Boosted by new discoveries made of gas reserves in Calub, Hilala and Shilabo areas, the Federal Democratic Republic of Ethiopia has embarked on the plan to develop and produce natural gas for domestic use and export (the “Project”). Accordingly, the government has been negotiating various agreements with contractors in order to start the Project. As natural gas development and production is a new field in Ethiopia, the government approached the African Legal Support Facility (“ALSF” or “Facility”) for advisory services and capacity building support in order to negotiate the Gas Sale Purchase Agreement, to safeguard the interest of the country and its people.
Natural gas was discovered some forty years ago in Ethiopia. Although many companies have conducted exploration work, the reserves remain undeveloped till now, and the people and the government are yet to benefit from it. Thus, the expectations are very high as the country is spending more than 3 Billion USD annually to import petroleum products. However, if developed, export earnings from the natural gas project would surely alleviate some of the burden on the country’s foreign currency reserve.
The objective of the assistance provided by the ALSF is to support the Government of the Federal Democratic Republic of Ethiopia to negotiate a fair and balanced Gas Sale Purchase Agreement.
About the ALSF
Created by the African Development Bank in 2010, the ALSF supports governments in negotiating complex commercial transactions, providing legal and technical assistance in public-private partnership projects across the oil and gas, mining and energy sectors, and covering sovereign debt issues and creditor litigation.
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