Presentation on theme: "African Ports and Maritime Conference – IFC Port Presentation Méhita F. Sylla IFC Infrastructure Advisory Services November 28-30, 2011."— Presentation transcript:
African Ports and Maritime Conference – IFC Port Presentation Méhita F. Sylla IFC Infrastructure Advisory Services November 28-30, 2011
2 Overview of IFC’s Advisory Services IFC Approach to PPP Transactions Private Sector Participation in the Port Sector Agenda IFC Experience in Port Transactions
3 IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment and Guarantee Agency 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 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 Est. 1945Est Est Est Role: Clients: Products: To promote institutional, legal and regulatory reform Governments of member countries with per capita income between $1,025 and $6, Technical assistance - Loans - Policy Advice IFC is a Member of the World Bank Group Shared Mission: To Promote Economic Development and Reduce Poverty
IFC’s Role IFC also provides advice to governments and businesses Environment & Social Sustainability Access to Finance Business Environment Public-Private Partnerships Enterprise Assistance World’s largest multilateral provider of financing for private enterprises $38+ billion in investment commitments Advisory services to governments and businesses Advisory Services and Financing
IFC’s Infrastructure Advisory Services 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 Successful Mandates in Africa
6 Overview of IFC’s Advisory Services Private Sector Participation in the Port Sector Agenda 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 Overview of IFC’s Advisory Services Private Sector Participation in the Port Sector Agenda 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 Step 1 Scope Mandate Design Mandate TORs Work Plan Trust Funds Consultants Kick-off 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 Step 2 Options Diagnostic Legal due diligence Technical diagnosis Market conditions Demand projections Capital investment Regulatory framework Potential investors Strategic options
13 Overview of IFC’s Advisory Services IFC Approach to PPP Transactions Private Sector Participation in the Port Sector Agenda IFC Experience in Port Transactions
14 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 Case Study #2 Concession of a Container Terminal Port of Cotonou, Benin
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. 19
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 Cotonou Port 2008 – Durres Port - Albania Toasmasina Port - Madagascar 2001 – Suape Port - Brazil On Going Mandates and Nouakchott Port- Mauritania Vinzhijam Port, kerala – India Port Louis- Ile Maurice Potential mandates Bulk Terminal- India Bar Port- Montenegro Central America - 2 Ports Caribbean