On Wednesday, 15 November 2017, COP23 will celebrate Africa Day, a joint initiative of the African Development Bank (AfDB), the African Union Commission (AUC), the United Nations Economic Commission for Africa (ECA) and the New Partnership for Africa’s Development (NEPAD).
Two years after the Paris Agreement was signed at COP21, Africa continues to consolidate its efforts, focusing particularly on partnerships to ensure that developed countries meet their responsibilities and commitments in terms of funding, and encouraging African nations to pursue a low-carbon development path and maintain their nationally determined contributions. All of this is in line with the roadmap for the African Union’s Agenda 2063, the UN’s Sustainable Development Goals and the African Development Bank’s High 5s.
The theme of this year’s Africa Day is therefore: “Partnerships to Implement the Paris Agreement: Africa’s Response”. The programme will focus on funding, capacity-building, development and technology transfer.
The Africa Day organised jointly by the AfDB, AUC, ECA and NEPAD at the request of African Heads of State, held at every COP since COP17 in Durban.
Egypt has seized the number one spot from South Africa as the most attractive investment destination on the continent, according to Rand Merchant Bank’s (RMB) Investment Attractiveness Index
For the first time, Nigeria and Algeria do not feature in the top 10 of the RMB’s Investment Attractiveness Index, which balances economic activity against the relative ease of doing business.
In RMB’s seventh edition of Where to Invest in Africa 2018, Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated over the past seven years. Despite mounting concerns over issues of institutional strength and governance, South Africa’s currency, equity, and capital markets keep the country a cut above the rest, with many African nations facing liquidity constraints.
Celeste Fauconnier, an analyst at RMB Africa, on Monday, said that some countries have been more nimble and effective than others in managing shortfalls.
“Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues,”
Fauconnier said. Earlier this month, both South Africa and Nigeria moved out of recession after improved second-quarter gross domestic product (GDP) data.
Earlier this year, audit firm EY in its Attractiveness Program Africa 2017 found that South Africa, Morocco, Egypt, Nigeria and Kenya collectively attracted 58 percent of the continent’s total FDI projects in 2016. South Africa saw an increase of 6.9percent in FDI projects in the period compared to 2015 – accounting for 20.6 percent of all projects undertaken in the continent in the period under review.
Surprisingly, Ethiopia, a country dogged by socio-political instability, displaced Ghana to take the fourth spot because of its rapid economic growth and brushed past Kenya as the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.
Kenya holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies, and brisk consumer spending growth. Business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania climb by two places to number seven.
Artistic Impression of the proposed 2nd Nyali Bridge.
Five (5) firms have applied for pre-qualification to bid for the planned 2nd Nyali Bridge in Mombasa. This follows the close of the Request for Qualification (RFQ) at the end of last week.
The project which will involve construction, operation and maintenance of a six-lane dual carriage bridge (three-lanes on either side) on a Public Private Partnership (PPP) basis and is under the mandate of Kenya Urban Roads Authority (KURA) which is the contracting authority.
The Transaction Advisory for the project is a consortium led by Deloitte (East Africa& India). Other member firms are Iseme Kamau& Maema Advocates, Cliffe Dekker Hofmeyr, H.P. Gauff Ingenieure and Earthcare Services.
The project is planned as a toll bridge, meaning motorists will pay to use the bridge which is expected to greatly enhance transport efficiency between the Island City of Mombasa and the Northern mainland through Nyali region. Feasibility studies have revealed this route has the highest vehicular traffic and therefore most critical in unlocking perennial traffic gridlocks in and around Mombasa City.
The Request for Qualification attracted firms from across the globe as follows:
Consortium of IHI, JOIN (Japan Overseas Infrastructure Investment Corporation for Transport& Urban Development) and Acciona
China Communication Construction Company (CCCC)
Strabag
Consortium of Vinci Highways and Meridiam
Consortium of Mota Engil Africa, AIIM, Egis and Orascom
According to Richard Kyalo, Manager (Transport Economics) at KURA, who chaired the Pre-Qualification Opening Committee, the response by 5 reputable international firms in the project is a sign of strong interest by the market on the project and a mark of confidence in the procurement process.
The 2nd Nyali Bridge Project is among major road projects earmarked for delivery through the PPP Model in the Country. This means a private sector player who wins the competitive tender process will raise financing, do the designs, undertake the construction and Maintenance of the facility and thereafter, get compensation from end user charges collected by the government on their behalf.
