1. African Ports and Maritime Conference – IFC Port Presentation
November 28-30, 2011
Méhita F. Sylla
IFC Infrastructure Advisory Services

2. Overview of IFC’s Advisory Services
Agenda
Overview of IFC’s Advisory Services
Private Sector Participation in the Port Sector
IFC Approach to PPP Transactions
IFC Experience in Port Transactions

3. IFC is a Member of the World Bank Group
IBRD
International Bank for Reconstruction and Development
IDA
International Development
Association
IFC
International Finance Corporation
MIGA
Multilateral Investment and Guarantee Agency
Est. 1945
Est. 1960
Est. 1956
Est. 1988
To promote institutional, legal and regulatory reform
Governments of member countries with per capita income between $1,025 and $6,055.
- Technical assistance
- Loans
- Policy Advice
To promote institutional, legal and regulatory reform
Governments of poorest countries with per capita income of less than $1,025
- Technical assistance
- Interest Free Loans
- Policy Advice
Role:
To promote private sector development
Private companies and Governments in 179 member countries
- Equity / Quasi-Equity
- Long-term Loans
- Risk Management
- Advisory Services
To reduce political investment risk
Foreign investors in member countries
- Political Risk Insurance
Clients:
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 businesses
Environment & Social Sustainability
Access to Finance
Business Environment
Public-Private Partnerships
Enterprise Assistance
Advisory services to governments and businesses
World’s largest multilateral provider of financing for private enterprises
$38+ billion in investment commitments

5. IFC’s Infrastructure Advisory Services
Successful Mandates in Africa
Public-Private Partnerships (PPPs)
IFC helps governments to increase the quality and availability of public services and infrastructure using the PPP model
IFC has global experience in PPPs for transport (roads, airports, rail, ports, etc.), water and sanitation, health and education, power, mining, and many other areas
Governments 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 project
Benin Port
Cameroon: power
Kenya Airways
Kenya Safaricom
Kenya Telecoms
Kenya Uganda Railways
Lesotho Hospital
Madagascar Tamatave Port
Mauritania Telecoms
Mozambique Moatize
South African National Parks
Sierra Leone Hotel
Uganda Telecom

6. Private Sector Participation in the Port Sector
Agenda
Overview of IFC’s Advisory Services
Private Sector Participation in the Port Sector
IFC Approach to PPP Transactions
IFC Experience in Port Transactions

7. Private Sector Participation Overview
Key factors defining type of private participation include:
Port Ownership
Role of Port Authorities
Relationship between the public and private sectors and their respective roles
Most 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 & efficiency
A 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 function
Policy-making, planning and development function
Traffic control, regulatory and surveillance function
Marketing, public relations and promotion function
Governments (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 governments
Access to private sector financing freeing Government budgets for social sectors
Introduction of Experienced Management and International Trade Benefits
Higher Efficiency through the involvement of the private sector
Platform 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
Agenda
Overview of IFC’s Advisory Services
Private Sector Participation in the Port Sector
IFC Approach to PPP Transactions
IFC Experience in Port Transactions

11. Full package of advisory services
Development of Privatisation Strategy

12. OurApproach Phase I: Preparation Phase II: Implementation Scope
Step 1
Scope
Mandate Design
Mandate
TORs
Work Plan
Trust Funds
Consultants
Kick-off
Step 2
Options
Diagnostic
Legal due diligence
Technical diagnosis
Market conditions
Demand projections
Capital investment
Regulatory framework
Potential investors
Strategic options
Step 3
Framework
Enabling Reforms
Legal (new laws)
Regulatory (agency)
Fiscal reforms
Triage
Retrenchment
Inst. Reinforcement
Communication
Financing
Step 4
Transaction
Pre-qualification
Info Memo
Data Room
Due diligence
Draft Contracts
Negotiations
Call for tender
Award
Closing

13. IFC Experience in Port Transactions
Agenda
Overview of IFC’s Advisory Services
Private Sector Participation in the Port Sector
IFC Approach to PPP Transactions
IFC Experience in Port Transactions

14. Concession of a Container Terminal Port of toamasina, Madagascar
Case Study # 1
Concession of a Container Terminal Port of toamasina, Madagascar

15. Toamasina – Map and Location

16. Transaction Structure (Cont’d)
Expected returns to Madagascar over the 20 years of the concession: efficiency gains, international best practices, investments
Estimated financial returns to Madagascar: US$ 300 million in investments and concession fees.
Tariff reduction: 20% (handling) and 10% for reception & delivery
Obligation to keep 350 employees for 5 years
Operator’s Obligations backed up by Performance Bond over the lifetime of the concession
June 2005: ICTSI Wins Madagascar Port Bidding
October 2005: Contract signing ceremony
Upfront payment (including asset acquisition): €10 million
US$36 million invested in container handling equipment

17. Toamasina – After Concession

18. Concession of a Container Terminal Port of Cotonou, Benin
Case Study #2
Concession 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 Faso
Current throughput of 300,000 teu /6.05 million tons.

20. Port of Cotonou – PPP Timetable
Nov 4, IFC signed mandate with Government of Benin
US$169 million grant by US Millennium Challenge Corp for port infrastructure required private operator for container terminal
MCC grant included 550 meter wharf for 540,000 teu container terminal
Nov May Market & technical studies, concession design
May- 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 charge
Investments first 5 years: US$42 million civil works/US$70 million equipment
Minimum 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 mandates
2009- Cotonou Port
2008 – Durres Port - Albania
2006- Toasmasina Port - Madagascar
2001 – Suape Port - Brazil
On Going Mandates and
2011- Nouakchott Port- Mauritania
2010- Vinzhijam Port, kerala – India
2008- Port Louis- Ile Maurice
Potential mandates
Bulk Terminal- India
Bar Port- Montenegro
Central America - 2 Ports
Caribbean

22. TO CONTACT US: THANK YOU!!!
Afrique Sub-Saharienne 14 Fricker Road Illovo Johannesburg South Africa Tel: (27-11) Fax: (27-11)
Siège Pennsylvania Avenue, N.W. Washington, D.C USA Tel: (202) Fax: (202)
Emmanuel Nyirinkindi Manager Sub-Saharan Africa, Telephone: (27)
Méhita Sylla Fanny Senior Investment Officer Telephone: (27)
Ramatou Magagi Senior Investment Officer Telephone:
THANK YOU!!!