Burkina Faso has a need for infrastructure projects such as energy and transportation. Public private partnerships (PPPs) are an attractive model being used for projects like solar plants and airports. The legal framework for PPPs includes a 2013 law and decrees that establish rules for selecting private partners through competitive bidding or direct negotiation in certain cases. Key government agencies oversee PPP projects and an annual program identifies priority projects. Several large solar and airport projects are currently underway through PPP agreements.
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The main goal of the Public-Private Partnership is the development of infrastructure in the public interests via the combination of resources and experiences of the government and business, and implementation of
socially significant projects with minimum expenditures and risks while still providing services of high quality to economic subjects.
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Doing Business in Africa: M&A - background and trends. M&A in the Africa market is increasingly active with a number of stakeholders trying to enter the continent and develop business or acquire market shares. This session will provide an overview of the market with facts, figures, trends and challenges to conduct transactions. In addition, the session will provide some key hints and tips in order to complete transactions in the African environment and present some of the main players.
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The Finance Minister read out the longest ever budget speech. By the end of it she was too exhausted to even complete the speech. This pretty much explains the state of affairs.
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The positive take away from the budget statement is that the aspirations are really high and the vision of new modern India very clear. The government for the first time made an unambiguous admission that the way forward is a progressive socio-economic structure that is egalitarian but encourages and supports private enterprise. It is a major achievement to officially abandon the socialist legacy that focused on curbing demand rather than enhancing supply and hindered the seamless integration of Indian economy in the global economy.
Doing Business in Africa: M&A - background and trends. M&A in the Africa market is increasingly active with a number of stakeholders trying to enter the continent and develop business or acquire market shares. This session will provide an overview of the market with facts, figures, trends and challenges to conduct transactions. In addition, the session will provide some key hints and tips in order to complete transactions in the African environment and present some of the main players.
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Economic growth in Africa remains strong with growth of 5% in 2013. At least a third of countries in the region are growing at 6% and more, and African countries are now routinely among the fastest-growing countries in the world. Yet for businesses seeking to expand into or operate on the Continent and their legal advisers, there remain serious challenges to success. So how can we all make the most of this continent of opportunity and challenges?
Focussing particularly on recent developments, legal harmonization, opportunities and day to day issues in the legal world in Africa, the session will provide an insight into the potential challenges that lawyers may find when working with clients or on transactions or litigations in Africa and suggest some ways to mitigate the risks. Covering a range of topics such political risk, corruption, the importance of trust and relationship-building and the different pace of working, the webinar will provide a unique insight into working in Africa and present our unique offering on the continent.
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2. ii
The African continent has a diverse need for infrastructure, due to a rich
blend of economies at various stages of development.
Whilst there are many platforms for growth, Public Private Partnerships (PPPs)
are an increasingly attractive model which, when deployed correctly, can bring
significant benefits to the population.
With our proven track record advising on PPPs in Africa, we understand
that there are many factors which must be considered and navigated before
a project can successfully meet its objectives.
Through this guide, we provide an insight to some of the key elements
needed to successfully deliver a PPP in selected countries on the continent.
We are determined to being part of Africa’s development in the coming decade.
To find more about the Eversheds Africa Group, please visit our website.
The Eversheds Africa Law Institute
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.
All information in this document is up to date as of Summer 2016.
3. A guide to PPP in Africa
Angola 2
Burkina Faso 5
Cameroon 9
Côte d’Ivoire (Ivory Coast) 13
Egypt 18
Ethiopia 22
Ghana 24
Kenya 28
Madagascar 31
Mali 34
Mauritius 37
Mozambique 40
Niger 44
Nigeria 49
Senegal 53
South Africa 57
Tanzania 60
Tunisia 62
Uganda 66
Zimbabwe 69
EALI members 72
Contents
1
Data supplied by Analyse Africa, a digital database service from the Financial
Times providing indicators to analyse, evaluate and spot opportunities in Africa
4. 2
A guide to PPP in Africa
Key statistics
Area
1,246,700 sq.km (2014
Population
21.4 million (2013)
GDP
US$124.2 billion (2013)
GDP per capita
US$7,736 (2013)
GDP growth
6.8% (2013)
Infrastructure Landscape and Context
Key players
CMAPP: the Ministerial Commission for the Evaluation of PPPs
is responsible for the approval of projects, preparation of a
procedural manual and guidance on the procurement process. It is
comprised of the Ministers of Economy, Finance and Planning plus
the relevant Minister for the type of PPP project being considered.
PPP Unit: the body mandated to attract private financing and
ensure the fiscal sustainability of projects, which sits within the
Ministry of Economy.
Executive: the Governmental Executive that provides final
approval on projects being commissioned and signed.
Ministers: in each sector, Ministers will be responsible for
delivering projects in accordance with guidance provided by the
CMAPP.
Needs of the region
A range of core and social infrastructure, including the provision
of adequate water and electricity through to new transport.
Legal and Regulatory Framework
Law
On 14 January 2011, the Angolan parliament adopted the Law
on public-private partnerships (Lei no. 2/11 de 14 de Janeiro: Lei
Sobre as Parcerias Público-Privadas). It provides for a number of
controls, facilitates the implementation of PPPs and establishes
management of such projects at a lower cost.
Guidance
All PPPs must be aligned with the General Plan for Public-Private
Partnerships, a cross-government department plan for the delivery
of projects of strategic importance.
Budget
The relevant project must be included in the State General Budget
Law for it to be considered for approval.
Please note that there is a prohibition on external advisers assisting
the private partner during the procurement process.
Angola
FCB&A – EVC Advogados
5. 3
A guide to PPP in Africa
PPP Process
Process
The PPP law describes the process for the preparation of the
project and the studies and documentation that need to be in
place to support the project. The package will be prepared by
the responsible Minister for the project. The CMAPP will then
evaluate the project based on the information and documentation
received. The CMAPP determines when a project can be launched
for tender, in which case the responsible Minister can start with
the selection of the private partner(s) and the negotiation of the
terms of the partnership. The CMAPP can, upon proposal of the
responsible Minister, decide to suspend or cancel the process
if the results of the negotiations are not in line with the public
interests that the partnership is intended to serve. The process
will also stop if only one candidate partner is available, unless the
CMAPP expressly decides otherwise.
Special purpose company
Before the partnership contract can be entered into, a special
purpose entity will need to be established. The purpose of the entity,
which can in principle be any of the commercial legal entities that
are available under applicable Angolan law, will be entrusted with
the implementation and management of the project. If the income
of the special purpose entity exceeds an amount established by
the CMAPP, it must be established in the form of a public limited
company (sociedade anónimia). This company may then also issue
(listed) securities in the national and international capital markets.
If the company’s income exceeds thresholds determined by the
CMAPP, it will be obliged to report under IFRS.
Contract execution
Once the successful bidder is selected and the contract
negotiations are approved by the Audit Court (Tribunal das
Contas), the CMAPP will submit the project file to the Executive for
approval. After this approval has been obtained, the contract can
be signed on behalf of the State by the Minister of Economy, the
Minister of Finance and the Minister responsible for the sector to
which the project relates.
Ongoing PPP Projects
1. Biomass power generation
Year: Proposed
Capital Value: To be confirmed
Sector: Energy
Details: New power plant consisting of eucalyptus biomass and
hydroelectric plants of small and medium sizes in the Central
Highlands of Angola, providing 500MW of energy which will
deliver a 50% increase in the country’s power output.
2. Luanda Waterfront Development
Year: 2010
Capital Value: To be confirmed
Sector: Wastewater
Details: A 30-month project between the Government of Angola
and Sociedade Baia de Luanda for the provision of the washing
and treating of 600,000 tons of polluted sand and silt, and the
construction of a wastewater system.
6. 4
A guide to PPP in Africa
3. Porto de Caio development
Year: 2014
Capital Value: US$60 million
Sector: Ports
Details: The development of a deep water port for improving
logistics and the import/export capacity of the country. The
project is being delivered in a three-phase plan.
Obstacles / Challenges
1. The PPP law does not specify the sectors or regions in which
PPPs should be implemented. However, in light of policies that
have been implemented in Angola, it is our opinion that such
law must be analysed along with the New Angolan Private
Investment
–– infrastructures
–– energy/electricity;
–– wastewater treatment and water supply;
–– sanitation, and
–– waste management.
2. The main purpose of a PPP is to make sure that the public
interest that underpinned the political decision to create that
PPP is achieved. By way of example, PPPs may be created
by means of one of the following types of contractual
instruments:
–– public works concession contracts
–– public service concession contracts, and
–– continuing supply contracts.
3. Under the PPP law, the public partner is mandatorily obliged to
monitor and control the execution of the partnership, in order
to guarantee that the public interest motivations underlying
the PPP are being fulfilled.
4. PPPs must be renegotiated when a significant change occurs
in the financial conditions that were initially set for the
development of the partnership.
5. Unilateral modifications may be imposed by the public sector
in relation to the private partner´s contractual obligations or
regarding the essential conditions of the development of the
partnership.
6. Additionally, the public sector is legally entitled to an equal
share of the financial benefits that arise from the PPP, during
a set period of time. Such right is extended to the benefits
arising from possible improvements on the financing
conditions of the PPPs (for example, in the event of the
renegotiation of the financing agreements for the PPP).
7. As regards the operating risk of PPPs in Angola, it should be
highlighted that the country is a member of the Multilateral
Investment Guarantee Agency (MIGA), which may provide
assistance for dispute settlement as part of its political risk
insurance products.
8. However, it should also be stressed that Angola is not a party
to (i) the United Nations New York convention, (ii) the World
Bank’s International Centre for Settlement of Investment
Disputes (ICSID), nor to (iii) the United Nations Conventions
on the International Sale of Goods (CISG). As such, difficulties
may arise for a private partner in the eventof a dispute with
the Angolan Government, namely making it difficult to access
international protection.
7. 5
A guide to PPP in Africa
Burkina Faso
Cabinet Sagnon-Zagre
Infrastructure Landscape and Context
Key statistics
Area
274 200 km²
Population
16.93 million (2013)
GDP
US$12.54 million (2014)
GDP per capita
US$530.82 (2014)
GDP growth
4.20% in the 3rd quarter
of 2015
Number of projects ongoing
120 projects with total value of almost US$20 billion.
Key players
The Presidential Board of Investment: created under decree
2007-739/PRES of 6 December 2007. The Board is responsible for
giving recommendations on the promotion and development of
private, public, national and foreign investments in Burkina Faso.
The public-private partnership Commission: it is responsible
for making all proposals that fall under law 020-2013/AN of
23 May 2013 – the legal framework governing public-private
partnerships and the implementation of PPP projects in Burkina
Faso – to the Board of Ministers.
The directorate-general of procurement contracts: it validates
the procurement process in advance of its occurence.
Needs of the region
Energy and infrastructure.
