Brazil-Bolivia Pipeline

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MIGA insured El Paso Energy International Company for its investment in one of the largest foreign investments in Latin America. The project involves the construction and operation of a 3,150 kilometer natural gas pipeline from Santa Cruz (Bolivia) to Porto Alegre (Brazil). MIGA's $14.6 million guarantee covers the investment against the risks of transfer restriction, expropriation, and war and civil disturbance. The expropriation coverage protects El Paso's investment against actions by either government that would affect the project enterprise in either country. The project will help to diversity the energy supply in Brazil and will provide direct economic benefits to the Bolivian economy through increased investment in upstream gas exploration and production activities. The pipeline is expected to boost Bolivia's annual income by approximately $400 million. The direct beneficiaries of the project will be the local population in southern Brazil, who will benefit from the substitute of natural gas for more polluting fuels. The project will provide a significant increase in the supply and demand of natural gas at competitive prices in Brazil. Training will be provided on compressor and turbine operations, and on operation of a sophisticated electronic system to monitor the pipeline's performance. Training will be also be provided on the use of modern equipment and computers, and management and marketing. Approximately 80 percent ($1.3 billion) of the goods and services will be purchased in Brazil. Besides MIGA, there is significant multilateral presence in this project. A World Bank loan for $130 million and a $180 million partial-credit guarantee are being extended to the Brazilian portion of the project. The Inter-American Development Bank is also financing the Brazilian side with a $240 million loan.

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