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
- Qua Iboe Power Project
- Project ID
- Fiscal year
- Guarantee holder
Mobil Development Nigeria, Inc.
Mobil Exploration Nigeria, Inc.
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- June 17, 2014
- Projected Board date
- July 25, 2014
- Gross exposure
- $540.0 million
- Project type
- Strategic priority area
- Original version in PDF, disclosed on June 17 2014
This summary covers equity investments by Mobil Exploration Nigeria, Inc. and Mobil Development Nigeria, Inc. (subsidiaries of Exxon Mobil Corporation) in the Qua Iboe Power Project in Nigeria. The investors have applied for a MIGA guarantee of up to $540 million for a period of up to 20 years against the risk of breach of contract.
The project involves the construction, operation, and maintenance of a 533 megawatt gas-fired power plant in Ibeno on the southeastern coast of Nigeria and construction of a 58 kilometer 330 kV double-circuit transmission line from the power plant to a substation at Ikot Abasi.
The plant is one of a number of independent power producers (IPPs) that meet the aspirations of the Nigerian government’s Roadmap for Power Sector Reform, which stipulates that the majority of the country’s new power generating capacity will come from IPPs.
The World Bank is also supporting this project through an IBRD Partial Risk Guarantee that covers the government’s payment obligations under the power purchase agreement.
Although Nigeria is one of the largest oil producers in the world and has the seventh largest gas reserves, more than half of its people lack access to electricity. Even when power is available, recurrent power outages continue to force industrial and residential consumers to install and run costly power generators. A reliable, affordable, and sustainable supply of power is essential for Nigeria to emerge as a G20 country and achieve the objectives outlined in its own long-term development plan, Vision 2020.
The project is aligned with the World Bank Group’s country partnership strategy for Nigeria, which calls for the use of Bank Group financing and guarantee instruments to support the government’s reforms. The project is also aligned with MIGA’s strategic priorities of supporting investments in complex infrastructure projects and into countries eligible for concessional lending from the International Development Association.