The Public Procurement Regulatory Authority, a service under
the Prime Minister that defines Public procurement policies.
The Directorate for the promotion of public-private
partnerships, it is in charge of the establishment of the PPP’s
annual programme of work.
The General Directorate responsible for monitoring public
procurements and financial commitments: it controls at first
sight the public procurement procedures including the public
service delegation contract (PSD).
8. 6
A guide to PPP in Africa
Legal and Regulatory Framework
The relevant regulations include:
–– Art. 101, al.2 of the Constitution: “the law states the main
principles to govern the preparation, carrying out and follow-up
of national development programmes“.
–– “Strategy for accelerated growth and sustainable development
in 2011-2015” (SCADD), 2010. This document sets out the short,
medium and long-term strategic approaches for economic and
social development in Burkina Faso.
For public service delegations
–– Decree 2008-173 PRES/PM/MEF of 16 April 2008, providing
general regulations for procurement contracts and public
service delegations in Burkina Faso.
–– Decree 2012-123 PRES/PM/MEF of 2 2012, which amends
decree 2008-173 PRES/PM/MEF of 16 April 2008, providing
general regulations for procurement contracts and public
service delegations in Burkina Faso.
–– Order 04/2005/CM/UEMOA on the procurement process
and the implementation and management of procurement
contracts and public service delegations in the West African
Economic and Monetary Union (UEMOA).
–– Order 05/2005/CM/UEMOA on the control and regulation of
procurement contracts and public service delegations in the
West African Economic and Monetary Union.
For partnership contracts
–– Law 020-2013/AN of 23 May providing the legal framework for
public-private procurement contracts and the context in which
PPP projects may be carried out in Burkina Faso.
–– Decree 2014-024/PRES/PM/MEF of 3 February , which states
how law 020-2013/AN of 23 May 2013 – providing the legal
framework for public-private procurement contracts in Burkina
Faso – is to be applied.
–– Decree 2014-628/PRES/PM/MEF of 29 July 2014 on the
creation, attributions, composition and function of the public-
private partnership Commission OJ 43 of 23 October 2014.
PPP contracts are defined as “contracts through which a public
authority makes a private partner responsible for all or part of the
following: for a defined period of time, determined according
to the duration of the repayment period for any investments or
funding arrangements made: planning works or the equipment
needed for public service; funding; building; transforming works
or equipment; care and maintenance; use or management; other
services provided as part of the public service mission”.
PPP Process
1. Process to be applied to public service delegation
Competition procedure
According to the provisional threshold amount obtained by the
delegation, the public call for competition must be made on a
national scale or throughout the UEMOA.
Irrespective of the threshold, candidates may be pre-qualified,
although this is not necessary.
2. The process to be applied to public-private partnerships
In theory, PPPs are to be used for projects falling under the PPP
programme adopted by the Board of Ministers.
Competition procedure
The private partner is selected through a national or international
call to competition, depending on the complexity or financial
scope of the project.
9. 7
A guide to PPP in Africa
The private partner is selected in a one or two-stage open call
for tender.
A pre-qualification process is carried out prior to the call for
tender. The public authority will enable each pre-qualified
candidate to borrow the tender dossier in order to prepare
their offer.
Non-competitive procedure
Under exceptional circumstances, subject to approval
from the Board of Ministers or the body considering state
dismemberments, the public authority is authorised to negotiate
a public-private partnership contract, without resorting to
competition, in the three strict cases described below:
–– in order to ensure the public service continues to run as a
matter of urgency; “this urgency must be brought about by
unforeseeable circumstances, independent of the will of the
public authority leading the project”;
–– when one single private entity is able to provide the service
requested, “for example, when intellectual property rights, trade
secrets or other exclusive rights must be exercised in order to
be able to provide the service”; or
–– should the pre-qualification process or call for tender fail
and should the publication of a new invitation to the pre-
qualification process or call for tender have proven fairly
unsuccessful in assigning the project within the desired period
of time.
Unsolicited proposals
A public authority may consider spontaneous proposals if they
do not involve projects for which a selection process has been
opened or announced. If the authority decides to carry out the
project proposed, it must launch a competitive call. In these
circumstances, the person who put forward the proposal will be
invited to participate in the selection process.
Ongoing PPP Projects
1. Solar plant in Zagtouli
Year: 2013 – present
Capital Value: US$79 million
Sector: Energy
Funding: The French Development Agency, the European Union
and the European Investment Bank and Burkina Faso
Details: The project consists of building a 33 MWc photovoltaic
solar plant in Zagtouli (near Ouagadougou). The development
contract is guaranteed by the National Electricity Company of
Burkina Faso (Sonabel).
2. Zina solar plant
Year: 2013 – present
Capital Value: US$50 million
Sector: Energy
Funding: The African Development Bank, Frontier Market, the
Emerging Africa Infrastructure Fund
Details: The Burkina Faso electricity company (Sonabel) signed an
agreement with the Canadian company Windiga Energie, in order
to build and use a 20 MWc photovoltaic solar plant in the province
of Mouhoun in Burkina Faso.
Alongside, Windiga Energie signed a purchase contract for such
production with Sonabel, on 17 October 2014, in order to ensure
distribution of the plant’s output.
This project will make Windiga Energie the leading independent
electricity producer in Burkina Faso.
The project will have a 25 year duration, by the end of which time
the plant will be transferred back to Burkina Faso at least 80%
capacity for one symbolic franc.
10. 8
A guide to PPP in Africa
3. The Donsin airport project
Year: Step 1 (2013-2018)
Capital Value: US$515 million
Sector: Airport
Funding: The state of Burkina Faso, the World Bank, BAD, BOAD, BID,
the Saudi development fund, the Kuwait development fund, BADEA
and the OPEC fund for international development, OFID.
Details: Ouagadougou airport in the city centre has been heavily
criticised, notably because it is impossible to extend. The government
of Burkina Faso has therefore decided to transfer all airport activity
to a platform located in Donsin, which is approximately 30km to the
north of the capital. The feasibility study has shown that the best way
of funding the airport construction is via a public-private partnership,
with strong involvement from the Burkina Faso state.
Obstacles / Challenges
“Strategy for accelerated growth and sustainable development in
2011-2015” (SCADD) made PPP a key driver of economic and social
development of Burkina Faso. Unfortunately the social and political
crises that shook the country in 2014 and 2015 have seriously
affected the implementation of the 31 PPP projects identified in the
programme.. Each project suffered a significant delay.
Sources
www.legiburkina.bf
www.egis.fr
www.diplomatie.gouv.fr
www.moad.bf
www.effectivecooperation.org
www.alpha.burkinafasoindia.org
www.afd.fr
www.burkina24.org
www.unece.org
11. 9
A guide to PPP in Africa
Key statistics
Area
475 440 km²
Population
22.25 million (2013)
GDP
US$29.57 million (2013)
GDP per capita
US$1,328.64 (2013)
GDP growth
5.6% (2013)
Infrastructure Landscape and Context
Cameroon
Ngassam, Fansi & Mouafo, Avocats Associés
Number of projects ongoing
Unknown.
Key players
Public procurement Minister: the key player of the public
procurement, in charge of the bidding process, the tendering and
the control of the effective implementation;
The Procurement Contract Regulation Agency: in charge of the
evaluation and the audit of procurements as well as the publication
of procurement notices;
The Support Council for the Realisation of Partnership
Contracts: in charge of the evaluation of the public-private
partnership projects.
12. 10
A guide to PPP in Africa
Legal and Regulatory Framework
1. On PPPs
The following legal and regulatory framework is relevant to PPPs
in Cameroon:
–– Law 2006/012 of 29 December 2006, which specifies the
general scheme to be applied to partnership contracts
–– Law 2008/009 of 16 July which specifies the fiscal, financial and
accounting schemes to be applied to partnership contracts
–– Decree 2008/0115 of 24 January 2008, which specifies how law
2006/012 of 29 December 2006 specifying the general regime
for partnership contracts is to be applied
–– Decree 2008/035 of 23 January 2008 on the organisation
and function of the Supporting Board for the implementation
of Partnership Contracts, which was amended by Decree
2012/148 of 21 March 2012
–– Decree 2012/148 of 21 March 2012, which amends and
completes certain provisions of decree 2008/035 of 23 January
2008 on the organisation and function of the Supporting Board
for the implementation of Partnership Contracts
–– Order 186/CAB/PM of 15 November 2011, which sets rates
and determines how costs incurred as a result of partnership
contracts are to be paid
–– Notification 004/CAB/MINEPAT of 25 February 2014, contains
a list of projects to be carried out under a public-private
partnership in fiscal year 2014.
2. On CSPs
The following framework is to be applied to CSPs in Cameroon:
–– Decree 2014/3863/PM 21 November 2014 on the organisation
of technical supervision for activities under way
–– Decree 2014/0611/PM of 24 March 2014, which specifies the
conditions under which approaches to high- intensity labour
may be used and applied
–– Decree 2014/0004/PM of 16 January 2014, which specifies the
different financing options for works managed by the road fund
–– Decree 2011/1339/PM of 23 May 2011, which provides
exemption from procurement contract regulation rights and
grants the benefit of tender dossier acquisition charges for
decentralised territory markets
–– Decree 2012/076 of 8 March 2012, which amends and
completes certain provisions of decree 2001048 of 23 February
2001, on the creation, organisation and function of
–– the ARMP [procurement contract regulation agency]
–– Decree 2012/075 of 8 March 2012, on the organisation of the
Ministry of Procurement Contracts
–– Decree 2005/5155/PM of 30 November 2005, which specifies
how the Special Account created to regulate procurement
contracts operates
–– Decree 2003/651/PM of 16 April 2003, on the ways in which
fiscal and customs regulations are to be applied to procurement
contracts
–– Decree 2003/651/PM of 16 April 2003, on the ways in which
fiscal and customs regulations are to be applied to procurement
contracts
–– Decree 89913 of 31 May 1989, on the reorganisation of the
permanent commission for Security and Defence Contracts.
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A guide to PPP in Africa
PPP Process
1. PPP
Prerequisite:
–– A partnership contract may only be signed in order to carry out
projects if an initial assessment has been carried out at the start
of the procurement process, showing that:
-- the project is too complex for the public entity, or
-- on balance, the advantages and disadvantages of using the
partnership approach conclude that a partnership should be
deployed.
Stages of the procurement process
The following stages are required in order to facilitate the
procurement of a partnership contract:
–– a feasibility study
–– a public call for expressions of interest
-- a call for restricted tender, which should generate at least
five candidates
–– the presentation
–– the pre-qualification dialogue
–– the invitation to tender
–– a bulletin containing the results, and
–– the signing of the contract
Spontaneous offers or unsolicited proposals are permitted.
