1. OPIM 5894 ADVANCED PROJECT MANAGEMENT CHAD CAMEROON PIPELINE CASE Team 1 http://users.business.uconn.edu/snair/opim5894.html

2. Chad Cameroon Pipeline case  Why do you think the financing of the Field System is using equity and the Export System using debt? - Field System is the primary asset. - Develop asset allows for collateral for future financing. - Export System is the cost-effective transportation method. - Alternate method of transportation could be developed if needed (sample: Cameroon). - Primarily being funded by the Government. Prof. Suresh Nair, University of Connecticut

3. Chad Cameroon Pipeline case  Analyze the risks and returns to Chad, Cameroon and the Private Sponsors (Exhibits 4a, 4b)? - Chad and Cameroon have low financial risks. - Chad and Cameroon have high social environmental risks. - Private Sponsors have substantial financial risks but are capped. Prof. Suresh Nair, University of Connecticut

4. Chad Cameroon Pipeline case  How were the returns calculated? - Based of projected production volumes and estimated price/barrel. - Host countries have fixed incomes based on royalty and pipeline taxes.  Are the risks and returns fair from each party’s perspective? - Private Sponsors and host countries – Returns are in line with risks. - IFC is in line with mission statement but not financial calculations. Prof. Suresh Nair, University of Connecticut

5. Chad Cameroon Pipeline case  What is the World Bank/IFC’s role in this deal? - Alleviate poverty in undeveloped countries. - Bridge gap between high-risk projects in private investors by mitigating risk. - Experience dealing with governments specifically with economic development projects.  Are they likely to be successful? - Generally successful (70% of projects achieve their objectives with an average return of 22%). Prof. Suresh Nair, University of Connecticut

6. Chad Cameroon Pipeline case  Will the Revenue Management Plan work? - No. - High risk of corruption after disbursement of funds. - Governments have the opportunity to reallocate revenue after five years. - Inexperienced oversight of committee government and Chadian government. Prof. Suresh Nair, University of Connecticut

7. Chad Cameroon Pipeline case  Are there aspects of the plan that you think should be changed? - Funds need to be managed from start to finish by the IFC - Small-phased disbursement amounts for specific developed projects. - Change allocation revenue to a ten-year cycle. - Cap percentage change of allocations. - Add board member oversight by NGO sponsor. - Add subpoena and reporting power. Prof. Suresh Nair, University of Connecticut

8. Chad Cameroon Pipeline case  Would you approve the deal as a World Bank/IFC board member? - Based on changes, YES. Prof. Suresh Nair, University of Connecticut