Chad-Cameroon Petroleum Development and Pipeline Project Summary Of Project Information (SPI)       Project Name    Chad-Cameroon - Chad Cameroon Petroleum Development and Pipeline project      RegionSub-Saharan Africa   Sector   Project No004338   Projected Board DateApril 4, 2000   Company NameTchad Oil Transportation Company S.A. (TOTCO) and Cameroon Oil Transportation Company S.A. (COTCO)   Technical Partner and/or Major Shareholders    	TOTCO and COTCO will be majority-owned by a consortium of private sponsors, lead by an affiliate of of Exxon or its successor or assignee  collectively the private sponsors. An affiliate of Exxon will act as project management company and operator.     Project Cost Including proposed IFC investment    	Total project cost is estimated at $3.5 billion: $1.5 billion for the oilfield development, to be funded by equity from the private sponsors; and $2 billion for a related pipeline export system, for which the IFC and the International Bank for Reconstruction and Development (IBRD or "the World Bank") financing is proposed. The export system is expected to be financed by $100 million IFC A loans, up to $300 million IFC syndicated B loans, $600 million from export credit agencies and commercial banks, a $400 million bond offering, $112 million equity from Chad and Cameroon, to be funded by IBRD and the European Investment Bank (EIB), and $500 million in equity from the private sponsors.    Location of project and Description of site    	The project consists of two components: (a) the development of three oil fields in the Doba basin in southwestern Chad, including drilling of about 300 wells and construction of associated facilities and infrastructure; and (b) (i) the construction of an underground 1,070 km pipeline from the Doba oil fields to Cameroons Atlantic coast at Kribi, three related pumping stations, ancillary facilities and infrastructure improvements, and (ii) the installation of off-shore export terminal facilities and an 12 km submarine pipeline from the Atlantic coastline to the terminal. Component (a) constitutes the oilfield development and component (b) the "pipeline export system", through which all the oil from the three Doba oil fields is expected to flow. All technology to be used is well known and proven.    	The project area may be described in terms of five ecological zones described from North to South: the wooded savanna zone extends from the area of the oil fields in Chad to the general vicinity of Mararaba on the pipeline route in Cameroon (485 km); the semi-deciduous forest zone extends from Mararaba to Batchenga (310 km); the mixed forest zone from Batchenga to Ngoumou (80 km); the Atlantic Littoral zone from Ngoumou to the coast (195 km); and the marine zone from the coast to the offshore loading facility (11 km).    Description of Company and Purpose of Project    	The borrowers of the IFC loans will be:    - TOTCO, a special-purpose company incorporated in Chad as a joint-venture between the private sponsors, and the Government of Chad, which will own and operate the Chad portion of the pipeline export system; and   - COTCO, a special-purpose company incorporated in Cameroon as a joint-venture between the private sponsors, and the Governments of Cameroon and Chad, which will own and operate the Cameroon portion of the pipeline export system. TOTCO and COTCO will transport crude oil to the export-loading terminal through their respective portions of the pipeline export system.    	The project, one of the largest single investment projects in the region ever, is expected to generate positive benefits for Chad and Cameroon over its operating period. In particular, it will generate tax and other revenues and should help ease some of the financing constraints faced by the two countries, particularly Chad, one of the world''s poorest countries. Additional benefits arise from infrastructure improvements, and significant foreign direct investment as well as some employment generation in both Chad and Cameroon (3,000 to 4,500 Chadians and Cameroonians are expected to be hired during the construction phase, and approximately 350-400 Chadians and Cameroonians during the operations phase). Positive spillover effects in the region will also occur from project spending. In addition, the project would contribute to strengthening the environmental ministries in both countries through the development and implementation of extensive environmental and social mitigation plans. This would be further supported by proposed IBRD parallel capacity building projects.    	IFC will fulfill three key roles through its proposed investment. Firstly, IFC will play a catalytic role in mobilizing long-term finance that would otherwise be unavailable given the project-specific political risk engendered by the cross-border nature of the pipeline and other perceived political risks in each country. The project represents the first syndicated financing for Chad, and if implemented, the first bond financing in the international markets for both countries. Secondly, IFC and the IBRD will help to ensure stability of the projects arrangements and operation, and will play a critical role in a project involving cooperation between two governments and international oil companies. In such an environment, IFC, as well as the IBRD, can help to ensure confidence in the basic commercial and technical soundness of the project and reduce impact as various agreements are tested in practice. Thirdly, the joint IFC/IBRD involvement has already resulted in raising the standard and quality of the environmental assessments and mitigation plans, including significant adjustments to project design to avoid environmentally sensitive areas in Cameroon. The World Bank Group, through an integrated IFC/IBRD approach, is ensuring that the project is in compliance with all applicable World Bank Group environmental and social policies and guidelines, and will carefully monitor the implementation of the Environmental Management Plans.    