The World Bank’s board of directors have recently approved an investment guarantee for the US$590 million West Africa gas pipeline (WAGP) despite strong civil society resistance. The pipeline will transport natural gas from the Western Niger Delta area of Nigeria, to Togo, Benin and Ghana. After funding the initial feasibility studies for the pipeline in 1992, the Bank has now provided a US$125 million investment guarantee to encourage private investors to support the project and come up with the remaining US$465 million. Bank spokesman, Herbert Yusimbom Boh, justified the Bank’s endorsement as a partial guarantee “in the event that the countries involved would default”, and as assurance for companies involved in the project.
Sponsors anticipate the pipeline will be operational by the end of 2006. The project is being promoted as a contributor to regional integration in light of the industrial development of the ECOWAS sub-region.
Civil society organisations in the region have raised concerns about the violence and instability in the oil and gas communities of the Niger Delta, and the sincerity of claims that the project will help reduce gas flaring. Transparency of decision-making and the accountability of the project sponsors are also issues, given that the West African Gas Pipeline Company is registered in Bermuda.
Nigerian NGO Environmental Rights Action (ERA) fears that the sourcing of gas could exacerbate violence in a region with a history of conflict between communities, the Nigerian government, and oil companies. Ghanaian NGOs have expressed concerns that such violence could jeorpadise the security of the gas supply to Ghana and disturb the relations between the two societies if Ghanaians are seen to be benefiting from a resource at the expense of Nigerians.
It is unclear exactly where gas for the pipeline will come from. Civil society groups are insisting that a clear and concrete plan to reduce flaring can be put in place before the project proceeds. However, the World Bank’s project information document maintains that the project will contribute to positive environmental impacts on both the upstream and downstream ends of the pipeline.
Doubts have also been raised about benefits to local communities. Villages, farmland and acquatic ecosystems will be seriously disrupted as a result of project construction. It remains unclear who will be the primary beneficiaries of gas transported through the WAGP and what percentage of the output will go to industrial, domestic use and export.
According to a press release by Friends of the Earth Nigeria/ Environmental Rights Action, Nigerian communities who will be affected by the pipeline instituted an action at the Federal High Court in Lagos to challenge the project. They claim that the pipeline “is being implemented without respect for Nigerian laws and in total disregard of environmental and livelihood concerns of Nigerian communities”.
A recent mission of Bank staff to the area concluded that the consultation process carried out with local communities was adequate, and also down played the pipeline’s contribution to ending gas flaring.