The World Bank may withdraw from a high-profile oil pipeline investment in Chad and halt lending to the government if it changes a law to access a larger share of oil profits, officials said on Thursday, reports the World Bank press review Friday.
The officials, which called it “the nuclear option,” said such drastic steps are possible if Chad changes the World Bank-backed oil revenue management law.
The move would be a major setback for the Banks biggest investment in Africa, and one it considered a test case for its strategy for oil investments as a way to benefit poverty-stricken nations.
In exchange for funding the 3,7 billion US dollar pipeline, the World Bank told Chad to pass a law ensuring that 10 percent from oil proceeds go into an overseas bank accounts and be spent only on poverty programs.
The government is expected to earn about 2 billion dollar (12,4 milliarder DKR) over 25 years from the heavy oil projects developed by an Exxon Mobil-led consortium.
– I do not think the World Bank should compromise on the changing of the revenue management law, said Ian Gary, policy advisor on the extractives industry for development group Oxfam adding: – They should not be negotiating in this situation over a law that was a condition of the loan.
The Bank could also insist that Chad pay back its World Bank loans more quickly.
Officials said the Bank was considering finding a bilateral donor to give Chad extra funding if it did not change the law. Chads government has said its budget is being squeezed by the increased security costs related to thousands of refugees fleeing the Darfur conflict in neighboring Sudan.
President Idriss Deby is also facing internal threats from army deserters calling for his resignation and growing political tensions ahead of elections next year.
Kilde: www.worldbank.org
Læs også telegrammet “Rovdyrene vil have fingre i Tchads olieindtægter – nej siger Verdensbanken: De skal gå til udvikling for de fattige”, i rubrikken international bistand, dato 25.10.05.
