Guidance Note: EITI Requirement 4.3
Infrastructure provisions and barter arrangements
|This guidance note refers to the 2019 EITI Standard.|
Resource-rich countries that have limited access to capital and credit, but high needs for infrastructure development, often consider “package deals” to develop their infrastructure in exchange for their natural resources. The resources pledged by the state may include exploration or production rights for oil, gas and minerals, as well as access to land, energy and water resources or the future delivery of extractives commodities. The resources brought by the investor may include loans, grants and infrastructure works, such as railways, roads, ports, power plants, schools and hospitals.
These agreements are often referred to as “infrastructure provisions”, “barter agreements”, “resource financed infrastructure” or “resource-backed loans”. Such agreements may be governed by government-to-government agreements accompanied by complex supporting agreements and involving a number of state-owned enterprises (SOEs) or private sector entities.
The terms of these agreements and corresponding value transfers may be complex, opaque and difficult to oversee, making them vulnerable to corruption. In some countries, the values involved may represent a significant amount of the total extractives revenues accruing to government. They may also have an impact on a country’s debt sustainability, in particular during commodity price downturns.
Requirement 4.3 of the EITI Standard requires that these types of infrastructure provisions and barter arrangements be publicly and comprehensively addressed when material, providing a level of detail and transparency commensurate with the disclosure and reconciliation of other payments and revenues streams.
This note provides guidance to multi-stakeholder groups (MSGs) on how to report on such deals as part of EITI implementation, presents a set of examples from implementing countries and outlines opportunities to strengthen the dissemination and use of data.