OFID Funds Feasibility Study For Nigeria-Morocco Gas Project With $14.3m
Morocco and the OPEC Fund for International Development (OFID) have signed the legal documentation of $14.3 million on the partial funding of the Front End Engineering Study (FEED) for the second phase of the Nigeria-Morocco Gas Pipeline (NMGP) project.
With this, the NMGP Strategic Project, initiated by King Mohammed VI and President Muhammadu Buhari of Nigeria and sealed with a cooperation agreement in May 2017, will benefit from OFID which was established in January 1976 by the then 13 member countries of OPEC, including the United Arab Emirates as an aid channel to developing countries.
Through an exchange of correspondence with OFID’s 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 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 Nigeria and the Kingdom of Morocco.
The pipeline, that will 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, is an extension of the existing West African Gas Pipeline, which already connects Nigeria with Benin, Togo, and Ghana.
The study is co-funded by the Islamic Development Bank (IDB), and it consists of the documentation for the implementation of the NMGP project and finalising the related technical, financial and legal analyses.
The project, on completion, is expected to be a catalyst for the economic development of the North-West African region and also, integrate and improve the competitiveness and economic and social development of the regions.
There are several job-generating industries in the two regions that need gas for economic development and which the project will feed to be able to promote economic development via 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 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).
In August 2017, NNPC and ONHYM began a feasibility study which was completed in January 2019 for the pipeline that will cost $25 billion and be completed in stages spanning 25 years.
Besides the funding of the NMGP’s study, OFID recently signed 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”, which is co-financed with the World Bank, 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 would 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.
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