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Projects

Summary of proposed guarantee

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. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Banda Gas-to-Power Project (Upstream)
Project ID
11960
Fiscal year
2014
Status
Proposed
Guarantee holder
Tullow Petroleum (Mauritania) Pty Ltd
Investor country
Australia
Host country
Mauritania
Environmental category
A
Sector
Oil and Gas
Date SPG disclosed
March 12, 2014
Projected Board date
May 20, 2014
Gross exposure
 $585.0 million
Project type
Non-SIP
Strategic priority area
Complex
IDA
ESRS
Orignial version in PDF, disclosed on March 12, 2014

Project description

This summary covers an equity investment by Tullow Petroleum (Mauritania) Pty Ltd. of Australia and other joint venture partners including Mauritania Holdings B.V., PC Mauritania 1 Pty, Ltd., PC Mauritania II B.V, Premier Oil Exploration (Mauritania) Limited, FP Mauritania A BV., and Tullow Oil (Mauritania) Ltd. Tullow Petroleum (Mauritania) Pty Ltd., (Tullow) will be acting for itself and as an agent on behalf of the members of the upstream consortium. Tullow has applied for a MIGA guarantee of up to $585 million representing 90 percent of the project cost, for a period of up to 20 years against the risks of breach of contract, expropriation, war and civil disturbance, and transfer restriction and inconvertibility. MIGA’s cover will be complemented by partial risk guarantees from the World Bank’s International Development Association (IDA).

The project involves the development of the Banda gas field, an upstream offshore field, and a downstream power plant in Mauritania. The Banda Gas-to-Power portion of the project will develop natural gas resources from the Banda gas field. The gas produced will serve as the primary fuel source for two power plants to be built in the north of Nouakchott with a total capacity to produce 300 megawatts. This will serve Mauritania and export power to Senegal and Mali. MIGA’s guarantee to Tullow and the other members of the upstream consortium will be for the upstream portion of the project.

The Banda gas field is located approximately 70 kilometers offshore of Nouakchott. It is owned by a consortium of investors. Tullow acquired operatorship of the Banda field in November 2011 and declared the Banda field as a commercial discovery in September 2012. Tullow prepared a field development plan, which provides for production of up to 65 million standard cubic feet per day of gas over 20 years. It consists of two subsea wells tied back to an onshore gas processing plant via a sub-sea production manifold and a 10-inch sub-sea pipeline. Production of the first gas is currently targeted for March 31, 2016.

Environmental Categorization

The project is a category A under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary. MIGA intends to present the project to the Board concurrently with IDA.

Development Impact

The project will help Mauritania, Mali, and Senegal address their significant energy deficits. Moreover, the project could also have a transformational demonstration effect, creating a basis for deeper regional cooperation and attracting further investment into the region. The project is explicitly included in the proposed World Bank Group Country Partnership Strategy for Mauritania and has the potential to radically transform Mauritania's economy. In addition to providing more affordable and reliable energy, the government’s tax revenues and profits stemming from the project are estimated at $1.6 billion over the project’s lifetime.

The combination of the IDA partial risk guarantees and the MIGA guarantee are expected to encourage other private investments in Mauritania’s energy and infrastructure sectors by demonstrating that the government of Mauritania can offer a tested credit enhancement framework to attract investors.

The proposed project is also aligned with MIGA’s priorities of supporting investments in complex infrastructure projects and into countries eligible for concessional lending from IDA.

 
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