Firms pre-qualified at this stage will be invited to bid for the project (Request for Proposal, RFP) after which the eventual winning firm will be picked and awarded the contract to construct the bridge.
PPP Unit Director Eng. Stanley Kamau has hailed the PPP Model in delivery and maintenance of infrastructure in the country, as one which will enable mobilization of private capital as well as private sector efficiencies and innovation in delivering projects, hence accelerated development in the country.
‘Vision 2030 places a lot of emphasis on modernizing and maintaining our infrastructure for Kenya to become a middle-income state with high standards of living for her people. For this to happen, the government must partner with the private sector to undertake more infrastructure projects than those it can undertake while only relying on public financing. Further, we must seek innovative means to better maintain the new infrastructure built’ noted the director’
The multi-million rand railway project will create thousands of jobs – 3,000 and 6,500 in each country respectively.
Transnet said on Friday that plans are well under way for its multi-million rand railway project Swaziland Railway.
South Africa and Swaziland signed the project Memorandum of Understanding in 2012 with the aim that the Swaziland Rail Link will also serve as back-up to the coal line. The partnership will see the construction of a 150 km railway line from Lothair in Mpumalanga to
Sidvokodvo in Swaziland.
The new line will be 50 km long in South Africa and 100 km in Swaziland and will also require the revamping of adjacent existing lines to align and provide support to the new link.
Transnet said that preparation work involves, land acquisition, graves relocation, acquisition of servitudes, resettlement planning, and completion of engineering designs.
The feasibility study report received a green light from both companies to proceed to the next
phase of the project packaged as a public-private partnership (ppp). The process of finding
suitable partners has already began.
Transnet said the project’s primary objective was to reduce rail and road traffic congestion based on a realistic
and achievable system capacity.
When completed the new line will accommodate
up to 26 tons/axle, 2.5km long/200 wagons trains and provide capacity for 12 trains per day.
Transnet said the project will result in a dedicated General Freight Business Corridor with estimated value of R894 million in
South Africa and R1.7 billion in Swaziland. It will create thousands of jobs – 3,000 and 6,500 in each country respectively.
The Swaziland Rail Link project is set to create more than 9000 direct jobs as well as improve people’s lives, support regional integration in SADC and accentuate the promotion of intra-Africa trade and economic sustainability.
This is the view of Transnet Rail Freight Chief Executive Officer, Ravi Nair. According to Nair, approximately 3000 and 6500 jobs will be created in South Africa and Swaziland individually during the construction of the Swaziland Railway line.
The Swaziland Rail Link entails the construction of a 150 kilometre new railway line from Lothair in South Africa to Sidvokodvo in Swaziland and the revamping of two existing lines in both countries.
“This line has been designed to carry 150 general freight wagons at a time and will be operated as a seamless service without stopping at any of the boarders either into Swaziland or out of Swaziland,” Nair said.
Full steam ahead
Nair explained that the feasibility phase has been completed and the project is now ready to be packaged to take to the market to look at public-private partnerships.
The initial estimates from the study indicate that about R20 billion will be needed for the project. The bulk of the funds will go towards infrastructure and construction.
He added that the purchasing of the 506 hectares of land required on the South African side for this project has been approved and negotiations with the land owners was being finalised in order to purchase the impacted land.
“Furthermore, approval to exhume and relocate over 120 affected graves has also been obtained on the South African side.
The feasibility studies of the Greenfield are complete and authorities in South Africa and Swaziland have granted both teams with the necessary environmental permits.
Additionally, authorities in South Africa and Swaziland have granted the water use licenses, while the feasibility studies of the existing lines that need to be upgraded are in progress.
Reducing traffic and costs
Transnet said the project’s primary objective is to reduce rail and road traffic congestion based on a realistic and achievable system capacity.
Swaziland Railway Chief Executive Stephenson Ngubane said the joint project is going to bring a lot of benefits to Swaziland and South Africa.
“With this project the cost of transport will be reduced as it is more direct through Swaziland and more direct to the Ports of Richards Bay also including Mozambique at a later stage,” Ngubane said.
“This project is gaining momentum and we believe that as we prepare the presentation for funding it will be supported. We believe that the standard of the rail that we are going to be constructing is going to bring a lot of efficiency and capacity,” Ngubane said.
