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Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.
Project Name Afrigas (SL) Limited
Guarantee Holder Geogas Trading SA
Investor Country Switzerland
Host Country Sierra Leone
Sector Services
Gross Exposure ($million) 6
Fiscal Year 2010
Status Proposed
Project Number 8085
Environmental Category B
Date SPG Disclosed June 15, 2009
Project Board Date July 30, 2009

Project Description

This summary covers an investment by Geogas Trading SA of Switzerland in a liquefied petroleum gas (LPG) storage and distribution project in Sierra Leone. The investor plans to enter into a joint-venture company, Afrigas (SL) Limited, with a local investor, Benco Trading Limited, and has applied for a MIGA guarantee of $6 million for a period of up to five years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The aim of the project is to introduce permanent LPG bulk storage facilities to supply the local market with LPG. The LPG would be used primarily for cooking, but could also be used for industrial practices such as welding and cooling. In addition to constructing the storage facilities, the project will establish four filling stations for five-kilogram LPG gas bottles.

Environmental Categorization

The project is a Category B under MIGA’s environmental and social review procedures because the impacts are limited in number, and mitigation measures are readily identifiable. The key environmental and social issues are community and workers’ health and safety, solid and liquid waste management, hazardous materials management, and air emissions both for on-site facilities and in the transportation of gas. Construction activities associated with this investment are expected to be temporary and localized. 

Development Impact

The project will establish the first permanent LPG storage facility in Sierra Leone and is expected to result in a price reduction of 60 percent for LPG. LPG offers several advantages over traditional biomass fuels, such as wood and charcoal, including the reduction of deforestation and fewer respiratory illnesses resulting from indoor pollution. It can also improve productivity, particularly for women, by reducing the amount of time spent gathering firewood. LPG can also be used in microenterprises such as food preparation and processing and metal works.

MIGA’s support for this investment is aligned with the World Bank Group’s country partnership strategy for Sierra Leone, particularly with regard to supporting the development of a competitive private sector.

MIGA’s participation in the project is also aligned with key agency priorities, which include encouraging investment in post-conflict and IDA-eligible countries. The project would be underwritten through MIGA’s Small Investment Program.

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