2. PSD
Ordinary process subject to publicity
–– Opened invitation to tender, the sole procedure that is not
subject to the non-objection opinion of the Public Procurement
Ministry;
–– Restricted invitation to tender, use of which depends on the
special nature of the needs or their complexity;
–– Request for proposals, which is used for technical, aesthetic
or financial purposes.
Other processes
–– Direct agreement which can be used after prior authorisation
of the Public Procurement Authority;
–– Special agreement which is not subject to any analysis from any
commission. It concerns procurement in the national defence,
homeland security and strategic interest of the state.
Delegations are comprised of:
–– interested public companies
–– leasing
–– network operation, and
–– public service concessions.
The following stages must be completed for the procurement
of a PSD:
–– pre-qualification, followed by
–– opening up to competition.
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A guide to PPP in Africa
Ongoing PPP Projects
Building a pipeline for oil products between Limbe
and Yaounde
Year: 2013 – present
Sector: Energy – Oil
Details: Funding, design, construction, use and maintenance of a
pipeline system for transporting oil products in Cameroon, along
the Limbe-Douala-Edea-Yaounde route.
Project for designing, building, using and
maintaining a reference shopping centre in
Bonamoussadi (North Douala)
Year: 2014 – present
Amount: US$22 million
Funding: CENAINVEST S.A./ACTIVA VIE
Sector: Infrastructure.
Details: Designing, building, operating and maintaining a
reference shopping centre in Bonamoussadi (North Douala),
under a Public-Private Partnership Contract.
Providing an additional 50,000 m3 of water per day in
the town of Yaounde
Year: 2014 – present
Amount: US$43 million
Financing: 95% of the funding must be provided by the private
partner and 5% must be provided by the public sector.
Sector: Water
Details: Building a factory that produces drinking water from the
river Mefou between the départments of Mfoundi de la Mefou-et
-Afamba and Mefou-et-Akono. This will affect 20 hectares of land.
Sources
www.cafrad.org
www.ppp-caneroun.com
www.minee.cm
www.ppp-cameroun.cm
15. 13
A guide to PPP in Africa
Côte d’Ivoire (Ivory Coast)
Bile-Aka Brizoua-Bi & Associés
Infrastructure Landscape and Context
Number of projects ongoing
120 projects for an overall sum of approximately US$20 billion.
Funding
World Bank, African Development Bank.
Key players
The President of the Republic: the institutional framework for
the development of PPP is placed under the authority of the
President of the Republic.
The National Steering Committee for PPP (CNP-PPP): the
decision-making, validation and guidance body of the institutional
framework PPP. In particular, the Committee is responsible for
validating projects to be carried out under the framework of PPP
and monitoring their delivery. It is also involved in the process of
selecting private candidates in that it validates documents relating
to the call for tenders, methods of selecting candidates and
evaluation criteria.
Key statistics
Area
322,463 km²
Population
20.32 million (2013)
GDP
US$31.06 billion (2013)
GDP per capita
US$1,528.94 (2013)
GDP growth
8.7% annual variation
(2013)
Executive Secretariat of the PPP (SE-PPP): assists the CN-PPP
in exercising its functions,
Support Unit of the PPP (CA-PPPP): mainly provides help and
expertise to the CNP-PPP and SE-PPP.
Procurement Contracts National Regulation Authority: has
sole competency for making decisions regarding disagreements
relating to the procedures for awarding PPP contracts, without
prejudice to judicial remedy and the intervention of authorities
regulating each sector.
–– National Authority for the Regulation of Public Procurement
(ANRMP)
–– Management of public procurement.
Needs of the region: Agriculture, education, health, infrastructure,
transport, energy.
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A guide to PPP in Africa
Legal and Regulatory Framework
1. On PPPs
To guarantee the economic development of Côte d’Ivoire, on 28
March 2012, the government approved the 2012 – 2015 National
Development Plan (2012-2015 NDP) for coordinating economic,
social and cultural policies.
The 2012-2015 NDPs are based on five strategic pillars:
–– populations living in harmony in a safe society where good
governance is guaranteed;
–– the creation of more long-term, fairly distributed national
wealth;
–– the population having fair access to quality social services,
particularly for women, children and other vulnerable groups;
–– a population living in a healthy environment and acceptable
living conditions, and
–– raising Côte d’Ivoire’s position at regional and international level.
The 2012-2015 NDP encourages use of the public-private
partnership contracts in the budgetary strategy of public
authorities and a list of priority projects has been produced.
The 2012-2015 NDP was subject to review and a bill was
presented by the government for adopting the 2016 – 2020
National Development Plan.
A legal and institutional framework was adopted in 2012 for
public-private partnership contracts with decree 2012-1151 of
19 of December 2012 on public-private partnership contracts.
Other regulations that apply include:
–– Decree 2012-1152 of the 19 December 2012 on powers,
organisation and functioning of the institutional framework for
steering public-private partnerships.
–– decree 2014-246 of the 8 May 2014 which amends decree
2012-1152 of the 19 December 2012 on powers, organisation
and functioning of the institutional framework for steering
public-private partnerships.
–– On 17 September 2015, the National Steering Committee for
Public-Private Partnerships (CNP-PPP) launched an official
portal on PPP: www.ppp.gouv.ci. The site details Côte d’Ivoire’s
PPP projects in detail.
–– Order 2012-487 of 12 June 2012 on the Investment Code.
–– Decree 153 of 24 April 2013 on the appointment of the
National Steering Committee for members of Public-Private
Partnerships.
2. On public service delegations
The following regulations apply:
–– Directive 04/2005/CM/UEMOA of 9 December 2005 on
procedures for the award, implementation and payment of
public procurement and public service delegations within the
West African Economic and Monetary Union
–– Directive 05/2005/CM/UEMOA of 9 December 2005 on the
control and regulation of public procurement and public service
delegations within the West African Economic and Monetary
Union
–– Decree 2009-259 of 6 August 2009 on the procurement
contracts code
–– Decree 2015-525 of 15 July 2015 amending decree 2009-
259 of 6 August 2009 on the procurement contracts code, as
modified by decree 2014-306 of 27 May 2014
–– Decree 2014-306 of 27 May 2014 amending decree 2009-259
of 6 August 2009 on the procurement contracts code
–– Decree 2013-308 of 8 May 2013 on amending decree 2009-
260 of 6 August 2009 on the organisation and functioning of
the National Authority for the Regulation of Public Procurement
(ANRMP)
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A guide to PPP in Africa
–– Decree 2009-260 of 6 August 2009 on the organisation and
functioning of the National Authority for the Regulation of
Public Procurement (ANRMP)
–– Order 299/MEF/DGBF/DMP of 27 May 2010 the powers,
organisation and functioning of the directorate of Public
Procurement
–– Order 804/MEF/DGBF/DMP of 19 October 2010 on the process
for delegating the authority of the minister responsible for
public procurement
–– Order 199/MEF/DGBF/DMP of of 21 April 2010 amending order
2050/MEF/DGBF/DMP of 13 August 2002 on executing budget
appropriations according to the procurement contracts Code
–– Order 200/MEF/DGBF/DMP of 21 April on setting thresholds
for contracting, validating and approving within the public
procurement process
–– Order 661/MEF/ANRMP of 14 September 2010 setting the
process for making referrals, legal proceedings and decision-
making in relation to the appeals and sanctions unit
–– Order 805/MEF/DGBF/DMP of 19 October 2010 on the
organisation and functioning of the Administrative Commission
for Conciliation (CAC).
PPP Process
1. PPP
Prerequisites for resorting to PPPs
Ivorian regulations do not subject the use of PPPs to any particular
special conditions.
However, the recourse to a PPP by a public entity with a
partnership contract must be justified by a prior assessment.
Following this assessment, the project must be specified in the
National Development Plan by the public authority that wishes to
enter into the contract in order for it to be accepted.
The procurement process
The processes permitted for PPPs include:
–– open tender: the preferred procurement process. It must be
publicised at national and international level and a prior pre-
qualification phase is possible but not obligatory
–– restricted tender: the public entity may use this procurement
process when the needs to be met require a particular skill
which few applicants are able to provide
–– competitive dialogue: which is organised by a charter produced
by the CN-PPP
–– direct negotiation: the contracting entity may only use this
in four specific cases (extreme urgency, national defence or
security, if only one operator is able to supply the required
service, if the tender fails).
With the exception of open tender, the other procurement
processes, which are dispensatory, must only be used in
exceptional circumstances, justified by the contracting public
authority and authorised in advance by the Minister of the
Economy and Finance following the opinion of the CNP-PPP.
2. For public service delegations
In principle, the default process is the open tender. The
contracting authority may, depending on how complex the
project is, go through an open tender with pre-selection or a
two-stage tender, or open tender with competition, or restricted
tender.
Exceptionally, the contracting authority may have recourse to a
direct agreement or mutual agreement.
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A guide to PPP in Africa
Ongoing PPP Projects
1. Underground project in Abidjan
Year: 2015 – 2019
Amount: US$566 million
Funding: World Bank, International Monetary Fund
Sector: Transport
Details: This project consists of creating a “métro”-style or
underground urban transport to serve Côte d’Ivoire, from Anyama
to Felix-Houphouët-Boigny International Airport. The project was
approved by the World Bank and the International Monetary Fund.
The project is anticipated to be carried out in two phases.
2. Renovating and fitting the University Hospital of
Cocody
Year: 2015 – present
Amount: US$34.5 million
Funding: To be confirmed
Sector: Health
Details: Renovate buildings, reinforce technical equipment and
provide the department with adequate tools to enable the hospital
to provide patients with the best care possible on a diagnostic and
therapeutic level.
3. CIPREL IV thermal power station
Year: 2011 – present
Amount: US$385 million
Funding: Oragroup, BOAD, BOA-CI, BIAO-CI, SIB-CI, SFI BAD,
Proparco
Sector: Energy
Details: Ivorian electricity company Ciprel built a thermal power
station in the industrial zone of Vridi in Abidjan. Combustion
turbines produce the electricity. The power station known as
CIPREL was built in several phases (I to III). Following the success
of the project, in 2011, Côte d’Ivoire extended the power station
with CIPREL IV and its 111 MW gas turbine, which went into
service in January 2014 and a steam turbine with a 111 MW
capacity is currently under construction.
CIPREL IV will enable a total capacity of 543 MW to be reached.
Obstacles / Challenges
The Prime Minister strives to move from an agricultural economy
towards an industrial economy.
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A guide to PPP in Africa
Sources
www.news.abidjan.net
www.challengesradio.com
www.gcNPD.gouv.ci
www.paris21.org
www.initiative-ppp-afrique.com
www.ppp.gouv.ci
news.abidjan.net
www.initiative-ppp-afrique.com
www.imf.org
www.eranove.com
www.news.abidjan.net
www.afrique-sur7.fr
The Basilica of Our Lady of Peace is a Catholic minor basilica dedicated to Our Lady of Peace in Yamoussoukro, the administrative
capital of Côte d’Ivoire.
