WASHINGTON, D.C., June 26 -- The International Finance Corporation (IFC) announced the signing of a financing package of up to US$65 million for Kazgermunai (KGM), a German-Kazak joint venture in Kazakstan that is considered a significant step in revitalizing the Kazak oil industry. KGM will produce and export up to 22,000 barrels per day of crude oil from the Akshabulak, Nuraly, and Aksay oil fields in the south Turgai basin of central Kazakstan.
Speaking at the signing, IFC's Director of Oil, Gas and Mining, Mr. Azam Alizai said, "IFC's investment in KGM, the Corporation's largest to date in the former Soviet Union and the first in Kazakstan's oil sector, is an important beginning to support the industry, which is considered the linchpin for Kazakstan's long-term economic growth and development. The project will help alleviate oil shortages in eastern Kazakstan and earn valuable foreign exchange for the country."
IFC's investment consists of equity and shareholder loans of up to US$65 million for its share of the US$250 million oil field development project. KGM, one of the first joint ventures in the Kazak oil sector, is owned by RWE-DEA (25%), a major German energy concern; Erdol-Erdgas Gommern GmbH (17.5%), a subsidiary of the Gaz de France Group; and IFC (7.5%); with the balance held by Yuzkazneftegas (50%), a subsidiary of the Kazak state-owned oil company, Munaigas.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries. To date, IFC has invested about US$3.6 billion-in oil and gas projects worldwide, of which $1.9 billion was for IFC's account.
