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IFC Appointed Advisor to Dana Gas to Implement Best Practices Framework


In Washington, D.C.:
Ludi Joseph

Phone: +1 (202) 473-7700

E-mail:
ljoseph@ifc.org


WASHINGTON, D.C./DUBAI October 17, 2005—The International Finance Corporation, the private sector arm of the World Bank Group, has been appointed by the founding shareholders of Dana Gas as  advisor to assist and advise the company in implementing a best practices framework in corporate governance, health and safety, environmental sustainability, and corporate social responsibility.

Dana Gas, currently under incorporation in Sharjah in the United Arab Emirates, will be the first regional private sector natural gas resource company in the Middle East region. The company has recently completed an initial public offering of AED 2.06 billion (UAE dirham equivalent to US$561 million) for 34.33 percent of its equity, which was oversubscribed by individual and institutional investors from across the Arabian Gulf region and beyond. The high interest in Dana Gas demonstrates a desire for inter-regional investments in the Gulf Cooperation Council and the broader Middle East region.

Dana Gas aims to be at the forefront of the growing regional natural gas industry, which includes production, transportation, processing, distribution, and other end uses.  Natural gas is still an underexploited resource in the Middle East, requiring a large amount of investment, and with an increasing role for the private sector.  Dana Gas plans to grow through acquisition, project development, and partnering with international energy companies and local industrial firms.

The original core founders of Dana Gas include Crescent Petroleum, the government of Sharjah, the Bank of Sharjah, the National Industries Group of Kuwait, and business partners from Saudi Arabia, the UAE, and Bahrain.  They were joined as founders of the company by over 300 prominent individual and institutional investors from across the Arabian Gulf region, including members of ruling families, reputable business groups, financial institutions, and government investment arms.  The founders of the company hold 65.67 percent of the company’s AED 6 billion (UAE dirham equivalent to US$1.6 billion) capital.

In the face of rapid economic development, growth, and liberalization, there is also a need to address the complex social and environmental issues faced in the gas sector. IFC sees a strong role in the region to promote an economic model of sustainable development.

Bernard Sheahan, IFC director of advisory services, said, “IFC is delighted that Dana Gas is voluntarily adopting best practices in the crucial areas of corporate governance, social responsibility, and environmental sustainability and that it has asked us for advice in these areas.  IFC is committed to promoting sustainable development worldwide, and Dana Gas will be able to leverage IFC’s extensive experience helping companies in the emerging markets to address these issues. More importantly, Dana Gas could serve as a model for other local and regional companies in the Gulf and Middle East regions to adopt best international practices.”

Hamid Jafar, executive chairman of Dana Gas, added, “We are proud to be associated with a world-class institution like IFC, which is helping us formulate policies and implement best international business practices, particularly during our company’s formative years.”

The IFC, the private sector arm of the World Bank Group, promotes sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Its 178 member countries provide its share capital and collectively determine its policies.

From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.  For more information, visit
www.ifc.org.