Chad-Cameroon Pipeline

Chad/Cam Website

Chad-Cameroon Video

World Bank Group Small and Medium Enterprise Activities in Chad

The project, expected to cost US$3.7 billion, is the single largest private sector investment in Sub-Saharan Africa. It involves developing the oil fields at Doba in southern Chad and constructing a 1,070 km pipeline to offshore oil-loading facilities on Cameroon’s Atlantic coast. The project is expected to generate substantial fiscal benefits for Chad as well as transit fees and other revenues for Cameroon.

This project was approved by the Bank in June 2000, and is a pioneering attempt to create a good framework to transform oil resources into direct benefits for the poor. The project includes an innovative program to direct new revenues to support economic and social development in Chad, which is one of the world’s poorest countries. The WBG in total will provide about US$200 million of the total financing requirements of US$3.7 billion, with the remaining balance provided by private oil companies, commercial banks and export credit agencies.

A law has been approved by Chad’s Parliament that sets out the arrangements for the use of the revenues, with 10 percent of the royalties and revenues to be held in trust for future generations, 5 percent to be earmarked for regional development in the oil-producing area, and the bulk of the remaining 85 percent to be devoted to education, health, social services, rural development, infrastructure, environmental and water resource management.

From the start, the environmental risks of this project were seen to be significant but manageable. The Environmental Impact Assessment and Management Plan, developed in accordance with the WBG safeguards and policies, were the subject of consultation with the affected people and exchanges of views with local and international NGOs aimed at ensuring that the project planners were studying the full range of potential risks and applying the appropriate standards of environmental protection. The pipeline will be buried and will have only a minor net effect on the natural and human environments. There will be little resettlement, and while a small amount of tropical forest (10-15 sq. km.) will be lost through construction, this will be compensated by the creation of two large new national parks (approximately 5,000 sq. km.) in Cameroon, which will be managed for better bio-diversity conservation. The Bank also approved two projects to help strengthen the capacity of Chad and Cameroon for environmental management and monitoring of the petroleum sector. In further support of the project, IFC has put in place an initiative that will encourage participation by local small and medium enterprises in the project's implementation, operations and related business opportunities.