Tuesday, January 24, 2012

The IFC Invests $9.7 Million in Tunisia


Canada Newswire: IFC Invests in Candax Energy, Supporting Economic Development in Tunisia
IFC: IFC Organization; Summary of Proposed Investment
NASDAQ: World Bank Group Member, IFC, C$9.8 Million in Candax Energy
Scandinavian Oil & Gas Magazine: Candax Signs Investment Agreement for $11 Million Private Placement

The International Financial Corporation (IFC), a member of the World Bank Group, agreed this week to invest $9.8 million Canadian dollars ($9.7 million U.S. dollars) in Candax Energy to help the country expand its operations in Tunisia. In addition to the IFC investment, certain Candax’s directors and senior management will personally invest approximately two million U.S. dollars into the project. The investment is intended to help Candax increase its oil production in Tunisia while strengthening the local communities and protecting the environment.

The IFC is the largest global development institution focused exclusively on the private sector, with U.S.$68 billion in assets as of 2011. The IFC’s investment in Tunisia is intended to advance Candax’s facilities in the country, especially those in the Robbana oil fields. Candax currently produces 320 barrels of oil per day in Tunisia, but production is projected to increase to 700 per day by the end of 2012 with the proposed investment. The increased production will produce benefits for Tunisian citizens. The oil fields in question are considered marginal, meaning that the amount of easily accessible oil is relatively low and without the proposed investments, extraction at these fields would soon decline significantly, possibly leading to their complete abandonment within the next few years. Candax also hopes the investment will result in the future creation of managerial and oil development positions that will be staffed by Tunisian citizens. However, at the current time, the amount and exact nature of the managerial and development positions are unclear.

Additionally, the IFC will help Candax implement policies and programs intended to minimize the project’s harm to the environment, such as developing methods to safely dispose of water contaminated during oil extraction. Additional IFC funds will be used to create a public consultation and disclosure plan intended to gather input and warn the local community of any potential harms. The investment will also serve to reassure the international community that Tunisia is a safe place to invest, especially considering the instability surrounding the political revolution that started in 2010 and the unknown policies of the recently elected democratic government.

In 2010, the GDP per capita in Tunisia was $9,400 U.S. (as opposed to $47,200 in the United States) and the unemployment rate was 13%. The Candax expansion will hopefully result in both increased economic activity, which will result in increased per capita GDP and reduced unemployment. IFC’s other projects in Tunisia also further these goals by improving the country’s infrastructure and education system, and increasing the availability of credit to start small businesses. The IFC believes the recent investment in Candax, along with its other current projects, will improve the lives of Tunisian citizens.

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