The Sponsor of the Project is Orca Exploration Group Inc. (“Orca”, or the “Company”), a publicly listed company whose shares are traded on the TSX Venture Exchange (TSXV), in Canada, under the trading symbols ORC.B and ORC.A. Orca has a registered office in the British Virgin Islands. Its active subsidiaries with respect to its Tanzanian operations are PAE PanAfrican Energy Corporation (“PAE”), incorporated in Mauritius, and PanAfrican Energy Tanzania Limited (“PAET”), incorporated in Jersey, both of which are wholly owned subsidiaries.

Due to its dual-class share listing, economic and voting ownership in Orca varies among shareholders depending on the class of share held. As of 28 January 2015, W. David Lyons, Chairman and CEO, held an approximate 20.6% equity interest and a 59.2% voting interest in Orca, with the next largest shareholder, Trapeze Asset Management Inc., holding an approximate 14.2% equity interest and a 7.3% voting ownership, followed by Lloyd I. Miller III who holds an approximate 11.5% equity interest and a 5.9% voting interest in Orca. As of that date, to the knowledge of the Company, no other shareholders held more than a 2% equity or voting interest in the Sponsor.

Orca Exploration Group and its predecessor and associated companies have been involved in oil and gas projects in Africa for almost three decades. In Tanzania, work to develop the Songo Songo field began in 1991 when an agreement was signed by the predecessor company, Ocelot International Inc., with the Tanzanian Petroleum Development Corporation (“TPDC”). In August 2004 the Songo Songo assets were spun out as a separate publicly listed company, EastCoast Energy Corporation, which company’s share structure and ownership on the spinout mirrored that of the parent company. In November 2006 EastCoast Energy shareholders approved a name change to Orca Exploration Group Inc. and trading of the company shares on the TSXV as Orca Exploration commenced on 4 April 2007.

The total cost of the Project is estimated at up to approximately US$120 million.

IFC proposes to provide PAET an equity and/or quasi-equity investment of up to US$60 million, with the balance of the Project cost to be funded from cash and internal cash generation.

100.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	85.0
Equity	15.0

* These investment figures are indicative

The Songo Songo gas field is located onshore and offshore Songo Songo Island, approximately 20 km off the main coast of Tanzania and 200 km south of the principal city of Dar es Salaam.

The Project is expected to:

(i) support the development of indigenous natural gas resources to produce least-cost power generation for industrial use and in line with Tanzania''s comparative resource advantage;

(ii) increase the competitiveness of industrial enterprises by providing greater access to a cheaper and more reliable source of electricity;

(iii) provide a foundation for the expansion of existing gas fired power plants as well as support the future construction of greenfield facilities that will alleviate Tanzania''s forecast power shortages and underpin future economic growth;

(iv) support the continued development of a commercial domestic market and infrastructure for natural gas;

(v) displace more expensive and polluting fuel sources such as fuel oil and diesel, thus reducing the cost of electricity while simultaneously mitigating the potential for greater greenhouse gas emissions;

(vi) reduce the dependency on indigenous charcoal and the associated de-forestation related to charcoal production; and

(vii) help increase Tanzania''s energy supply stability by diversifying the energy mix of Tanzania''s power generation sector away from its reliance on weather dependent hydroelectric generation and expensive liquid fuels, towards a higher proportion of gas fired generation, which is inherently more reliable, cost effective and can respond more flexibly to changing power demand.

The Sponsor has agreed to make Project payments to Government of Tanzania public, as well as contracts or key contract terms.

Revenues generated under the Project will be subject to a Production Sharing Agreement (PSA) signed in 2001 between the Government of Tanzania, Tanzania Petroleum Development Corporation (TPDC) and PAET, which agreement provides PAET the right to develop, produce, market and sell natural gas from Songo Songo and clearly defines the treatment of proceeds from the sale of hydrocarbons, and the key terms of which are provided in Orca’s annual and quarterly financial statements. The entire PSA has been disclosed to the public since 2006 pursuant to Canadian securities regulations, and a copy of the PSA is available on the Company’s website. All revenues and costs associated with the Project will be contained within the audited annual and unaudited quarterly financial statements of the Company released to the public in accordance with statues and regulations concerning publicly listed companies in Canada. Additionally, Orca will make all other requisite public disclosures required of a company publicly listed in Canada.

IFC''s expected role and additionality in the Project include: (i) the provision of environmental and social expertise to ensure compliance with IFC''s Performance Standards; and (ii) coordinating efforts between Orca/PAET, the Government of Tanzania and the International Bank for Reconstruction and Development (IBRD) to build a sustainable framework for Tanzania''s energy sector and support the financial viability of the sector''s institutions.

IFC’s appraisal considered environmental and social management plans for the Project and gaps if any between these plans and IFC requirements. Where necessary corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in the agreed Environmental and Social Action Plan (ESAP). Through implementation of these management plans and the ESAP the Project is expected to be designed and operated in accordance with Performance Standards objectives.



The proposed project is essentially an expansion of existing gas production, and the marginal environmental and social risks and impacts of the expansion are not significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.