Sunday May 01, 2022
OFID to finance part of phase II of Nigeria-Morocco Gas Pipeline’s FEED
The project is intended to be a catalyst for the economic development of the North-West African region.
Morocco and the OPEC Fund for International Development (OFID) have signed the legal documentation on the partial funding of the second phase of the Nigeria-Morocco Gas Pipeline (NMGP) project’s Front End Engineering Study (FEED).
“Through an exchange of correspondence with OFID Director-General Abdulhamid Al Khalifa and with Amina Benkhadra, Director-General of the National Office of Hydrocarbons and Mines (ONHYM), the Minister of Economy and Finance Nadia Fettah signed the legal documentation relating to the $14.3 million financing granted by the OPEC Fund to ONHYM as part of its contribution to the financing of the second phase of the Front End Engineering Study of the gas pipeline linking the Federal Republic of Nigeria and the Kingdom of Morocco,” the ministry said in a statement on Friday.
Co-funded by the Islamic Development Bank (IDB), the study consists in preparing the documentation for the implementation of the NMGP project and in finalising the related technical, financial and legal analyses, according to the same source.
The NMGP Strategic Project was initiated by His Majesty King Mohammed VI and President Muhammadu Buhari of Nigeria. A cooperation agreement was signed in that regard in May 2017. The project is intended to be a catalyst for the economic development of the North-West African region. It carries a strong desire to integrate and improve the competitiveness and economic and social development of the region, through the development of the NMGP project.
It also aims to boost the regional economy through the promotion of economic development in North West Africa, the development of job-generating industries, the reduction of gas “flaring” and the use of reliable and sustainable energy.
Through its support for this project, a model of South-South cooperation, OPEC Fund strengthens, by the same token, its financial cooperation relations with Morocco and contributes to the economic and social dynamics of the Kingdom, the statement concluded.
The Nigeria-Morocco Gas Pipeline was proposed in a December 2016 agreement between the Nigerian National Petroleum Corporation (NNPC) and the Moroccan Office National des Hydrocarbures et des Mines (National Board of Hydrocarbons and Mines) (ONHYM). The pipeline would connect Nigerian gas to every coastal country in West Africa (Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, and Mauritania), ending at Tangiers, Morocco, and Cádiz, Spain. It would apparently be an extension of the existing West African Gas Pipeline, which already connects Nigeria with Benin, Togo, and Ghana.
In August 2017, NNPC and ONHYM began a feasibility study for the pipeline. The pipeline is estimated to cost $25 billion, and would be completed in stages over 25 years.
NNPC and ONHYM completed the feasibility study for the construction of the pipeline in January of 2019.
The OPEC Fund for International Development (OFID) also signed recently a $100 million loan agreement with the government of Morocco to help build an inclusive financial sector as part of broader efforts to modernise the economy and support the Kingdom’s recovery from the COVID-19 pandemic.
Under the “Financial and Digital Inclusion Programme”, co-financed with the World Bank, the government of Morocco will implement reforms to provide households and firms with affordable, transparent and sustainable financial services – a key plank in its five-year strategy that aims to create a more enabling business environment.
The programme will help expand digital financial services, such as insurance, credit and banking, to provide individuals and small businesses with increased and easy access to financial systems.
The OPEC Fund’s loan will cover two main pillars. The first aims to ensure financial inclusion by diversifying financing and payment sources for individuals and micro, small and medium-sized enterprises (MSMEs) by leveraging technology and supporting alternative financing models and infrastructure.
The second goal is to finance reforms to help digital entrepreneurs and MSMEs harness economic opportunities, while nurturing the economic inclusion of youth, women and graduates.
OPEC Fund Director-General Dr Abdulhamid Alkhalifa said, “Inclusive innovation is a key enabler of sustainable development. This loan, which focuses on financial and digital inclusion, will help to empower the more vulnerable and impacted populations such as youth, women, small businesses and entrepreneurs and bolster the country’s long-term sustainable economic recovery.”
OFID was established in January 1976 by the then 13 member countries of OPEC, including the United Arab Emirates. The development finance institution is established as an aid channel to developing countries.