Chad loses pipeline financing

from the Times

The World Bank said it has withdrawn financing of a Chad-Cameroon pipeline because the Chadian government failed to honour an agreement to use some oil revenues for poverty reduction.

The Chadian government "fully" prepaid the loan as of September 5, the development lender said in a statement.

The withdrawal of the World Bank capped years of tension with Chad since the signing of an initial agreement in 2001 to provide financing to support development of the Chad-Cameroon pipeline.

The deal included a specific agreement that substantial oil revenues would be directed to poverty reduction.

"Over the years, Chad failed to comply with key requirements of this agreement. A new agreement was signed in 2006, but once again the government did not allocate adequate resources critical for poverty reduction - in education, health, infrastructure, rural development and governance," the World Bank said.

"Regrettably, it became evident that the arrangements that had underpinned the Bank’s involvement in the Chad-Cameroon pipeline project were not working. The Bank therefore concluded that it could not continue to support this project under these circumstances."

The World Bank said it had clearly conveyed the risk of failing to comply with the agreement to the Chadian government, including its development partners.

The Chadian government agreed to prepay all pipeline-related financed during discussions held in Ndjamena in late August, it said.

Link to full article. May expire in future.