Leveraging Project Finance for Development: The Chad-Cameroon Oilfield Development and Pipeline Project

Abstract

The Chad-Cameroon oilfield development and pipeline project was a major attempt by the international community to leverage an extractive industries project to promote development in a fragile state. The project is notable for its size and ambition, and for the intensive participation of multilateral institutions, multinational corporations, governments, and civil society. The centerpiece of the project was an elaborate revenue management program designed to funnel oil revenues to priority sectors in Chad. However, unanticipated developments, including a deteriorating security situation, gradually eroded the Chadian government’s compliance with the program, resulting in disbursement suspensions and renegotiations. The program was prematurely terminated when the government of Chad fully prepaid its remaining financial obligations to the World Bank after just seven years of the project’s anticipated 20-30 year lifespan. Once hailed as a newly emergent model for development, the project now offers important lessons stressing the need for greater pragmatism in the future.