Iraq Approves Loan Guarantees For Major Gas Project
(MENAFN- Iraq Business News) By John Lee.
The Iraqi Cabinet has approved sovereign guarantees totalling $3.25 billion, in relation to the development of the Nahr Bin Umar [Nahr Ben Umar] gas field in Basra.
It also exempted the special purpose company Halfaya Gas Company Ltd. (HGC) , which was established to develop the field, from the requirement to submit two years of accounts, on condition that the parent company submits its accounts.
The media Office of the Prime Minister said in a statement (translated from Arabic):
In the energy sector, based on the federal Budget Law and facilitation instructions for its implementation, the Cabinet approved the recommendations of the Sovereign Guarantees Committee, convened on March 24, 2024, regarding the Ben Omar Gas Field project as follows:
Amendment of Cabinet Resolution No. 23693 of 2023 to clarify that the guarantee mentioned therein is a debt guarantee rather than a payment guarantee. The amount specified represents a guarantee for loan repayment and accrued interest according to the economic model of the Ben Omar Gas Field project.
Issuance of a sovereign guarantee (debt guarantee) with interest to the lending banks totaling $3,246,000,000, for a duration not exceeding 11 years for the Ben Omar Gas Field project. This follows the Oil Ministry/South Gas Company's modification of the contract through the drafting of a contract appendix to define the scope of government guarantee.
Exemption of the aforementioned guarantee from the provisions of Article 17 of the aforementioned instructions.
Exemption of the Halfaya Gas Company [HGC] from Cabinet Resolution No. 219 of 2020, as it is a newly established company created for the purpose of establishing the Ben Omar Gas Field project. The parent company, Raban as Safina, is required to submit financial statements for the previous two years, audited by one of the reputable auditing firms to the Ministry of Finance, after the Halfaya Gas Company submits evidence that it is a subsidiary of this company.
(Source: PMO)
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