20. 18
A guide to PPP in Africa
Key statistics
Area
1,010,407.87
Population
91 million (2016 estimate)
GDP
$330.765 billion (2016
estimate)
GDP per capita
$3,740 (2016 estimate)
GDP growth
2.1% (2013)
Infrastructure Landscape and Context
Number of projects
18 in total four of which have reached contract completion
(focused on water, education transport and health sectors).
Key players
PPP Central Unit: promotes the national PPP initiative to key
stakeholders within Government and the private sector. It develops
PPP best practice, shares this and validates PPP project proposals.
Furthermore, it provides technical, financial and legal expertise to
the Supreme Committee for PPP Affairs and to the PPP Satellite
Units at the Administrative Authorities.
PPP Satellite Units: units within the Administrative Authorities,
established whenever necessary. A decree is issued by the
Competent Authority of the Administrative Authority regarding the
structure of such units, their competencies and the system of their
work.
PPP Project Preparation Fund: established to fund the
appointment of suitable transaction advisers at line ministry level
in light of the global economic difficulties and the need to appoint
advisers to progress projects.
Infrastructure Finance Facility Co: established as a local
currency financial facility to enable project developers to hedge
against exchange rate and convertibility risk, to enable long-term
financing of projects.
Supreme Committee for Public Private Partnership Affairs: sets
national PPP strategy, endorses its application across PPP projects
and approves individual transactions.
Administrative Authorities: enter into PPP contracts with
relevant project companies for the delivery of specific projects.
Needs of the region
A broad range of infrastructure funded through private financing
to ease pressure on the nation’s capital budget. PPP is viewed as
a key ingredient to boost economic growth and development
through improved infrastructure services, with a focus on
education, health, transport, water and wastewater sectors.
Egypt
Shahid Law Firm
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A guide to PPP in Africa
Legal and Regulatory Framework
Law: The Public Private Partnership Law No. 67 of 2010 provides
a framework for PPP projects to be procured and operated under.
Regulations: The Executive PPP Regulations issued through
Ministerial Decree No. 238 of 2011 provides for specific guidance
on the structuring, deployment and implementation of PPP
arrangements. Its key requirements include:
–– Contract Term – 5 to 30 years from practical completion
–– Contract Value – Less than US$12 million
–– Governing Law – Egyptian law
PPP Process
Project Launch
–– Prepare and issue an Information Memorandum to explain
the project in detail, project scope, the method of selection,
selection process, award criteria and submission requirements.
–– A bidder conference may be held to provide further information.
Qualification
–– A long list of candidates will be identified through applying the
selection criteria.
–– Three or four bidders will be shortlisted whose responses
indicate they are particularly well qualified to undertake the
project.
Tender
–– An Invitation to Present Proposals (IPP) will be prepared, which
contains sufficient information to enable the shortlisted bidders
to prepare a full technical and financial bid, including a full
project description, draft contract, evaluation criteria, submission
requirements, output specification and payment mechanism.
Dialogue
–– Dialogue with each shortlisted bidder to allow bidders to
clarify aspects of the IPP, test technical proposals and discuss
commercial issues.
–– After the conclusion of dialogue, bidders submit their technical
and financial tenders.
–– A discussion of the technical and financial details of each
proposal will be held with each qualified bidder to clarify
their property allow them to reconsider areas that could be
improved, discuss risk allocation and confirm the financial status
of proposals.
–– Clarifications are allowed so long as these fine-tune and do
not change features in a way which would be likely to distort
competition or have a discriminatory effect.
Evaluation
–– Evaluation is then carried out: Technical evaluation takes place
first, with financial evaluation following it.
Appointment
–– A preferred bidder is appointed and a reserve bidder may
be lined up where the authority has concerns regarding the
preferred bidder.
–– Fine-tuning of the contract is permitted at this stage, so long as
it takes place on a fair basis.
–– An operational manual is typically prepared to facilitate
successful delivery.
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A guide to PPP in Africa
Ongoing PPP Projects
1. New Cairo Wastewater PPP Project
Year: Financial close was reached at the end of 2009
Capital Value: US$150 – 200 million
Sector: Wastewater
Details: New Cairo City is a satellite town of Greater Cairo which
has a population of 550,000, and is due to expand to 3 million by
2029. Eversheds’ Tim Armsby advised on this PPP to construct
and operate a new domestic wastewater treatment plant with a
capacity of 250,000 m3/day. It was the first project to close under
the Egyptian Government’s new PPP programme.
2. Abu Rawash Wastewater PPP Project
Year: Financial close due 2015
Capital Value: Approximately US$120 million
Sector: Wastewater
Details: Eversheds’ Tim Armsby advised on this PPP for the design,
financing, construction and operation of a secondary treatment
stage, cogeneration and digestion facilities for the Abu Rawash
Wastewater Treatment Plant, and the operation and maintenance
of the existing primary treatment facilities with a capacity of 1.2
million m3/day. When complete it will be one of the world’s
largest plants in operation and is the first Egyptian PPP to include
brownfield elements and the provision of a stapled financing
package.
3. New Alexandria University Hospitals PPP Project
Year: 2012
Capital Value: US$225 million
Sector: Health
Details: Eversheds’ Tim Armsby advised the Egyptian Ministry of
Finance on a pilot health sector PPP project. Technically, it is the
most complex PPP project to be launched in Egypt to date and
aims to deliver two hospitals for Alexandria University at Smouha
Maternity University Hospital and Mowassat Specialized University
Hospital, in accordance with international standards. Despite the
impact of the Egyptian revolution, financial close was achieved in
April 2012.
Legal 500, EMEA 2012 Edition (Projects and Infrastructure) noted that:
“Having been “ … retained by the Ministry of Finance as sole counsel on
every social infrastructure project to date; and is instructed by various
regional state entities on innovative construction and oil and gas projects.
PPP mandates include a ground breaking construction project for two
hospitals in Alexandria. The ‘highly experienced’ ... Tim Armsby [is]
recommended”.
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A guide to PPP in Africa
Obstacles / Challenges
1. Project Company “PPPCo”. being subject to restrictions
stipulated in the provisions of the Companies Law No. 159
of 1981, such as Article 41 (employees profit sharing).
2. Setting specific prices for the products and services provided
by the project as currently provided under under to Article
34(e) of Law No. 67 of 2010.
3. Transferring of profits to the foreign party in foreign currency
without delay.
4. Ensuring the availability of energy at competitive prices and
based on equality and non-discriminating basis.
5. Pursuant to Articles 12 and 13 of Law No. 67 of 2010, the
Administrative Authority and the Competent Authority’s
powers to intervene with the implementation of the PPP
Contract.
6. Although Law No. 67 of 2010 is excluded and independent
from the Public Tenders Law No. 89 for 1998, the authorities
may have relied on the majority of provisions, effectively
ignoring this exclusion.
7. The Ministry of Finance/PPP Central Unit should issue
executive regulations addressing the handing over of the
project at the expiry of the PPP Contract in accordance with
Article 34 of Law No. 67 of 2010.
8. The need for prior approval by either the Supreme Committee
for PPP Affairs (as currently pursuant to Article 35 of Law No.
67 of 2010) or the concerned minister (as currently pursuant
to Article 1 of the Arbitration Law No. 27 of 1994).
Sources
www.pppcentralunit.mof.gov.eg
Zamalek Island, Cairo, Egypt.
24. 22
A guide to PPP in Africa
Key statistics
Area
1.14 million square km
Population
Above 84 million
GDP
To be confirmed.
GDP per capita
US$550.00
GDP growth
10.28%
Infrastructure Landscape and Context
Key players and needs of the region
The Ethiopian Procurement and Property Administration
Proclamation no. 649/2009 empower the Ministry of Finance and
Economic Development to issue directive governing the rules
for the formation and modes of implementation of public private
partnership.
Legal and Regulatory Framework
So far the Ministry of Finance and Economic Development has not
issued a directive governing PPP rules in Ethiopia.
PPP Process
Since Ethiopia lacks a legislation particularly governing PPPs and
an authorised public organ, the process and implementation of
such partnership is left to the relevant ministries.
Ongoing PPP Projects
–– Lehulu: an Ethiopian company named Kifiya Financial
Technology PLC owns the company. It provides a one-stop
facility for payments of all utility bills (including electricity, water
and landline phone);
–– The Addis Ababa Exhibition and Market Development Enterprise
work together with the City Administration and the Addis Ababa
Chamber of Commerce and Sectoral Association;
–– The Africa JUICE Tibila SC, a joint venture between a
Netherlands-based company, Africa JUICE BV and the Ethiopian
government is engaged in the production of “Passion Fruit”.
Ethiopia
Fikadu Asfaw and Associates Law Office (FALO)
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A guide to PPP in Africa
Obstacles / Challenges
Public and private sector partnership is raised by the government
as a key strategy to enhance the country’s growth and
development. However:
1. There is a lack of clear-cut legislations governing PPP rules;
2. There is a lack of authorised public organ (public agency)
handling PPPs;
3. The absence of government guarantees and incentives could
be taken as challenges for the development of PPPs in Ethiopia.
Sources
The Ethiopian Procurement and Property Administration
Proclamation no. 649/2009
The Ethiopian Investment Proclamation no. 769/2012
Investment Guide to Ethiopia
www.theafricareport.com
www.addisfortune.net
www.undp.org
www.worldlifeexpectancy.com
26. 24
A guide to PPP in Africa
Key statistics
Area
227,540 sq.km (2014)
Population
25.9 million (2013)
GDP
US$48.1 billion (2013)
GDP per capita
US$3,992 (2013)
GDP growth
7.6% (2013)
Infrastructure Landscape and Context
Number of projects
26
Funding
The majority of infrastructure development are funded by
government budgets which come from revenue generated or
loans contracted by the Government. Infrastructure development
through a PPP programme will be funded from private resources
with support provided by the Government in the form of
government guarantee.
Key players
Ministry of Finance (MoF): the government ministry responsible
for co-ordinating the whole PPP programme through the various
divisions and units under the ministry particularly the Public
Investment Division (PID) which is made up of the Project and
Financial Analysis (PFA) Unit and the PPP Advisory Unit (PAU).
Project and Financial Analysis (PFA) Unit: the PFA operates
under the PID as the unit responsible for analysing the project
and it ensures projects are consistent with the overarching
government plan: that the use of PPP option is preferable to direct
public procurement; financial viability and economic soundness;
compliance with procurement process, etc.
PPP Advisory Unit: a unit under the PID which promotes PPPs
and provides support to Contracting Entities in the identification,
preparation of feasibilityanalyses, structuring, negotiations and
procurement of PPP projects, In addition, the Unit is mandated
to build capacity among public sector entities on implementation
of PPPs.
Debt Management Division: a division under the MoF which
ensures fiscal sustainability of PPP projects, considering both direct
and contingent liabilities on government’s finances. The Division is
also responsible for considering government’s supports required
for PPP projects and the assisted financial implications.
