Washington, D.C., February 5, 2007
— The International Finance Corporation, the private sector arm of the
World Bank Group, has signed an agreement to support natural gas development
in Bulgaria and Egypt in an effort to promote consumption of gas as a cleaner
and more convenient fuel. The IFC has provided a $50 million loan to the
Bulgarian and Egyptian subsidiaries of UK-based oil and gas producer Melrose
Resources. IFC is making the investment in partnership with commercial
banks that have provided another $240 million to Melrose.
IFC’s financing will support the development of domestic gas reserves
in Bulgaria and Egypt, helping meet growing demand, bolster employment,
and create supply opportunities for local providers of goods and services.
Melrose is an important player in the natural gas sectors of both countries
and procures about 70 percent of its purchases locally. It also offers
significant employment opportunities in both countries.
“Melrose and IFC are long-term partners. This is IFC’s third investment
to support the company’s growth strategy. Through these investments we
are promoting the use of cleaner fuels in Bulgaria and Egypt, encouraging
private sector involvement, and creating employment and local sourcing
opportunities,” said Somit Varma, Associate Director of IFC’s Oil, Gas,
Mining, and Chemicals Department.
The financing in Egypt is a revolving credit facility to support exploration
and development in the El Mansoura, Southeast El Mansoura, and Qantara
concessions in the onshore Nile Delta. In Bulgaria, the financing
supports exploration in Melrose’s concessions offshore in the western
Black Sea. In 2002, IFC helped finance Melrose’s development of Bulgaria’s
Galata gas field, and it made a corporate financing to the company in 2004.
In Egypt’s El Mansoura area, recent oil and gas discoveries are being
brought into production, and further appraisal and exploration is ongoing.
IFC works with private companies in critical sectors of Egypt’s economy.
The hydrocarbon sector is a strong source of foreign investment for
the country and an important contributor to its gross domestic product.
Michael Essex, IFC’s Director for the Middle East and North Africa region,
said, “Melrose is a growing player in the Egyptian energy sector. IFC
has a clear mandate to support investment in developing the country’s
natural resources, which is critical to meeting increasing domestic energy
demand and growing the local economy.”
In Bulgaria, Melrose subsidiaries Petreco S.a.r.l and Petreco Bulgaria
EOOD are producing in the Galata gas field and have four adjacent offshore
exploration concessions. The Galata field was the first upstream oil and
gas development undertaken by the private sector in Bulgaria.
Robert Adair, Chairman of Melrose, said, “We have built a strong partnership
with IFC, which has been integral to our growth in the Bulgarian and Egyptian
energy markets. We look forward to continuing our relationship with IFC
and benefiting from its extensive regional and sector expertise.”
The International Finance Corporation, the private sector arm of the World
Bank Group, is the largest multilateral provider of financing for private
enterprise in developing countries. IFC finances private sector investments,
mobilizes capital in international financial markets, facilitates trade,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to businesses and governments. From its
founding in 1956 through FY06, IFC has committed more than $56 billion
of its own funds for private sector investments in the developing world
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. With the support of funding from donors, it
has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.