World Bank pulls out of Chad projectNovember 2008
The World Bank has withdrawn from a deal to fund an oil project with the government of Chad after politicians there failed to convince the institution that revenues would be contributed to anti-poverty programmes.
The bank said the $140million (£81m) financing arrangement had been ended following inconclusive talks with the government, which had earlier agreed to plough 70 per cent of its oil revenues back into community, health and education projects.
The bank said: ‘Regrettably, it became evident that the arrangements that had underpinned the bank’s involvement in the project were not working.’
Chad is expected to earn about $1.4billion in oil revenues this year but its poverty levels are among the world’s highest.
The 620-mile (1000km) pipeline, which is operated by ExxonMobil, carries oil from Chad through Cameroon to international markets, and allied works are still in progress. It transports 170,000 barrels a day.
The bank had been warned by local and international development groups that the project had little chance of reducing poverty, said Ian Gary, senior policy adviser for extractive industries at Oxfam America. ‘The World Bank must absorb the lessons of failure from this and other oil and mining projects around the world and avoid financing such efforts in places not yet ready to manage the risks,’ he said.
The World Bank is involved in several other development projects in Chad, and these are expected to be reviewed soon. It and Exxon Mobil are long-time supporters of the Extractive Industries Transparency Initiative, which promotes transparency on oil revenues in developing nations. However, Chad is not a formal signatory to the initiative.
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