Budget Division: a division under the MoF responsible for the
incorporation of PPP projects into the annual budget.
PPP Approval Committee: this Committee is made up of
ministers and heads of agencies that have a direct impact on the
implementation of PPP projects. The Committee is responsible for
approving PPP projects at various implementation stages.
Contracting Entities: these are government implementing
entities made up of central government ministries, departments
and agencies (MDAs) and local government metropolitan,
municipal and district assemblies (MMDAs). These are the entities
responsible for the implementation of projects that fall within their
scope of responsibility.
Ghana
AB & David
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A guide to PPP in Africa
Needs of the region
A broad range of infrastructure, including:
–– Roads
–– Rail
–– Airports
–– Ports
–– Accommodation
–– Water
–– Energy.
Legal and Regulatory Framework
Law: The draft PPP law contained within the Ghana Public Private
Partnership Bill – 2013has been reviewed by the World Bank and
is under consideration by the Ministry of Finance (MoF) and the
Attorney General’s Office.
Regulations: Associated PPP Regulations will be developed once
the PPP law has been approved.
PPP Process
Project Inception
As soon as a contracting entity identifies a project that may be
concluded as a PPP, the entity has to provide a Project Brief/
Concept and register the project with the PID.
Pre-Feasibility Study
To determine whether the proposed PPP is in the best interests
of the country, the contracting entity must undertake a pre-
feasibility study and developa business case to explain the
strategic and operational benefits of the proposed PPP for
the contracting entity in line with its strategic objectives, and
demonstrating the alignment of the project with the National
Infrastructure Plan and government policy. The pre-feasibility
study must describe in specific terms:
–– in the case of a PPP involving the performance of the
contracting authority’s function, the nature of the function
concerned and the extent to which this institutional function,
both legally and by nature, may be performed by a private party;
–– in the case of a PPP involving the use of state property, a
description of the state property concerned, the uses (if any)
to which such state property has been subject prior to the
registration of the proposed PPP, and a description of the
types of use that a private party may legally subject such state
property to; and
–– an indication of the possible location(s) and provide estimates
of broad project costs, and an initial indication of whether the
project is likely to be viable and affordable.
Feasibility Study
A contracting entity shall undertake and submit to the PID a full
feasibility study and appraisal of the proposed project. The full
feasibility report should:
–– in respect to a PPP project pursuant to which the contracting
authority will incur any financial commitments, demonstrate the
affordability of the PPP for the institution;
–– set out the proposed allocation of financial, technical and
operational risks between the institution and the private party;
–– demonstrate the anticipated value for money to be achieved by
the PPP;
–– provide detailed estimates of the viability gap and the need for
incentives; and
–– explain the capacity of the institution to procure, implement,
manage, enforce, monitor and report on the PPP.
Procurement Process
The procurement process must be based on a system that is
fair, transparent, competitive and cost-effective. Usually, an
international competitive bidding process is adopted.
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Qualification
–– A request for expression of interest is published to the market.
–– Interested bidders will need to respond to the pre-qualification
process contained within it that request for expression of
interest.
Tender
–– A request for proposals will be issued to the shortlisted bidders.
–– Each shortlisted bidder will need to respond to the submission
requirements, and may be required to submit a bid security.
Evaluation
Evaluation will be performed to identify the selected bidder.
Dialogue
Negotiations may be held to review issues identified in the draft
PPP Agreement as being subject to negotiation.
Appointment
–– After the procurement process has been concluded but
before the contracting authority concludes a PPP Agreement/
Concession, the contracting authority must obtain approval
from the Approving Authority for PPPs subject to the provisions
of the Approval Schedule to this Policy and detailed regulations
to be promulgated.
–– A minimum 21 day standstill period from final approval to
contract award must be observed prior to financial close.
Ongoing PPP Projects
1. Boankra Inland Port
Year: 2015
Capital Value: US$250 million
Sector: Ports/Rail
Details: The 400-acre inland port will be redeveloped through
a BOT structure and linked effectively to the Tema and Takoradi
ports through the development of an eastern corridor railway
line. The project provides a significant increase in the country’s
logistics capability.
2. Accra – Takoradi Highway Dualisation
Year: 2015
Capital Value: To be confirmed.
Sector: Roads
Detail: The project consist of a 185km Accra–Takoradi Highway.
The Government intends to engage a private party who will
design, finance and construct the road into four lanes and
manage it for the concession period.
3. Accra – Tema Motorway Project
Year: 2015
Capital Value: To be confirmed.
Sector: Roads
Details: The Government intends to engage a private partner to
design, finance and construct the 19.3km toll road that connects
the Tema (the port city) to Accra and other parts of the country
including other landlocked countries that ship goods through the
Tema Port.
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A guide to PPP in Africa
4. Korle-Bu Teaching Hospital
Year: 2013
Capital Value: To be confirmed.
Sector: Health
Details: The delivery of a new laboratory and imaging service to
improve hospital performance, address capacity constraints and
ensure private sector revenue generation, including maintenance
of the existing satellite laboratory services.
5. Model Markets
Year: 2015
Capital Value: To be confirmed.
Sector: Social/Community Base Development Project
Details: The Ministry of Local Government & Rural Development
in collaboration with the relevant MMDAs are undertaking projects
to modernise a number of markets. The project entails award of
concessions to private partners to design, finance, construct and
manage the specific markets for concession periods. Currently,
there are about nine such markets for which procurement
processes to engage the private partners has been initiated by the
Accra Metropolitan Assembly.
Obstacles / Challenges
1. PPP Champion: one main challenge is lack of a PPP champion
to push forward the government’s PPP programme. Lack of
political will to ensure implementation of the various projects
initiated by the Government.
2. Awareness and Understanding: there are a number of capacity
building programmes undertaken by the PID. However,
awareness and understanding of full PPP implementation
remains low within the public sector.
3. Government Support: inability of the Government to provide
support especially in terms of any sovereign guarantees to
support the implementation of projects.
4. Finance Structure: closely related to the above is the failure
on the part of private partners to achieve financial close due
to inappropriate structures adopted for specific projects,
affecting bailability.
5. Risk Allocation: inappropriate project structure due to the
allocation of risks to the wrong party in terms of the party
which bears the design risk, cost overrun, market risks, etc.
This usually leads to challenges in the implementation of the
project.
Sources
www.mofep.gov.gh
www.dailyguideghana.com
www.observer.ug
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A guide to PPP in Africa
Key statistics
Area
580,370 sq.km (2014)
Population
44.86 million (2014)
GDP
US$60.94 billion (2014)
GDP per capita
US$1,358.3 (2014)
GDP growth
5.3 % (2014)
Infrastructure Landscape and Context
Key players
Public Private Partnership Committee: established by the Public
Private Partnerships Act, 2013 (“PPP Act”) the PPP Committee
consists of principal secretaries in various State Departments,
including finance, government co-ordination, planning, lands,
devolution, Attorney General and private sector representatives.
Its functions include identification of national priority projects,
ensuring each project agreement is consistent with the PPP Act,
formulation of policy guidelines, approval of projects submitted by
a contracting authority, approval of feasibility studies conducted
by a contracting authority, ensuring effective implementation
of project agreements, and review of the legal, institutional and
regulatory framework of PPPs.
Public Private Partnership Unit: the PPP Unit was established
within the National Treasury, pursuant to the PPP Act. It serves as
the secretariat and technical arm of the PPP Committee, providing
technical, financial and legal expertise to the PPP Committee
and any PPP node. The PPP Unit makes recommendations on
approval or rejection of projects prior to submission to the PPP
Committee for approval, assists contracting authorities to identify,
design, appraise, evaluate and negotiate projects, and ensures the
tendering process conforms to the requirements of the PPP Act.
Public Private Partnership Node: the PPP Act requires that
a contracting authority that intends to enter into a PPP shall
establish a PPP node, headed by an accounting officer of the
contracting authority and other relevant personnel. A PPP node
shall, on behalf of the contracting authority, identify and prioritise
projects, appraise project agreements, ensure that the project
agreement and tendering process complies with the Act, monitor
implementation of the project agreement, oversee management
of a project and ensure transfer of assets at the expiry of a project.
Contracting Authority: defined within the PPP Act as a state
department, agency, state corporation or county government
which intends to have a function currently undertaken by it
performed by a private party.
Needs of the region
Vision 2030 is Kenya’s development blueprint, aiming to
transform Kenya into a newly industrialised middle-income
country, providing a high quality of life, services and facilities to
all its citizens by the year 2030, with investment in infrastructure
facilities being given the highest priority. However, the funds
required to fully support the country’s development agenda and to
meet the infrastructure deficit will require the involvement of the
private sector, hence Public Private Partnerships are being used
as a tool for development. In August 2014 the National Treasury,
Kenya
MMAN Advocates
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A guide to PPP in Africa
through the PPP Unit, published a National Priority List of 59 PPP
projects that have been approved by the Government. The List
comprises projects in transport and infrastructure, energy and
petroleum, water and sewerage, tertiary education facilities, public
sector housing, hotels and convention centres, health equipment
and infrastructure development, ICT, and special economic zones
sectors.
Legal and Regulatory Framework
Law: The Public Private Partnerships Act 2013. The preamble
describes its role as providing for the participation of the private
sector in the financing, construction, development, operation
or maintenance of infrastructure or development projects of
the Government through concession or other contractual
arrangements; the establishment of the institutions to regulate,
monitor or supervise the implementation of project agreements
on infrastructure or development projects and for connected
purposes.
Regulation: The Public Private Partnership Regulations 2014 (PPP
Regulations). The Regulations govern the feasibility study process,
appointment of advisers, the bidding process, negotiations and
project agreements.
Guidelines: The Petition Committee Guidelines, 2014 were
published by the Petition Committee established under the PPP
Act to guide private party bidders and contracting authorities on
the filing, hearing and determination of petitions in relation to the
process for tendering for, or entering into, a project agreement.
Policy: A Policy Statement on Public Private Partnerships
published in November 2011 by the Government underscored its
commitment to the PPP model as a tool of development.
PPP Process
The PPP process is guided by the PPP Regulations. The PPP
Regulations detail the process of project preparation and appraisal
as well as the conduct of feasibility studies by contracting
authorities and approval by the PPP Committee. In addition,
the PPP Regulations prescribe how a contracting authority can
procure transaction advisers to assist them in the PPP process. The
PPP Regulations permit contracting of projects through solicited
proposals and privately initiated investment proposals, with the
process involved set out in the PPP Regulations. The negotiation
process and entry into project agreements is also governed by the
PPP Regulations.
Ongoing PPP Projects
1. Kenya Uganda Railway Line
Year: 2006
Sector: Transport
Details: The Governments of the Republic of Kenya and the
Republic of Uganda agreed in 2004 to concession their respective
railways together. Rift Valley Railways (RVR) signed Concession
Agreements in 2006 and Amending Deeds in relation to these
agreements in 2010. The concession has a 25 year duration.
