Presentation on theme: "African Ports and Maritime Conference – IFC Port Presentation"— Presentation transcript:
1 African Ports and Maritime Conference – IFC Port Presentation November 28-30, 2011Méhita F. SyllaIFC Infrastructure Advisory Services
2 Overview of IFC’s Advisory Services AgendaOverview of IFC’s Advisory ServicesPrivate Sector Participation in the Port SectorIFC Approach to PPP TransactionsIFC Experience in Port Transactions
3 IFC is a Member of the World Bank Group IBRDInternational Bank for Reconstruction and DevelopmentIDAInternational DevelopmentAssociationIFCInternational Finance CorporationMIGAMultilateral Investment and Guarantee AgencyEst. 1945Est. 1960Est. 1956Est. 1988To promote institutional, legal and regulatory reformGovernments of member countries with per capita income between $1,025 and $6,055.- Technical assistance- Loans- Policy AdviceTo promote institutional, legal and regulatory reformGovernments of poorest countries with per capita income of less than $1,025- Technical assistance- Interest Free Loans- Policy AdviceRole:To promote private sector developmentPrivate companies and Governments in 179 member countries- Equity / Quasi-Equity- Long-term Loans- Risk Management- Advisory ServicesTo reduce political investment riskForeign investors in member countries- Political Risk InsuranceClients:Products:Shared Mission: To Promote Economic Development and Reduce Poverty
4 IFC’s Role Advisory Services and Financing IFC also provides advice to governments and businessesEnvironment & Social SustainabilityAccess to FinanceBusiness EnvironmentPublic-Private PartnershipsEnterprise AssistanceAdvisory services to governments and businessesWorld’s largest multilateral provider of financing for private enterprises$38+ billion in investment commitments
5 IFC’s Infrastructure Advisory Services Successful Mandates in AfricaPublic-Private Partnerships (PPPs)IFC helps governments to increase the quality and availability of public services and infrastructure using the PPP modelIFC has global experience in PPPs for transport (roads, airports, rail, ports, etc.), water and sanitation, health and education, power, mining, and many other areasGovernments rely on IFC to structure PPPs that cost-effectively meet public needs with well-qualified private partners.Private partners trust IFC to construct a balanced and bankable projectBenin PortCameroon: powerKenya AirwaysKenya SafaricomKenya TelecomsKenya Uganda RailwaysLesotho HospitalMadagascar Tamatave PortMauritania TelecomsMozambique MoatizeSouth African National ParksSierra Leone HotelUganda Telecom
6 Private Sector Participation in the Port Sector AgendaOverview of IFC’s Advisory ServicesPrivate Sector Participation in the Port SectorIFC Approach to PPP TransactionsIFC Experience in Port Transactions
7 Private Sector Participation Overview Key factors defining type of private participation include:Port OwnershipRole of Port AuthoritiesRelationship between the public and private sectors and their respective rolesMost port “privatizations” have tended towards transferring selected port services and/or assets to private or mixed economy companies by means of restrictive leasing, licensing or concessionary contracts.
8 Role of Port Authority after PSP – retains abilities to control property rights, planning & efficiencyA modern Port Authority, acting in close cooperation with private sector companies, typically concentrates its efforts on the efficient performance of a number of fundamental functions, including:Landlord and performance monitoring functionPolicy-making, planning and development functionTraffic control, regulatory and surveillance functionMarketing, public relations and promotion functionGovernments (and port authorities) also retain the responsibility for formulating a policy and/or regulatory reform agenda to serve as an effective basis for private sector involvement, which have often included difficult and transforming legislative, institutional and procedural changes.
9 Governments benefit from Private Sector Participation Potential for new revenue streams for governmentsAccess to private sector financing freeing Government budgets for social sectorsIntroduction of Experienced Management and International Trade BenefitsHigher Efficiency through the involvement of the private sectorPlatform for Government Trade Strategies: Establishing a supportive environment and platform for an export-focused economy, and lowering the artificial costs of imported raw materials.
10 IFC Approach to PPP Transactions AgendaOverview of IFC’s Advisory ServicesPrivate Sector Participation in the Port SectorIFC Approach to PPP TransactionsIFC Experience in Port Transactions
11 Full package of advisory services Development of Privatisation Strategy
16 Transaction Structure (Cont’d) Expected returns to Madagascar over the 20 years of the concession: efficiency gains, international best practices, investmentsEstimated financial returns to Madagascar: US$ 300 million in investments and concession fees.Tariff reduction: 20% (handling) and 10% for reception & deliveryObligation to keep 350 employees for 5 yearsOperator’s Obligations backed up by Performance Bond over the lifetime of the concessionJune 2005: ICTSI Wins Madagascar Port BiddingOctober 2005: Contract signing ceremonyUpfront payment (including asset acquisition): €10 millionUS$36 million invested in container handling equipment
18 Concession of a Container Terminal Port of Cotonou, Benin Case Study #2Concession of a Container Terminal Port of Cotonou, Benin
19 Port of Cotonou - Benin Benin located to west of Nigeria. Small seacoast but road links to landlocked Mali, Niger, Burkina FasoCurrent throughput of 300,000 teu /6.05 million tons.
20 Port of Cotonou – PPP Timetable Nov 4, IFC signed mandate with Government of BeninUS$169 million grant by US Millennium Challenge Corp for port infrastructure required private operator for container terminalMCC grant included 550 meter wharf for 540,000 teu container terminalNov May Market & technical studies, concession designMay- June-July 2009 – Prequalification- Bid Preparation. Bid criteria published: Highest NPV for upfront payment and guaranteed annual throughput charges.August Groupement Bollere awarded 25-year concession.September Concession contract signed. Terms included:Upfront payment of US$33 million, $29/teu throughput chargeInvestments first 5 years: US$42 million civil works/US$70 million equipmentMinimum volume guarantees (400,304 Year 1 to 723,056 Year 8)Minimal tariff regulation. Flexible labor policies.Government obligation to deepen and dredge channel
21 IFC Infrastructure Advisory Services – Port Projects Completed mandates2009- Cotonou Port2008 – Durres Port - Albania2006- Toasmasina Port - Madagascar2001 – Suape Port - BrazilOn Going Mandates and2011- Nouakchott Port- Mauritania2010- Vinzhijam Port, kerala – India2008- Port Louis- Ile MauricePotential mandatesBulk Terminal- IndiaBar Port- MontenegroCentral America - 2 PortsCaribbean