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The rules are part of a 1999 agreement with the World Bank to get financing for the Chad-Cameroon Oil Pipeline Project, which was completed in 2003.

The World Bank on Thursday accused the parliament of Chad, one of the world’s poorest countries, of putting its poorest people at risk by canceling requirements that some oil revenues reduce poverty.

The rules are part of a 1999 agreement with the World Bank to get financing for the Chad-Cameroon Oil Pipeline Project, which was completed in 2003.

Loans for the $ 4.1 billion project – which transports oil from landlocked Chad in central Africa through Cameroon to the Douala area for export – required that a large portion of the oil revenues be used to reduce poverty.

But the Chadian National Assembly has passed legislation that would double the percentage of oil revenues the can be spent without oversight, to 30 percent. It also scraps a requirement that 10 percent be set aside in a fund to be used once oil resources run out.

‘If these amendments become law, it will harm the well-being of Chad’s poorest and most vulnerable citizens and represent a material breach of the original agreement,’ World Bank President Paul Wolfowitz said Thursday.

He said he was consulting with other World Bank partners to consider what steps might be taken. The United States is the largest shareholder in the World Bank and its sister lending institution, the International Monetary Fund.

A statement from the bank said remedies for a breach of contract include suspension of new credits or grants, a halt in disbursement of funds, and a requirement for accelerated repayment of loans already extended.

World Bank entities financed or guaranteed $ 192.9 million of the $ 4.1 billion pipeline project.

It is the largest privately financed project in sub-Saharan Africa, with private companies paying $ 3.5 billion or 85 percent of the total. According to the World Bank, among the private backers are Exxon Mobil Corp, which operates the pipeline and has 40 percent of the private-sector interest; Petronas of Malaysia, 35 percent; and ChevronTexaco, 25 percent.

Source : www.twincities.com

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