The concessionaire is to rehabilitate, operate and maintain
the rail networks as one railway system so as to improve the
management, operation and financial performance of the two
rail networks in a coordinated manner.
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2. Independent Power Projects
Year: 1996 onwards
Sector: Energy
Details: Following the shift in the 1990s away from concessionary
funding for power projects towards private sector participation in
infrastructure and a wave of sector reforms, IPPs were introduced
in Kenya in 1996 to meet the country’s energy demands.
IPP Name Type Capacity MW
Thika Power Thermal 87
Triumph Thermal 82
Gulf Power Thermal 80
Orpower Geothermal 52
Lake Turkana Wind 300
Obstacles / Challenges
1. Inconsistent government resolve to implement approved
projects.
2. High compensation costs involved in compulsory acquisition
of private land required for projects.
3. Lack of public understanding of the potential benefit of PPP
models such as tolling when contrasted with the cost to the
public use of such infrastructure.
4. Lack of experience and capacity at the County Government
level in implementing PPP projects.
5. Mandatory granting of operation and maintenance contracts
for PPP projects to pre-determined parties where the
construction of infrastructure was funded by a foreign
government’s grants and loans.
6. Resistance to changing from traditional methods of
procurement.
Sources
http://data.worldbank.org/country/kenya
www.pppunit.go.ke
www.kenyalaw.org
Policy Statement on Public Private Partnerships, Office of the
Deputy Prime Minister and Ministry of Finance, November 2011
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Legal and Regulatory Framework
The draft of law related to PPP was published in 2011 further
to the World Bank’s campaign and with a view to increase the
participation of private investments (international and national)
and to improve the economy of Madagascar.
The provision 2015-039 regulating Public-Private Partnership
(hereafter “the Law”) was voted by Parliament at its session on
9 December 2015.
It governs all economic and social sectors including those
regulated by specific legislation, except the mining and
hydrocarbon sectors.
Article 1 of the Law defines a PPP project as any contract, whatever
its type and its denomination, by which the public authority
concedes to a third party, for a prescribed period, according to
the time for investments to be amortised or to the financing terms
adopted:
–– part or all of the financing of infrastructure, equipment, works
or immaterial goods needed for public service, and
–– part or all of their construction, rehabilitation, change,
maintenance, exploitation or management, with or without
delegation of public service.
A great support of the private sector is shown in the funding of
some public private partnerships.
Madagascar
HK-Jurifisc
Infrastructure Landscape and Context
Key statistics
Area
58729.5 sq.km (2014)
Population
24.235 million (2014)
GDP
US$9.52 billion (2016)
GDP per capita
US$382 (2016)
GDP growth
4.1% (2016)
Key players
National Committee for Private Public Partnerships: in
charge of assisting the Government in defining its PPP policies
and strategies.
The PPP Unit: in charge of assisting Contracting Authorities in
pre-feasibility assessment and procurement of PPP contracts.
The Unit is also in charge of monitoring and evaluating PPP
practice in Madagascar.
The Procurement Contract Regulation Authority:
controls the procurement procedure.
The Finance Ministry: in charge of ensuring financial and tax
sustainability of the projects and whose approval is required prior
to the conclusion of any PPP contract or its amendments that
engage public funds.
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PPP Process
Depending on the circumstances, the public procurement
procedure is led either in accordance with the procurement plan
of the relevant the relevant International Financial Organization
(e.g. the World Bank) that supports the project, together with the
approval of the Bid Evaluation Committee, or with the provisions
of the law 2004-009 dated 26 July 2004 on Code of public
contracts.
Public procurement procedure may be conducted in three
different ways:
–– opened or restricted bidding
–– direct agreement
–– competitive dialogue.
Article 17 of the Law provides that a procurement notice for a
PPP project conducted through an open bidding or a competitive
dialogue procedure has to be published in the newspapers
empowered to publish legal notices and on the Unit PPP website.
The same article states that the publication can be done by a mere
advertisement and on the Unit PPP website when the cost of a PPP
project is beyond the thresholds set from time to time by decrees.
The public procurement notice gives details of the evaluation
criteria and the conditions of the the PPP contract. In this regard,
article 29 of the Law states that bidders must provide a bid
guarantee in the form of a first demand bank surety or a bank
surety bond upon submission of their proposals. The guarantee is
generally set at a cap of 50% of the expected investment.
The public authority may decide, at any time, not to pursue the
procurement process. A notice of interruption must must be
published in this case via the same methods as via the same
methods as the initial public procurement notice and must specify
the grounds on which the procurement process has been halted.
The public authority must opt for either the discontinuation or
the launch of a new procedure, under either identical or adjusted
conditions, in case of an unsuccessful tender.
A decree defines the procedure by which the public authority
publishes the results of the procurement process.
At the conclusion of the PPP contract a copy of which is annexed
to the tender documents, the winning bidder is required to furnish
a performance guarantee relating to the anticipated investment in
the same form as the bid guarantee.
The PPP contract determines freely the rights and obligations
ofParties as well as how risks are shared between them.
The contract is drafted in accordance with international principles
regulating the conclusion of contracts and international best
practice of financing projects and PPPs.
The PPP contract may be terminated by mutual consent or on the
initiative of each Party the event of serious misconduct, financial
difficulties encountered by the other Party or in case of force
majeure.
The private sector is entitled to a compensation for the suffered
loss when the contract is breached by the public authority for
general interest.
Possible reference to either a national or international arbitration
procedure is permitted by article 49 of the Law for the resolution
of any dispute related to the execution, interpretation or
revocation of PPPs contracts.
Tender
A tender is the preferred procurement process in which the
partnership contract is awarded to the tenderer whose tender is
the most economically advantageous. It could be with or without
required pre-qualification.
It can also be an open or restrictive tender.
Direct negotiation is possible for exclusively the following
reasons (Art.24):
–– national defence and public safety;
–– for PPP subject of two consecutive identical tender that
remained unsuccessful;
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A guide to PPP in Africa
–– in presence of emergency situations that arose as defined by
the PPP laws;
–– if it refers to activities the operation of which is exclusively
reserved for a patent holder, or a holder of mining or petroleum
rights;
–– in case of public interest reasons and under prior authorisation
of the Council of Ministers;
–– in case of complementary services of a prior PPP performed by
the same operator.
Competitive dialogue
–– It is possible for all complex PPPs above the minimum
investment threshold or expected income provided for by
decree when the contracting authority cannot determine the
means necessary to meet its needs or to evaluate the technical,
financial and legal solutions available on the market (Art.25).
The approval of the Public Procurement Regulation Authority is
required for the use of competitive dialogue.
Ongoing PPP Projects
1. Infrastructure
–– Extension of Antsirabe Aerodrome for the shipment of local
products by air. Eight private firms participate in the financing of
the project;
–– Rehabilitation of Ivato international airport and Nosy Be airport
conceded to the consortium composed of Bouyges Bâtiment
International, Aéroport de Paris Management, Meridian Africa
and Colas Madagascar. Work is carried out for the receipt by
Madagascar of the Summit of the Francophonie in 2016.
2. Agriculture
Collaboration between the Ministry of Breeding and the Group
Avitech/LFL for the training of farmers.
3. Energy
Concession by the Ministry of Energy and Oil sector to private
firms of the renovation and the operation of few hydroelectric
facilities.
4. Education
Conclusion of partnership with construction firms for the building
of public schools throughout the country.
Obstacles / Challenges
The main obstacles with PPP in Madagascar are:
1. Politics: Madagascar is actually considered as a “high risk
country” because of the current political instability, so this
situation is not attractive for foreign investors.
2. Pricing:
–– The cost of investment is very high (billions of dollars) so
foreign investors have difficulties in bringing enough cash.
–– The clearance tax cost is very expensive, so the importation
of materials needed for the investment is very difficult.
3. Tax and jurisdictional insecurity
4. General corruption
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A guide to PPP in Africa
Mali
Brysla Conseils
Infrastructure Landscape and Context
Key statistics
Area
1,240,000 km²
Population
17.96 million
GDP
US$12.04 billion (2014)
GDP per capita
US$715.13 (2013)
GDP growth
4.30% in 2015
Legal and Regulatory Framework
To date, there is no legislation regarding public-private partnership
contracts but a draft law is under way.
However, Mali has regulations on public service delegation in its
public procurement contracts:
–– Directive N°04/2005/CM/UEMOA of 9 December 2005 on
the awarding, execution and regulation procedures of public
procurement contracts and public service delegation of the
West African Economic and Monetary Union;
–– Directive n°05/2005/CM/UEMOA on the monitoring and
regulation of public procurement contracts and public service
delegation in the West African Economic and Monetary Union;
–– Law 94-009 of 22 March 1994 on the fundamental principles
of the creation, organisation, management and monitoring of
public services;
–– Decree 2015-0604/P-RM of 25 September 2015 on public
procurement contracts and public service delegation;
–– Decree 2015-3721/MEF-SG of 22 October 2015 determining the
implementation details of the decree 2015-0604/P-RM ;
–– Decree 2016-0155/PM-RM of 15 March 2016 on the organisation
and functioning of the procurement contracts units; and
–– Decree 08-485/P-RM of 11 August 2008 on the awarding,
execution and regulations of public procurement contracts and
public service delegation, amended by the decree 2011-079/P-
RM of 22 February 2011. Those decrees govern only the public
contracts notified prior to the effective date of the Decree 2015-
0604/P-RM.
Number of ongoing Projects
Unknown.
Key players
The National Authority regulating public procurements: a key
player with several missions, including the definition of the national
policies for public procurements and public service delegation
contracts.
The general management of public public procurement
and public service delegations: in charge of developing and
monitoring the implementation of the public procurement and
Public Service delegations’ national policies.
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A guide to PPP in Africa
PPP Process
Procedure for public service delegation
The awarding of a public service delegation agreement must
be preceded by an advert that provides the clearest possible
information on the project concerned. The deadline for
submissions is at least forty-five (45) calendar days from the date
of publication of the notice.
Pre-qualification of candidates may be arranged.
The private sector must prove that they satisfy the pre-
qualification criteria that the delegating authority judges to be
appropriate. This pre-qualification aims to identify potential co-
contractors who offer sufficient technical and financial guarantees
and have the capacity to ensure the continuity of the public
service for which they are bidding.
The selection of offers must be carried out following an open
tender procedure.
Ongoing PPP Projects
1. Segou solar plant
Year: 2015
Capital Value: US$55 million
Financing: International Finance Corporation
Details: A solar plant project with 33 MW of power is being
constructed in Pélingana Wéré, Ségou. The plant was developed
by the Norwegian Company Scatec Solar in partnership with IFC
Infra Ventures and Africa Power 1. The project will be carried out
under a concession agreement.
