The project sponsor is Sasol. Based in Johannesburg, South Africa, Sasol is a world leader in the commercial production of liquid fuels and chemicals from coal and crude oil. The Sasol Group generated total sales of approximately $6 billion for FY 2002 and is the fifth-largest listed South African company, with a market capitalization in excess of $5 billion. In FY 2002, more than 50% of the operating profit was derived from the synthetic fuels business, 25% from the chemical business, 12% from the crude oil activities and the remainder from Sasol’s mining and other activities. Sasol employs more than 30,000 people. Sasol was founded in 1950 and became a private sector company when it was listed on the Johannesburg Stock Exchange in 1979. It is also listed on the NASDAQ Stock Exchange. Sasol has been rated BBB for its long-term foreign currency debt, one notch higher than the sovereign rating for South Africa.
The project will be implemented by an UJV comprising the following parties: Sasol (70%), CMH, an ENH subsidiary (25%) and IFC (5%).

The project cost for the first phase of the upstream project is estimated to be $220million. The proposed IFC investment is an equity of up to $18.5 million.

18.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	18.50

* These investment figures are indicative

The gas fields and the processing facilities will be located in the Inhambane province in Mozambique. Natural gas will be transported by a 890 km pipeline to Secunda in South Africa.

This is a category A project according to IFC’s Environmental and Social Review Procedure. Environmental, social, health and safety issues associated with this project during construction and/or operations may include: endangered species; air emissions, including cumulative effects of this project and other actual and/or proposed projects; contamination of the proposed site from current or past oil and gas operations; liquid and solid waste disposal; noise from construction of all of the facilities and operation processing plant; global issues related to climate change; fire protection; emergency response; impact on culturally sensitive properties such as artifacts; resettlement of people or loss of land and other economic assets caused by land acquisition or access impediments.
Location of environmental documents in locally affected community
The complete set of Category A documentation is available locally at the following locations: Mozambique - World Bank offices in Maputo - Consulting firm Impacto Lda. Maputo - Ministry for the Coordination of Environmental Affairs National Department – Mozambique (MICOA), Maputo, Xai Xai, Inhambane, Matola - Directo Nacional de Carvao e Hidrocarbonetos (DNCH), Maputo - Sasol Temane Lda offices, Maputo - Municipal Office, Matola, Inhassoro, Vilanculos - Governors Office, Maputo, Xai Xai, Inhambane - District Administrators Office, Vilanculos, Inhassoro, Funhaloro, Mabote, Chowkwé, Moamba, Maputo, Vilanculos - Public libraries, Maputo, Matola South Africa - Public libraries, Bethal, Badplaas, Barberton, Kanyamazane, Komatipoort, Malelane, Nelspruit - Mark Wood Environmental Consultants, Honeydew, Johannesburg - Sasol Petroleum International (Pty) ltd., Rosebank Johannesburg - Sasol Technology (Pty) Ltd., Secunda In addition the documentation can be accessed from the Sasol Natural Gas Project Website http://w3.sasol.com/natural_gas/

The project will contribute to the development of Mozambique as evidenced by a over 20% economic rate of return (ERR). It will generate significant benefits in the form of royalties, taxes and profit share over its life (25 years). It will also generate significant employment during construction and a number of permanent jobs afterwards. Moreover, the share of gas received as royalty and the development of a proposed spur line to Maputo will lay the foundation for a domestic gas market which could lead to the development of a number of gas using industries that would add to the manufacturing base and export receipts of the country. Finally, coming on the heels of the Mozal development, the project will reinforce investors' image of Mozambique as an attractive place for business development that can benefit from its resources and location. IFC, as a member of the World Bank Group, is playing a number of important roles in this project. Firstly, along with MIGA and the PRG, IFC participation is seen as an important political risk mitigant by both Sasol and ENH. Secondly, Mozambican equity participation is important for both parties. In the absence of strong Mozambican private sector partners, ENH has to play this role. ENH has limited resources and IFC participation through a farm-in will reduce its “equity burden.” Thirdly, ENH sees IFC’s participation in the operating committee of the upstream development as a critical support to Mozambique during the period it builds up its own capacity. Fourthly, In line with GoM’s request, IFC is helping to increase local participation in this project. Fifthly, IFC is working with Gigajoule Africa, which is developing a Mozambican gas distribution company in partnership with ENH and other Mozambican investors, to examine the use of carbon credits in order to improve the commercial performance of the project. Finally, IFC is working jointly with the WB to ensure that the project is built and operated to high environmental and social standards.