Friday, June 15, 2012 -
The World Bank said Thursday it has extended a $119.5 million investment guarantee on a deal between Uzbekistan and Lukoil that is expected to spur the economy of the Central Asian state.
The World Bank guarantee secures Uzbekistan’s first project finance deal to develop a gas field with the support of a consortium of international banks.
"We have witnessed first-hand the attention this project has received, mainly for its ability to enable a consortium of international banks to provide project finance in Uzbekistan for the first time," said Abir Burgul, senior underwriter of the World Bank’s political risk insurance arm Multilateral Investment Guarantee Agency, in the MIGA statement.
Joint venture Lukoil Overseas Uzbekistan Ltd will spend the financing on developing the Khauzak-Shady Block and the Kandym Field Group, two significant natural gas prospects.
The deal provides a needed boost for Uzbekistan’s reputation to attract foreign investments.
"Without multilateral organizations' involvement in this project, we would have been hard-pressed to find financing,” admitted a senior financial officer at Lukoil.
BNP Paribas (Suisse), which acted as an agent for the consortium of banks, said the commercial banks would not have backed the project without the political risk insurance from MIGA.