Currently being procured or feasibility being assessed:
The African School of Mines
Mali is the third highest gold producer in Africa (70% of the
country’s export earnings). This school should allow students to
be trained in all areas of the mining profession. The cost of this
project is fixed at approximately US$38 million. The State is asked
to provide a grant of about US$17 million.
Waste Power Plant of Noumoumbougou
A project for the construction of a power plant with a view to
transform the solid waste in the town of Bamako into electrical
energy (53,000 tons/year). The plant should have an installed
power of 5MW. The cost of the project is provisionally evaluated
at US$50.5 million.
Dry Ports of Kayes and Sikasso
A project for the construction of areas for receiving goods mainly
from the ports of Côte D’Ivoire and Senegal. This will involve
granting a 20-year concession to the operator. The funding is
estimated at about US$38 million.
Projects being finalised
This is predominantly in the field of the construction of solar
or thermal power plants. It is important to note that these are
contracts which are being finalised.
We have been unable to obtain precise data on the amount of
these investments:
–– Albatros Energy Mali Thermal Power Plant 60 MW In Kayes;
–– Solar Power Plant 50MW Segou;
–– Solar Power Plant 50MW Sikasso;
–– Solar Power Plant 50MW Kita.
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A guide to PPP in Africa
Obstacles / Challenges
1. In order to drive its economy forward, the State of Mali has
identified a number of projects which it cannot manage alone
due to the considerable investment required. These projects
are likely to require a private partner. These are projects in the
sector of Mines, Energy and Transport.
However, the current legislation in force in Mali is not fully
suitable for implementing such projects. Arrangements
regarding public service delegation feature in the Procurement
Contract Code but they are not sufficient. Questions on the
interpretation of these rules remain.
2. To resolve this problem, Mali requires specific legislation on
PPPs. The aforementioned code which is currently being
prepared will allow the clarification of legal rules applicable to
PPPs.
The promotion of PPPs requires particular expertise. It is
therefore necessary to create an institution whose essential
mission will be to identify the opportunities to develop PPPs
and provide interested public people with support on the
preparation, negotiation and monitoring of PPP contracts.
3. Currently there are several projects under way. Some are being
studied and others are in the process of being finalised.
Sources
www.maliactu.net
www.intellivoire.net
View of Bamako and the Niger River in Mali.
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A guide to PPP in Africa
Key statistics
Area
1,860 sq.km (2014)
Population
1.261 (2014)
GDP
US$12.62 billion (2014)
GDP per capita
US$9,710 (2014)
GDP growth
3.6% (2014)
Infrastructure Landscape and Context
Key players
PPP Unit: the body mandated to deal with all matters relating to
a PPP referred to it by the Committee. Since it was set up in July
2002 the unit has drafted the PPP legislation and produced the
PPP Guidance Manual.
PPP Committee (Committee): makes an assessment of a project
submitted to it and gives its recommendations to the relevant
contracting authority, develops best practice guidelines in relation
to all aspects of PPP, formulates policy in relation to PPP projects
and develops PPP awareness in the country.
Contracting Authority: is responsible for identifying, appraising,
developing and monitoring a project to be implemented. The
contracting authority undertakes or causes to be undertaken a
feasibility study for a PPP project and submits the feasibility study
to the PPP Committee for its approval. It also prepares a request
for proposal on the approval of the feasibility study and, where the
terms of the model agreement impact on public finance, seek the
approval of the Committee.
Central Procurement Board (CPB): ensures transparency and
equity in the bidding procedures, examines and evaluates the bids
received, provides recommendations to the contracting authority
for entering into negotiations with the preferred bidder and
approves the award of the project.
Transaction Adviser: a person or group of persons that either
possesses or has access to professional expertise in financial
analysis, economic analysis, legal analysis, environmental impact
analysis, contract documentation preparation, tender processing,
engineering or cost estimating. A transaction adviser assists in
bringing a PPP project from the concept stage through public
bidding and award to actual execution.
Needs of the region
Traditionally, PPP has been applied to the infrastructure sector –
in particular in the electricity, telecoms, water, transport and solid
waste sectors, and increasingly in the social (health and education)
and IT sectors.
Mauritius
Eversheds
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A guide to PPP in Africa
Legal and Regulatory Framework
Public-Private Partnership Act 2004 (PPP Act) provides for
the implementation of public-private partnership agreements
between contracting authorities and private parties and to
establish a set of rules governing public-private procurement.
PPP Process
The PPP Act describes the process for the preparation of the
project and the studies and documentation that should support
the project.
Feasibility Study
The process begins with a feasibility study undertaken (or
caused to be undertaken) by the contracting authority to assess
whether the proposed project is feasible as a PPP. The study shall
demonstrate comparative advantages in terms of strategic and
operational benefits for implementation under a PPP agreement,
describe in specific terms the nature of the contracting authority’s
functions, the specific functions to be considered in relation to the
project and expected inputs and deliverables; the extent to which
those functions can lawfully and effectively be performed by a
private party in terms of an agreement; and the most appropriate
form by which the contracting authority may implement the
project under an agreement. The study must demonstrate that the
agreement shall be affordable to the contracting authority, provide
value for money and transfer appropriate technical, operational or
financial risk to the private party. It shall also explain the capacity
of the contracting authority to effectively enforce the agreement.
Procurement
The procurement process involves the contracting authority
consulting the CPB to obtain its written authorisation to conduct
a pre-selection exercise.
The pre-selection document has to be prepared by the
contracting authority and includes a public invitation for applicants
to apply for pre-selection. All pre-selection documents will be
subject to the written approval of the CPB before its issue and
publication. The contracting authority has to prepare and submit
the request for proposal to the CPB for its written approval. No
document pertaining to a request for proposal may be issued to
pre-selected bidders or bidders unless approved by the CPB. The
CPB is responsible for the evaluation of bids - but it may set up an
evaluation committee for this purpose. The award of the contract
has to be approved by the CPB.
Unsolicited Proposals
A private promoter submits a project concept and the proposed
cost of a detailed feasibility study to the contracting authority.
The contracting authority will examine the project concept in line
with the relevant sector strategies and investment programme
and will make an assessment as to whether the project can be
considered for implementation under a PPP arrangement. The
contracting authority will submit the project concept together
with its assessment to the Committee, which may approve
or reject the project concept. The Committee will inform the
contracting authority of its decision. If the project is retained
the contracting authority will request for certain information on
the private promoter and a feasibility study. The Committee will
assess the feasibility study and evaluate the technical proposal.
If it is accepted the contracting authority will proceed with an
invitation to bid. The contracting authority must prepare a Request
for Proposal documents to be approved by the CPB before bids
are invited. At this stage the private promoter will be requested
to submit their technical and financial proposals. The private
promoter will be awarded the project if his price is within 10% of
the price of the preferred bidder, and if the private promoter is not
awarded the contract, the contracting authority will compensate
him for the approved cost of the feasibility study. The contracting
authority will claim such cost from the successful bidder. The CPB
will evaluate bids received and will give its approval for the award
of the project to the successful bidder.
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A guide to PPP in Africa
Public-Partnership Agreement
The agreement shall identify the responsibilities of the
contracting authority and the private party; specify the relevant
financial terms; ensure the management of performance
of the private party; provide for the return of any assets to
the contracting authority at the termination or expiry of the
agreement; provide for the sharing of risks between the parties;
provide for the payment of compensation to the private party
from a revenue fund or of charges or fees collected by the
private party from users or customers of a service provided by
it; provide for its duration and contain such other information as
may be prescribed. Every agreement must be governed by the
laws of Mauritius and disputes shall be settled by arbitration.
An aerial view of Port Louis, Mauritius.
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A guide to PPP in Africa
Key statistics
Area
801,590 sq.km (2014)
Population
26.47 million (2014)
GDP
US$16.39 billion (2014)
GDP per capita
US$457,37 (2014)
GDP growth
8% (2014)
Infrastructure Landscape and Context
Number of projects ongoing
Between five and ten
Funding
Word Bank, Development Finance Institutions and Private Sector
Key players
Public Sector
Needs of the region
Energy and Power (production, transportation and supply),
Transport (roads, railroads and ports), Agriculture, Housing, Health
and Education.
Law
–– Law no. 15/2011 of 10 August – Public-Private Partnerships
(PPP), Large-scale Projects (LSP) and Business Concessions
(BC) Law – which establishes the guiding rules for the process
of contracting, implementing and monitoring undertakings of
PPPs, LSPs and BCs.
Regulation
–– Decree no. 16/2012 of 4 July – Regulation on PPPs, LSPs and
BCs Law
–– Decree no. 69/2013 of 20 December – Regulation on PPPs and
BCs of Small Dimension.
Mozambique
FCB&A – AG Advogados
Legal and Regulatory Framework
43. 41
A guide to PPP in Africa
PPP Process
Definitions
According to its legal definition, a PPP is an undertaking in a public
domain area (excluding that of mineral and petroleum resources)
or in an area of provision of public services, in which, under
contract and with financing of the private partner, in full or in part,
the private partner agrees to undertake the necessary investment
and to operate the respective activity for the efficient provision of
public services and goods.
In contrast, an undertaking whose purpose is the prospecting,
exploration, extraction and/or use of natural resources or other
resources or national property assets falls within the scope of the
BC definition.
However, since the legal definition of LSP comprises the
undertaking of an investment authorised or contracted by the
Government, the value of which exceeds US$358 million, both
PPP and BC undertakings may be qualified as LSPs if the respective
investment amount exceeds the above-mentioned cap.
Implementing entity
The implementing entity of a PPP, LSP and BC venture shall (i)
take the form of a commercial company, (ii) have as corporate
purpose the implementation of the respective venture and (iii)
be incorporated for a duration not less than that of the contract
related to the venture.
PPP procedure
The standard model adopted for the procurement of PPPs is
through a public tender. However, for reasons of public interest
and provided all legal requirements are met, PPPs may be awarded
through limited tender with prior qualification or by a two-round
tender.
In duly substantiated cases and as measure of last resort (subject
to the prior express authorisation from the Government), the
contracting of PPPs may, exceptionally, adopt the form of
negotiated procedure or private treaty.
From a contractual point of view, PPP undertakings may adopt one
of the following contractual forms:
–– Concession contract,
–– Assignment of Operation contract, or
–– Management contract.
Within Concession contracts, the following types are envisaged:
–– Build, operate and Transfer (BOT),
–– Design, Build, Operate and Transfer (DBOT),
–– Build, Own, Operate and Transfer (BOOT),
–– Design, Build, Own, Operate and Transfer (DBOOT),
–– Rehabilitate, Operate and Transfer (ROT), or
–– Rehabilitate, Own, Operate and Transfer (ROOT).
