The International Finance Corp (IFC), the World Bank’s private sector lender, said on Wednesday it will grant a $50 million loan to Kuwait Energy Company (KEC) to support the firm’s oil discoveries in Egypt and to help the company conduct additional explorations in Yemen, Reuters reports. Egypt and Yemen have suffered sluggish oil production rates in recent years. The World Bank hopes the loan will increase oil and gas production, in addition to providing additional jobs and government revenues to both countries.
“This transaction provides a unique opportunity for IFC to support a new class of local private oil and gas companies in the Middle East and North Africa that are expanding regionally and providing valuable jobs and revenues to governments,” Lance Crist, IFC's Global Head for Oil and Gas, told Reuters.
The IFC financing package includes a $35 million reserve-based facility in addition to a $15 million income participation facility that uses a Murabaha structure common in Islamic finance transactions. Kuwait Energy Company (KEC), established in August 2005, is an independent oil and gas exploration and production company with operations in the Middle East, North Africa, Eastern Europe and Asia. The firm is on track to go public in 2010.
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