German industrial group Siemens and French rival Alstom agreed to merge their rail operations, creating a European champion to better withstand the international advance of China’s state-owned CRRC.
Siemens will own 50 percent plus a few shares of the joint venture, to be called Siemens Alstom, while Alstom will supply Henri Poupart-Lafarge as chief executive, helping to counter criticism that France is giving up control of another national industrial icon.
The non-executive chairman will come from Siemens.
German industrial group Siemens and French rival Alstom agreed to merge their rail operations, creating a European champion to better withstand the international advance of China’s state-owned CRRC.
Siemens will own 50 percent plus a few shares of the joint venture, to be called Siemens Alstom, while Alstom will supply Henri Poupart-Lafarge as chief executive, helping to counter criticism that France is giving up control of another national industrial icon.
The non-executive chairman will come from Siemens.
The framework deal, which still has to be approved by Alstom shareholders as well as regulators, is a Franco-German industrial breakthrough for French President Emmanuel Macron but is a move that has riled opposition politicians. Their worries centre on France losing control of its TGV high-speed train – a symbol of national pride that has highlighted French engineering skill – and possible job losses.
Finance Minister Bruno Le Maire said on Tuesday that the French government welcomed the planned tie-up, which he said would protect French jobs.
The French state said it would not exercise an option to buy a 20 percent stake in Alstom from industrial group Bouygues.
The Siemens and Alstom transport businesses span the iconic French TGV and German ICE high-speed trains as well as signalling and rail technology. They have combined sales of 15.3 billion euros ($18 billion) and earnings before interest and tax of 1.2 billion euros.
“This Franco-German merger of equals sends a strong signal in many ways. We put the European idea to work and together with our friends at Alstom, we are creating a new European champion in the rail industry for the long term,” said Siemens CEO Joe Kaeser.
Alstom’s Poupart-Lafarge said: “Today is a key moment in Alstom’s history, confirming its position as the platform for the rail sector consolidation.”
Analysts at Deutsche Bank kept a “hold” rating on Alstom shares, saying extracting cost savings from the deal could be tricky.
“Politicians will also likely try to ensure some form of jobs protection in France (28 percent of Alstom’s workforce) and Germany (39 percent of Siemens’workforce), making cost synergies difficult to extract,” they wrote in a note.
The deal leaves out in the cold Canadian transportation group Bombardier, which also held talks with Siemens, sources have said, and which faces a separate battle this week to protect jobs in Quebec and Northern Ireland.
China’s CRRC, with annual revenue of about $35 billion, is bigger than Siemens Mobility, the rail and infrastructure division of the German conglomerate, Alstom and Bombardier Transportation combined.
Previously focused on China, it has won projects in Britain and the Czech Republic in the past year, and is eyeing the United Kingdom’s High Speed 2 project, which will connect London with cities in the north of England.
Special dividends
Siemens will receive newly issued shares in the combined company representing 50 percent of Alstom’s share capital and warrants allowing it eventually to acquire another 2 percent of Alstom shares.
However, the deal prevents Siemens from owning more than 50.5 percent of Alstom for four years after closing, and includes “certain governance and organizational and employment protections”, Siemens and Alstom said in their statement.
The deal is unanimously supported by Alstom’s board, Siemens’ supervisory board and Alstom shareholder Bouygues, the companies said.
The French government acquired its option on the Bouygues stake in Alstom in 2014 as part of a deal that helped Alstom snub Siemens as a buyer for its energy business in favour of General Electric Co.
Macron was economy minister at the time.
The global headquarters, rolling stock business and stock-market listing of the new entity will be in Paris and the signalling and technology business in Berlin.
The new company, with 62,300 employees, targets synergies of 470 million euros four years at the latest after closing of the deal, which is expected at the end of 2018.
The companies said their operations were largely complementary, with Alstom present in growth markets in the Middle East and Africa, India, and Central and South America, while Siemens was strong in China, the United States and Russia.
Siemens CEO Kaeser said ahead of the signing of the memorandum of understanding he believed the scale of China’s CRRC left little room for regulators to oppose a deal.
“It always depends, but the facts are that there is a dominant player,” he told Reuters in an interview in New York.