The duration of the PPP contract is determined taking into
consideration its economic and financial attractiveness, the time
required for its implementation and the recovery period of the
capital invested, without exceeding, in any case, a maximum of:
–– 30 years, for concession contracts regarding undertakings to be
planned and developed from the ground up,
–– 20 years, for contracts of concession or of assignment of
operations concerning existing ventures requiring rehabilitation
or expansion, or
–– 10 years, for management contracts regarding undertakings in
operational status.
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The above-mentioned time limits may be subject to extension
under certain conditions, associated with the size and complexity
of the undertaking or with the need to ensure the compensation
of additional investments.
After the above-mentioned deadlines, a public tender for a
new contracting of the venture shall take place, in which the
entity previously contracted will have a pre-emption right and
preference margin of 5%, provided that it has registered good
performance in the execution of the previous contract and the
new proposal does not contain terms less favorable than the initial
contract.
The main contract terms are subject to publication at the
Government Official Gazette (Boletim da República) and the
Government website. Financial statements and reports regarding
the activity of the venture are also subject to publication.
The contracting entity has the right of redemption of the contract,
on the basis of reasons of public interest duly substantiated
pursuant to the law and the contractual arrangements that have
been agreed.
The redemption for reasons not attributable to the private
partner give rise to compensation, calculated by taking into
account the pending recovery period of the capital invested and
the undertaking level of return, without prejudice to the criteria
established in the contract.
Main Financial Benefits
The financial benefits to Mozambique flowing from PPPs must be
expressly referred to in the relevant contract and include:
–– the opportunity of a holding of no less than 5% nor more than
20% in the share capital of the implementing entity (regardless
of the involvement of foreign capital) to be allocated for sale,
through the stock market and under market terms, preferentially
in favor of Mozambican individuals, and
–– the opportunity for Mozambican public or private legal persons
to participate in the share capital of the concessionaire, under
the terms negotiated and agreed upon by the parties, without
prejudice to the provisions of the previous paragraph.
For the purposes of the preceding points, it should be noted that
the regulation of the Law further establishes that the State reserves
the right to negotiate a free carry stake of at least 5% in the share
capital of the concessionaire.
Minimum annual value: the State’s financial benefits annual value,
including those arising from its share capital on the implementing
entity and from tax revenues, cannot, in any event, be less than 35%
of the undertaking’s annual profit determined for tax purposes.
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Ongoing PPP Projects
1. N4 Toll Road Rehabilitation
Year: 1995 to present
Value: The contract for the N4 Toll Road is for US$660 million
(1996 value) over 30 years, with a total of US$330 million allocated
for the initial three-and-a-half years.
Sector: Roads
Details: Part of the Maputo Development Corridor Project. The
corridor will run from Johannesburg to Maputo in Mozambique.
The contract for the agreement was valued at USD$6 billion over
30 years. The debt investors include South Africa’s four major
banks and the Development Bank of Southern Africa.
2. Mphanda-Nkuwa Power Plant
Approximate value of the project is US$3 billion
Project preparation start date: 2006
Expecting project completion date: 2017
Sector: Energy
Details: The plant will be developed in the Tete Province and
provide an additional 1,500MW of power for Mozambique. Its
Framework Agreement was entered into in 2007 with an estimated
project cost of almost US$3 million.
3. Zambeze River and Roads’s PPP
Year: 2010
Capital Value: US$118 million
Sector: Roads
Details: A 30-year concession for the conception, construction,
financing, operation and maintenance of a new 16km bridge over the
River Zambeze, in the Tete Province, as well as rehabilitation, financing,
operation and maintenance of 680km of roads in the region.
The concession contract was signed in 2010 and the bridged was
opened in December 2014.
The revenues will come from road taxes and the tolls applying to
the two bridges.
Obstacles / Challenges
1. Market demand: due to Mozambique’s natural gas, coal and
other commodity reserves, the country faces the challenge of
integrating capital-intensive megaprojects within a brief time
window, which does not allow local authorities and companies
enough time to provide themselves with the necessary legal,
technical and financial means.
2. Capacity building: the country’s specialised and skilled
labour is unable to meet demands of the sector (e.g. gas and
mining) and the consensus is that further sector growth will most
likely exacerbate the lack of adequate educational and training
infrastructure even further. As a result, the country’s educational
infrastructure is undergoing significant expansion and major
rehabilitation, led by the private sector.
3. Politics: after winning the presidential election in October
2014, Filipe Nyusi won the election as Frelimo’s president in March
2015, which grants him a strong mandate to govern. Nyusi has
been able to maintain a constructive dialogue with the historical
opposition party RENAMO. Yet the Government relation with
RENAMO is still a matter pending a definitive solution.
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Niger
SCP Yankori
Infrastructure Landscape and Context
Number of projects ongoing
13 public-private partnership projects have been signed and are
ongoing for a total cost of 1,377 billion CFA francs.
Key players
1. For public service delegations
The Public Procurement Regulatory Agency: independent
administrative authority specifically responsible for arbitration of
disputes regarding performance.
The National Regulatory Council: policy- and decision-making
body of the Public Procurement Regulatory Agency.
The General management of public procurement control in
charge of controlling the procedure.
Key statistics
Area
1,267,000 km²
Population
17.83 million (2013)
GDP
US$7.407 billion (2013)
GDP per capita
US$415.42 (2013)
GDP growth
6.9% annual variation
(2014)
2. For public-private partnerships
The Prime Minister oversees public-private partnerships. This
power gives him a right of veto on the use of a public-private
partnership for a project (art.3 of Decree n°2011-559).
The Public-Private Partnership Support Unit (CAPPP):
organisation providing support to public administrations in
the preparation of partnership contracts. The CAPPP was set
up in 2012. The aim of this unit is to examine the compliance
of the project with State policies on economic development,
environmental standards, sanitation and development of the
territory. In this respect, it provides support to technical ministries
and public administrations in the development, negotiation and
monitoring of public-private partnership projects.
Needs of the region: The Government has prioritised projects in
the Construction (17 projects), Energy (2), Transport (6), Education
(3), Health (1), Hydraulic (1) and Telecommunication (2) sectors.
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Legal and Regulatory Framework
–– Constitution of 25 November 2010
–– Programme for the Renewal of Niger launched in 2011 by
the President of the Republic Mahamadou Issoufou. This
programme centres on eight axes and encourages the use
of public-private partnerships
–– Programme for Economic and Social Development (PDES) for
the period from 2012 to 2015 with a Priority Action Plan (PAP)
–– An Acceleration Plan 2014-2015, for road, energy and rail
infrastructures and the development of basic social sectors
has been implemented
–– Sustainable Development and Inclusive Growth (SDDCI)
“Niger 2035”.
For public service delegations
–– Directive 04/2005/CM/UEMOA of 9 December 2005 on
procedures for award, performance and regulation of public
procurements and public service delegations in the West
African Economic and Monetary Union
–– Directive 05/2005/CM/UEMOA of 9 December 2005 on the
oversight and regulation of public procurements and public
service delegations in the West African Economic and Monetary
Union
–– Law 2011-37 of 28 October 2011 on general principles,
oversight and regulation of public procurements and public
service delegations in Niger.
–– Decree 2013-570/PRN/PM of 20 December 2013 on special
rules for procurement of work, equipment, supply and services
for the needs of defence and national security
–– Decree 2013-569/PRN/PM of 20 December 2013 setting out the
public procurements and public service delegations code
–– Decree 2014-127 /PRN/PM of 26 February 2014 completing
the decree 569/PRN/PM of 20 December 2013 setting out the
public procurement and public service delegations code and
determining wrongdoings and the relevant penalties in the area
of public procurements
–– Decree 2011-688/PRN/PM of 29 December 2011 on the code
of ethics of public procurements and public service delegations
–– Decree 2011-687/PRN/PM of 29 December 2011 on the
attribution, composition and functioning of the public
procurement regulation authority
–– Decree 0037/CAB/PM/ARMP of 21 January 2014 which sets the
thresholds governing the awarding and performance of public
procurements and public service delegations
–– Decree 0036 /CAB/PM/ARMP of 21 January 2014 which sets
the rules of signature and approval of public procurement and
public service delegations
–– Decree 0034 /CAB/PM/ARMP of 21January 2014 which sets
out the timelines of public procurement and public service
delegations
For Public-Private Partnerships
–– Order 2011-07 of 16 September 2011 on the General Regime for
Public-Private Partnerships in the Republic of Niger.
–– Law 2011-30 of 25 October 2011 ratifying Order 2011-07
–– Decree 2011-559/PRN/PM of 9 November 2011 on the
conditions for application of Order 2011-07 of 16 September
2011 setting the General Regime for Public-Private Partnership
contracts in the Republic of Niger
–– Decree 2011-56OIPRNIPM of 9 November 2011 on the
organisation and operation of the Public-Private Partnership
Support Unit in the Republic of Niger
–– Law 2014-02 of 31 March 2014 on the taxation, finance and
accounting scheme applicable to public-private partnership
contracts
–– Statement Document for the five years of implementation of
the Renewal Programme (April 2011 December 2015) which,
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specifically, carries out a situational analysis of projects under
public-private partnership contracts.
PPP Process
For public service delegations
Irrespective of the amount, procedures for the award of public
service delegations are subject to the following general principles:
–– The economy and efficiency of the acquisition process
–– Free access to public procurement
–– Equality of treatment of applicants
–– Mutual recognition, and
–– Procedural transparency.
The selection of the private partner is subject to a competitive
procedure preceded by pre-qualification to identify potential
contractors offering adequate technical and financial guarantees
and having the capacity to ensure the continuity of the public
service they are providing.
After pre-qualification, in principle, a tender procedure is
implemented.
For public-private partnerships
Minimum investment threshold
Only projects with a completion cost equal to or above US$9
million can be carried out under a public-private partnership
contract (art.2 Decree 2011-559).
Preliminary recourse to a legal, technical, financial and
economic assessment
Recourse to a public-private contract only after a legal, technical,
financial and economic assessment of the project. The conditions
of this assessment are set out in detail in Decree 2011-559.
The assessment should demonstrate the complex character,
urgency and legal, technical, financial and economic feasibility
of the aforementioned project. The Decree does not stipulate
whether or not these conditions are cumulative.
The assessment is divided into four stages:
–– initiation of the project
–– feasibility study
–– assessment of the expert organisation, and
–– the opinion on budgetary sustainability of the minister in charge
of finances, in the event that the project is financed.
The selection of the co-contracting party – procedure in
principle
In principle, the awarding of a public-private partnership
contract is subject to an obligation of a competitive procedure
to guarantee free access, equality of treatment of applicants and
procedural objectivity.
The drafting of the Decree is unclear on this subject, but it would
appear that the procedure for award in principle should be either
an open or restricted call for tenders.
Selection should follow the following stages:
–– a call for expression of interest
–– a presentation, the content of which is not specified
–– pre-qualification
–– adjudication
–– notification of results
–– negotiation of the contract
–– signature of the contract.