Sasol Petroleum Temane Limitada (SPT)

MIGA has provided the Sasol Limited Group of South Africa ("Sasol") with guarantees for $27 million to cover $30 million of its investment in Sasol Petroleum Temane Limitada (SPT), Mozambique and $45 million to cover $50 million of its investment in the Mozambican branch of Republic of Mozambique Pipeline Investment Company (Pty) Ltd (ROMPCO), South Africa. Both SPT and ROMPCO will initially be wholly-owned subsidiaries of Sasol. The guarantees are for a period of up to 15 years against the risks of: Transfer Restriction, Expropriation, War and Civil Disturbance, and Breach of Contract. MIGA's participation was a necessary component for the completion of the deal. ^[1]

The project involves the development of the Temane and Pande gas fields, the construction of a central processing facility (CPF), to clean and compress the gas, and the construction of a 865 km cross-border gas pipeline from Temane in Mozambique to Secunda in South Africa. Sasol will also be converting an existing petrochemical plant in South Africa from coal as feedstock to gas.

The project will contribute to developing the Mozambican economy through monetizing its gas reserve - the country will receive significant royalty payments as well as dividends, production bonuses, and corporate taxes in excess of US$2 billion over the 25-year lifetime of the project.

Environmentally, the project will contribute to the reduction of harmful emissions by replacing sulphur-rich coal and heavy oils with clean burning natural gas. The project will provide contracting opportunities for both Mozambican and South African companies during the construction phase. The upstream benefits for local enterprises are estimated to be in excess of $1 million per year. The project is expected to create more than 720 job opportunities for local employees during construction. After completion, it is estimated that the CPF and the pipeline will require staff of 25 and 85, respectively. The project will be a substantial addition to Mozambique's infrastructure through the development of roads, water supplies and the removal of land mines. The Sasol project meets two of MIGA's priority concerns: it is a South-South Investment and in an IDA eligible country. Furthermore, it represents the first cross border initiative in sub-Saharan Africa in developing regional natural gas markets.

^[1] The guarantee was Cancelled on June 19, 2015.