Washington, D.C., May 17, 2001
—The International Finance Corporation is launching an initiative in close cooperation with local private and public stakeholders to increase local contractor involvement in the US$3.7 billion Chad-Cameroon Petroleum Development and Pipeline Project. The initiative—which will help ensure that direct benefits from the project reach the local private sector—includes an initial $150,000 package of training and technical assistance programs in Chad that will be implemented in the next few months.
The objective is to help local enterprises in Chad and Cameroon provide goods and services during the implementation and operational phases of the pipeline project, thus strengthening the small and medium enterprise (SME) sector that dominates the local economy, particularly in Chad. It will also address the institutional, technical, and financing obstacles that limit the ability of SMEs to benefit from business opportunities expected with the pipeline project’s execution.
Mr. Rashad Kaldany, IFC Director for Oil, Gas, and Chemicals, said the SME initiative has been designed with sustainability and partnership in mind and is a natural fit with IFC’s developmental role and its larger financing package for the pipeline project. He added that two key areas—skills upgrade and enhancement, and access to capital—have been targeted to enhance the ability of local companies to benefit from the pipeline project.
The initiative’s first phase, concentrating on Chad, contributes to training programs for local SMEs to strengthen their business standards and ability to supply the project’s major contractors. The African Project Development Facility (APDF), an IFC-managed multidonor initiative for African SMEs, will organize and manage this effort. The APDF, in collaboration with the Association of Chadian Construction Companies (SEBA) and the local chamber of commerce, has identified technical training for construction companies and more general entrepreneurial and management training for local businesses as areas that need strengthening. Subsequent technical assistance programs are expected to involve the African Management Services Company, another IFC-managed multidonor agency providing managerial support to individual African enterprises.
The initial financing package also includes the establishment of a commercially viable local microfinance institution. The feasibility study is being carried out by Horus Banque Finance for Finadev, a new microfinance institution in Benin. As most businesses in Chad are microenterprises in the informal sector, a microfinance vehicle will be crucial to ensuring that the SME initiative linked to the pipeline project can create much needed financial support for the private sector. A second phase extending assistance to Cameroon is under review.
The Chad-Cameroon SME initiative is part of a larger IFC program to strengthen links between the SME sector and corporations in large projects supported by the World Bank Group. So far, $700,000 has been set aside for the technical assistance components of such programs through IFC’s SME Capacity Building Facility.
The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries as a way to reduce poverty and improve people’s lives. IFC finances private sector investments in emerging markets, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