Environmental Category and Issues    	This is a category A project according to the Bank and IFC Environmental and Social Review Procedures. Environmental and social issues associated with the project include, but are not limited to: direct (including resettlement) and induced social impacts related to the development of the three oil fields in the Doba Basin; alternative analysis of candidate pipeline corridors and pipeline alignment within the preferred corridor; compensation for socioeconomic impacts in the three oil fields and along the selected pipeline alignment; avoidance, mitigation and compensation of impacts to biodiversity; a plan for the mitigation of impacts to the Bakola population in the Republic of Cameroon, oil spill prevention and response planning; and worker and public health and safety. To identify and predict impacts relating to these and other issues separate Environmental Impact Assessments (EIAs) were prepared for the Chad and Cameroon portions of the project. On the basis of these EIAs, environmental management plans (EMPs) have been prepared for the respective countries. IBRD and IFC have worked closely to ensure that the respective governments and private sponsors will implement the EMPs in a timely and prudent fashion.    	A Regional Development Plan has been prepared by the Government of Chad for the Doba oilfield area that focuses on land and resource management and the mitigation of induced migration to the area. The private sponsors will complement this plan through measures designed to prevent/reduce and monitor induced impacts. A Chad Resettlement and Compensation Plan is in place for households affected by the project.  It is estimated that less than 150 households will need to be moved.  Likely project impacts and compensation arrangements were extensively and thoroughly discussed with people in the area. Many have opted for compensation in kind (such as ox-ploughs and donkey carts). A very high percentage of those who opted for cash compensation have re-invested in agriculture or livestock.    	Alternative corridors have been assessed for the pipeline and alignment of the pipeline within the preferred corridor has been optimized from cost, technical, safety, environment and social perspectives. A plan for archaeological finds is in place while pipeline construction and oil field development activities will minimize impacts to sacred sites. In addition to aligning the pipeline to follow existing infrastructure and/or traverse degraded land, biodiversity impact mitigation includes two offsite environmental enhancement programs - one for the semi-deciduous forest and one for the Atlantic Littoral forest.    	Resettlement is not expected in Cameroon. However, very limited resettlement is possible with respect to ancillary infrastructure (mainly roads). In the event that resettlement does arise, the private sponsors will comply with OD 4.30 on Involuntary Resettlement.  Extensive and frequent public consultation has taken place on the subject of likely project impacts and compensation measures. Compensation rates for all crops, trees, and other assets have been well researched and discussed with both affected people and all categories of land tenure. The private sponsors will pay compensation at real market values, which are over and above government schedules.           Bakola forest people and Bantu farmers inhabit the pipeline corridor/alignment through the Atlantic Littoral forest. Although impacts on this Bakola population are transitory, the private sponsors have provided funds, guaranteed through a foundation for a twenty-eight year period, for an Indigenous Peoples Plan which supports health, education, and economic development projects for this marginalized ethnic group.    	While the project has been designed to avoid oil spill risks, a General Oil Spill Response Plan has been prepared. This plan is in accordance with guidelines from the International Petroleum Industry Environmental Conservation Association, generally acknowledged to be the industry standard. It includes an Environmental Sensitivity Index which prioritises response actions to high risk areas. It also has details of safety mechanisms for the offshore export terminal. Area-specific oil spill response plans (for the three fields in the Doba Basin, at the offshore facility, etc.) will be in place before first oil. The EMPs also include comprehensive measures to protect worker and public health and safety.    	Upstream (in Chad) a revenue management plan, including involvement of civil society, has been prepared. World Bank Capacity Building (CB) programs are to be implemented to strengthen capacity in the respective countries particularly as they relate to the implementation and monitoring of project EMPs. A Foundation will be established to fund the two environmental enhancement programs and the Indigenous Peoples Plan in Cameroon.          In addition to World Bank Groups own monitoring, the project includes a provision for an Environmental Compliance Monitor who will act on behalf of the Bank Group to regularly review contractors and sponsors implementation of the EMPs.     	The project, as designed, will comply with applicable World Bank environmental and health and safety guidelines and IFC safeguard policies.     The Environmental documents are  from the InfoShop.       Host country location of environmental documents    The environmental documents have been made available in several locations in Cameroon and Chad, including:    Cameroon:   At the World Bank resident mission in Yaounde (Street 1.792. No.186, Yaounde, Cameroon);   in public reading rooms in Douala and Yaounde;    in public reading rooms in the project area, including Kribi and Belabo.    Republic of Chad:   In public reading rooms in the project area, including the Doba Cultural Center, and in N''Djamena.      Date SPI sent to InfoShop     Date revised SPI sent to InfoshopMarch 3, 2000   March 6, 2000   This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:     Corporate Relations Unit    Telephone: (202) 473-3800   Fax: (202) 974-4384  Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).