin, Togo and Ghana, is being sponsored mainly by Chevron Oil Company while the World Bank basically serves as a guarantor.

Following the endorsed action plan, the Bank will only undertake risk guarantees, but will not support a conventional lending operation.

In a statement, the bank said the action plan was approved by its Board of Executive Directors at a meeting in Washington to discuss the independent Inspection Panel investigation of the West African Gas Pipeline (WAGP) project.

The Inspection Panel’s investigation was initiated following requests by 12 Nigerian communities on the basis that the WAGP project will adversely affect their safety, environment and livelihoods due to acquisition of land and other related assets.

The communities had also contended that the Bank failed to comply with its policies and procedures on environmental assessment, project supervision, and involuntary resettlement, posing irreparable harm to their livelihoods, which the panel concurred to.

Affirming the communities’ plights, Werner Kiene, Chairperson of the Inspection Panel, recognised the complexities of land tenure in West Africa but agreed that “crucial steps were not taken to ensure livelihood restoration for the affected people.”

In a related development, the bank has last week indicated its readiness to address the negative impacts of the project.

The indication follows a request by some communities in Nigeria, which claim that the WAGP project was adversely impacting on their safety, environment and means of livelihood.

An inspection panel set up by the bank in its report, submitted to the global bank’s board had contended that the bank failed to comply with its policies and procedures on environmental assessment, project supervision, and involuntary resettlement, posing irreparable harm to the communities’ livelihoods.

The President of the World Bank Group, Mr. Robert Zoellick, welcomed the inspection panel’s report and described the Management Action Plan as an important contribution to reducing power shortages, increasing trade competitiveness and regional co-operation, while protecting the interests of local communities.

Commenting on the report, World Bank Vice President for the Africa Region, Mrs. Oby Ezekwesili, said: “Catalysing private sector investment for infrastructure development is vital for sub-Saharan Africa’s future.

“The bank appreciates the inspection panel’s work, and is committed to implementing the Action Plan so that the project – one of the earliest regional projects in the portfolio – delivers lasting development results to people and the environment,” she said.

Ezekwesili added that the role of country directors is critical in such regional projects. The bank expressed belief that the modest five per cent reduction in gas flaring would only be possible when the pipeline is commissioned.

Kiene recognised the complexities of land tenure in West Africa but stated that “crucial steps were not taken to ensure livelihood restoration for the affected people. The important difference between simple monetary compensation and a sustainable livelihood approach needs to be addressed in implementing the Action Plan.”

He also stressed “the plight of the requesters suffering from the menace of gas flaring”, and noted the importance of developing a new initiative for a “village-based monitoring system of gas flaring reduction.”

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