Siemens stands to gain control of Alstom’s main business, since all of Alstom’s divisions deal with the railways and transportation industries. Existing Alstom shareholders will be paid two special dividends: a control premium of 4 euros per share to be paid shortly after closing of the transaction and an extraordinary dividend of up to 4 euros per share to be paid out of the proceeds of Alstom’s put options for its General Electric joint venture, “subject to the cash position of Alstom”.
Orascom Construction Limited (NASDAQ Dubai: OC; EGX: ORAS) announces that its 50:50 joint venture with FCC Aqualia, a subsidiary of FCC, has signed an engineering, procurement and construction (EPC) contract to build Abu Rawash Wastewater Treatment Plant in Egypt for approximately USD 320 million.
The facility will have a capacity of 1.6 million cubic meters per day, comprised of primary and secondary treatment units, and is planned to be constructed over phases in 37 months. Once complete, the facility will serve 6 million people.
In addition to the EPC scope, the joint venture will operate and maintain the facility for three years. This operation and maintenance scope highlights Orascom Construction’s strategy to grow a recurring income portfolio in the infrastructure sector.
A 50:50 joint venture between Orascom Construction and Aqualia New Europe is currently the co-owner and co-developer of New Cairo Wastewater Treatment Plant, Egypt’s first public private partnership.
Osama Bishai, CEO of Orascom Construction, commented, “This award confirms our ability to continue to secure quality contracts and underscores our strategy to focus on water-related projects, such as our two recently-signed water desalination plants, due to the strategic need of this sector in Egypt. We are also pleased to collaborate again with our partner FCC Aqualia, demonstrating our long-term successful relationship.”
Milverton Reynolds, managing director of the Development Bank of Jamaica (DBJ), announced yesterday that the Bank has received nine applications in response to the Government of Jamaica’s (GOJ) Request for Qualification (RFQ) for the Norman Manley International Airport (NMIA) public-private partnership project.Issued on February 20, 2017, the RFQ closed on May 1, 2017. Applications were submitted by Vinci Airports SAS; Cedicor SA; Acciona Concesiones SL; GMR Infrastructure Ltd; Zurich Airport; Grupo Aeroportuario Del Pacifico, SAB de CV; Corporacion del Este, SAS; EGIS Projects SA, and Jamaica Infra Development Partners Ltd.
The NMIA is owned by the Airports Authority of Jamaica (AAJ) and is currently operated by the NMIA Airports Ltd, a wholly owned subsidiary of the AAJ.
The Government of Jamaica is seeking a private sector partner to develop and manage the airport – the island’s second largest aviation hub – profitably.
Reynolds said that the NMIA Enterprise Team will now review and assess the submissions “to determine whether they are substantially responsive to the Government’s legal, technical and financial criteria as set out in the February 2017 RFQ”.
A previous round of applications in 2015 resulted in six companies qualifying, but later the process was aborted as none submitted final bids. Subsequently, the terms of the privatisation offer have been adjusted and a new RFQ issued.
“We expect that the list of pre-qualified firms will be announced by the Government within several weeks and a Request for Proposal issued to them in June,” he said.
Ai African Pension and Sovereign Wealth Fund Leaders Summit & Awards May 2018
2nd May 2017
The biggest names in sovereign wealth and pension funds gathered to hear the latest and greatest though leadership in the industry. Here, we unpack the highlights from the 2017 CEO African Pension and Sovereign Wealth Leaders Summit & Awards.
The theme of the Summit, was Facilitating Pension Fund Investment Partnerships with African Asset Owners’. The summit saw Ai’s impressive network of investment decision makers – representing trillions of dollars of assets – from the biggest global, US and African sovereign wealth and pension funds, gather at Ai’s invitation-only annual Asset Owners Summit to shape the next wave of institutional investment into the continent.
3rd May 2017
Infrastructure Investment Summit and Awards
The 3rd Annual Ai CEO Infrastructure Project Developers Summit, co-hosted with Africa 50, was not one to be missed, with some of the biggest names in politics and infrastructure investment focused on increasing the private capital flows to project development in Africa.
The Ai CEO Infrastructure Project Developers Summit lineup, represented a powerful amalgam of the key private sector leaders that have led, developed and financed the most notable and largest infrastructure projects on the continent over the last 10 years.
“We’re a $115 billion fund and we have a total alternatives allocation of 43%. We’re comfortable being a global investor… we began eliminating our home country bias about 15 years ago…”
Theresa Whitmarsh, Executive Directo of Washington State Investment Board, USA
