February 7, 2006
The World Bank has suspended all loans to Chad, saying the African country’s government had breached an agreement over oil revenue controls.
Bank president Paul Wolfowitz announced the move, one of the most drastic the bank can take against a member country.
He accused Chad’s government of acting “unilaterally” after it voted to relax controls on the use of its oil profits.
The bank had lent Chad more than $39m (£23m) on condition that non-government groups checked its use of oil revenues.
The private sector arm of the World Bank, the International Finance Corporation, also lent another $100m and mobilised a further $300m for the pipeline.
BBC NEWS | Business | World Bank suspends loans to Chad
December 31, 2005
Chad has reacted angrily to warnings from the World Bank, after its parliament voted to relax controls on the use of its oil revenues.
The government has accused the World Bank of acting like a coloniser.
The body lent Chad more than $39m (£23m) to build a pipeline with an estimated total cost of almost $4bn.
It was on condition that Chad’s churches, trade unions and non-governmental organisations monitored how oil revenues were spent.
This was meant to guaranteed that oil money was used to help reduce poverty in Chad but the new laws would give Chad more control over the money.
The bank has warned if Chad breaks its agreement, that is a breach of contract. Further funds will be halted, and repayment rates on the current loan increased.
World Bank President Paul Wolfowitz said the law was a deciding factor in the bank’s financial support for the massive pipeline project in 1999.
BBC NEWS | Business | Chad angry at World Bank over oil