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simultaneously with the share transfer on the environment,” said Ihsan Abdul Jabbar Ismail, Iraq is endowed with significant reserves
closing date determined as 30 June 2021 at Minister of Oil for Iraq. “This loan opens new of natural gas, mainly produced as a
the latest, and to take all necessary actions horizons for cooperation and collaboration byproduct of legacy oil extraction. However,
regarding the share transfer. that serve common purposes and interests, in the absence of adequate infrastructure to
However, due to the effect of the pandemic reiterating Iraq’s commitment to increasing capture and process it, about 70 percent of all
(global epidemic) that continues to affect the investment in associated gas flaring reduction natural gas produced in the country is flared.
whole world and the negative developments and to achieving the objectives set by the Paris Capturing associated gas for subsequent use
in the markets, and due to the fact that the Agreement.” can help Iraq reduce overall emissions.
project completion date has not yet been “We are delighted to have successfully The project benefits from long-standing
realized under the financing contracts of signed this loan with IFC, the first loan engagements of the World Bank Group in
STAR, it was considered that it would be facility of its kind in the energy sector in Iraq’s energy sector. Iraq joined the Global
appropriate to postpone the closing date until Iraq - “ a milestone to be proud of,” said Gas Flaring Reduction initiative in 2011 and
03.01.2022 at the latest. The Agreement has Malcolm Mayes, BGC Managing Director. committed in 2013 to eliminate all routine
been amended in this direction by reaching “The agreement demonstrates the strength natural gas flaring by 2030.
an agreement with SOCAR Turkey regarding of Iraqi companies and their ability to attract BGC is a 25-year incorporated Joint
the issue.” funding and trust from international banks. Venture between Iraq’s South Gas Company
DUNYA The intent of this five-year loan is to support holding 51%, Shell 44% and Mitsubishi
BGC’s growth project and turn the otherwise Corporation 5%. Average yearly production
IFC provides loan to reduce wasted flared gas into much needed energy is 900mmscf/d, this is enough gas to produce
for the country. Our strategy is in alignment
approximately 3.4GW of electricity for
gas flaring in Iraq with the government of Iraq’s vision to power millions of homes and industries in Iraq. BGC
currently captures around 60% of the available
Iraqi homes with electricity and create a more
IFC is investing in Basrah Gas Co. (BGC) sustainable energy industry.” gas from three Basrah oil fields: Rumaila, West
to support one of the largest gas flaring “This pioneering project has the potential Qurna 1 and Zubair.
reduction projects in the world, helping to to deliver significant environmental and BGC is the main gas gathering and
improve energy access, prevent associated economic benefits, including lower GHG processing entity in southern Iraq, making
greenhouse gas (GHG) emissions and support emissions and increased fiscal revenues, and it the main hub for processing associated
a more resilient, sustainable energy sector in will improve energy access and lower costs gas and the most competitive source of
Iraq. for Iraqi citizens,” said Sergio Pimenta, IFC hydrocarbons for power generation. In
BGC is an Iraqi joint venture created to Vice President for the Middle East and Africa. addition, BGC currently provides 80% of
treat and process associated gas that would “The project comes after years of hard work Iraq’s LPG demand, At the same time, by
otherwise be flared. and strong cooperation by all parties involved. developing of its export capabilities, for its
The project is expected to increase BGC’s We hope that it will send a strong signal to access production, BGC is also supporting
processing capacity, thereby avoiding more other investors and help drive more private Iraq to diversify its revenue streams by
unnecessary flaring and associated GHG investments to tackle climate change and turning Iraq into a net exporter of LPG and
emissions by around 10 million tons per support inclusive growth in Iraq.” Condensate.
annum. It will support Iraq’s transition to a IFC’s investment comprises a $137.76 Since commencement of operations in
lower carbon path and improve access to a million loan for IFC’s own account, a $180 2013 to end of 2020 – BGC has prevented
domestic energy source, helping the country million loan in which participations were over 107 million tons of CO2e emissions
meet its growing power needs. syndicated to eight international banks (Bank from entering the atmosphere. BGC has used
IFC, a member of the World Bank Group, of China, Citi, Deutsche Bank AG, Industrial the previously flared gas to replace existing
is the lead arranger of the five-year, $360 Commercial Bank of China, Natixis, energy sources, greatly reducing Iraq’s overall
million loan to BGC. Sumitomo Mitsui Banking Corporation, greenhouse gas (GHG) emissions. This is
“Signing the loan agreement reinforces Societe Generale and Standard Chartered equivalent to reducing CO2e emitted from 3.5
the collective efforts to increase investment Bank), and a $42.24 million loan through average coal-fired power stations operating
in associated gas flaring reduction using IFC’s Managed Co-Lending Portfolio continuously through the same period or
world-class technologies. It is in line with our Program, a platform that allows institutional removing 2.9 million cars off the road for the
objectives of turning flared gas into cleaner investors to participate in IFC’s loan portfolio. 8-year period (2013 to end of 2020).
valuable energy and reducing the impact The loan is without recourse to or guarantees IFC
of the Green House Gas emissions on the from any of the shareholders.

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