World Bank to approve West African gas pipeline in November

Oct 21, 2004 02:00 AM

The Minister of Energy, Dr Paa Kwasi Nduom, has confirmed that the proposed $ 500 mm West African gas pipeline would go before the World Bank's board of governors for approval in November. He said he was aware that the World Bank was heading into the final stretch of a lengthy approval process for the long-delayed gas pipeline which would serve four West African countries.
The spokesman of the World Bank, Mr Timothy Carrington, has already hinted that the bank was expected to agree to $ 125 mm in loan guarantees, a mover said to be crucial for lining up the rest of the financing necessary for the transnational gas pipeline.

The government of Ghana however needs to raise about $ 50 mm for its stake in the pipeline. The Nigerian government has agreed to lend Ghana $ 40 mm.
"We know the government of Ghana is making an effort to get its equity on the table and it says there will be no problem," the spokesperson of the West African Pipeline Project, Mr Kofi Okai, emphasized.
Other partners of the project include Shell, the state-owned Nigerian National Petroleum Corporation (NNPC) and the Volta River Authority (VRA). Benin and Togo also have minor stakes in the project.

The project counsel, Martin Byrnes, has assured that assuming the World Bank approved the proposal in November, construction could be finished by the fourth quarter of 2006. That would be at least, half a year later than project participants had anticipated in March and nearly seven years later than envisioned at the start. He said, "It's close, but not quite there yet."
The project has reached this stage after persistent criticism from non-governmental organizations of its involvement in the Chad-Cameroon oil pipeline and a review that suggested abandoning oil projects. The bank has decided to shift its resources towards cleaner fuels with more obvious benefits for local communities.

Project backers say the pipeline is environmentally sound because it would use gas released from Nigeria's oil fields instead of flaring it off. Oil companies have been flaring gas because there isn't enough local demand to justify the massive spending needed to build gas plants and pipelines.
The gas would also provide cleaner fuel for regional power plants. Critics say the gas would come from new fields that would be cheaper to develop and that the pipeline would adversely affect local communities.

Source: Ghanaian Chronicle
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