Transcript Presentation title

G20 Africa Infrastructure Investment Conference
Infrastructure in Africa
Conflicts and Instability –
impact on and solutions for
development of infrastructure
19 July 2013
Old Kuala Lumpur
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Kuala Lumpur today – by night
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Kuala Lumpur today – by day – before a storm
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War – what is it good for – absolutely nothing!!
• Nearly half of the continent's 53 countries are home to an active conflict
or a recently ended one;
• Mali, Uganda, Niger, Boko Haram, Sudan, Somalia etc. etc.
• Quiet places such as Tanzania are the lonely exceptions;
• Even user-friendly, tourist-filled Kenya blew up in 2008;
• A death toll of tens of thousands of civilians each year;
• More than 5 million have died in Congo alone since 1998, the
International Rescue Committee has estimated;
• Boko Haram:
• 2011 Boko Haram struck 115 times and killed 550 people;
• UNCTAD report, FDI flows to Nigeria fell to $6.1 billion (N933.3 billion) in 2010, a decline of about
29 per cent from the $8.65 billion (N1.33 trillion) realized in 2009 fiscal year.
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Chin Peng
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Malayan (Malaysia!!!) emergency
• Cut the insurgents off from their supporters amongst the population;
• Establishment of new villages;
• Cutting off food supply;
• Winning hearts and minds (Sir Gerald Templar);
• Improving livelihood, education, food etc.;
• Building new infrastructure;
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The bad news…..
Investment is an aspect of financial tourism, it settles
where it finds peace!!
• War and conflict (usually) = no investment [Miners may be a different
breed!]
• Out of war:
• Poor regulatory framework;
• Poor governance;
• Low technical skills;
• High unemployment.
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…….. and the good news
• Out of chaos come opportunities.
• Many opportunities to make significant returns but investors still want
protection.
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The opportunity – Infrastructure
• Critical to economic growth;
• Low skills but high labour requirements = creation of employment:
• Absorb demobilised combatants and returning refugees;
• PR advantages – creation of employment;
• Builds political capital – next elections;
• Lays foundations for growth and development.
• Makeni, Sierra Leone – bio-energy/power/irrigation project 2011:
• former headquarters town of the rebel Revolutionary United Front (RUF);
• drove people away from their homes;
• burned down the government buildings, police stations and official residences
but left the ordinary houses intact;
• At end 2012, employed approximately 1,366 people;
• Will create about 2,000 jobs when fully operational.
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But who finances it and bears risks?
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Private sector…….
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What the UN says …..
• UN officials - development banks don’t assume enough of risk.
• Investors need more guarantees that their projects won’t suffer losses
from political or legal changes in Africa’s poorest nations - Mohamed ElAshry, a senior fellow at the United Nations Foundation.
• International institutions should shoulder more of those risks - Achim
Steiner, executive director of the UN Environment Program.
• “Public private partnerships are not working because of too much risk on
the private investors.” Achim Steiner again.
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Real change comes from within!
“Africa will conquer hunger when African governments give Africans
the tools and resources they need to feed themselves. Change - real
change - comes from within.”
Kanayo Nwanze, IFAD President
commenting on the situation in the Horn of Africa, 22 August 2011
“In Rwanda, we work to own our development process”
President Paul Kagame of Rwanda
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MIGA - aaaaah!!!
• Political risk insurance.
• Halo effect - MIGA’s status as a member of the World Bank Group and
its relationship with shareholder governments provides additional
leverage in protecting investments.
• Expensive (can be as high as 20-25% of loan amount).
• Stringent environmental criteria – Equator Principles/World Bank.
• Commercial PRI – more suited for smaller transactions with shorter lead
times, availability when financial close is uncertain/takes a long time is an
issue.
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Investment treaties
• Bilateral or multilateral.
• Varying levels of protection – do your DD.
• Governments – promote/sign investment treaties to encourage FDI.
• Investors look to countries with strong investment treaties.
• Analysis required.
• Contracting party?
• Investment structuring – e.g. through Mauritius.
19 July 2013
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Nigeria to Libya – Part 1
M
Michael Schabas - FCP
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Nigeria to Libya – Part 2 - Trans-Sahara 2020 Vision
LIBYA TO CALABAR
SHORTEST ROUTE
ACROSS WEST AFRICA
LINKS AFRICA’S
LARGEST WORKFORCE
TO THE WORLD’S
BUSIEST SHIPPING
ROUTES
NO MOUNTAINS, BUT
LOTS OF DESERT
$3 BILLION MORE?
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Africa needs a push
“Africa is rising, and it needs a push. The rest of the
world is languishing, and it too needs a push. Africa
needs the world, and the world needs Africa. Each
can give the other a push.”
AfDB President, Donald Kaberuka
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GDP
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Ride the bumps
"If you want to ride Africa’s business
boom, choose your country well and be
ready for bumps on the road. But the
momentum is upward and you will be
rewarded if you stay the course!!!"
REUTERS SUMMIT 2013 - Investing in Africa: mind the
bumps and rewards will come
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Dentons in Africa
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Dentons offices across the Globe
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Dentons in Africa
Africa presents some of the most dynamic markets in the world. At a time of
growth, positive change and new opportunities, you need an innovative team
with deep experience to help you achieve your goals.
Whether you are currently in Africa or have potential interests on the continent,
we are well positioned to fulfill a complete range of transactions and advisory
work. Our presence spans the continent's Anglophone, Francophone and
Lusophone regions, as well as the key commercial centers around the world
that engage in business and investment in Africa.
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What others say about us
• Best Pan-African Law Firm - Capital markets and corporate (third consecutive year) - emeafinance
magazine
• Best Law Firm in Africa 2011 - emeafinance magazine
• “The firm has a long history of involvement in Africa” and “also has an extensive network of
associated firms in Africa, giving clients access to substantial local expertise.” - client quote,
Chambers Global 2013 (independent legal guide)
• “Dentons has a really dedicated practice - they've been involved for a long time” - client quote,
Chambers Global 2013 (independent legal guide)
• “amazing lawyers” who have a "clear understanding of the challenges involved in working in
emerging markets” - Chambers 2013 (independent legal guide)
• “Established as one of the leaders for work in Africa” - Legal 500 (independent legal guide)
• “… has both the network and the ‘focus on the issues that define these jurisdictions’ to give it
a competitive edge in… Africa” - Legal 500 (independent legal guide)
• “Thanks to a strong network of associations… this experienced firm has the ability to provide
seamless, high-quality advice throughout the continent” - Legal 500 (independent legal guide
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The poor will have nothing to eat but the rich!!!
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Raj Kulasingam
Raj specialises in infrastructure and utility projects in the
power, transport (road and rail), water, waste and oil and gas
sectors. He has deep understanding and experience of
concessions and the regulation of the utility and transport
sectors and PFI/PPP projects. He has been advising on
PFI/PPP projects since 1995 and has advised on numerous
ground breaking PFI/PPP projects in the UK, Middle East, Far
East and Africa acting for a mixture of developers, sponsors,
lenders and governments.
Raj Kulasingam
Dentons
Energy Infrastructure and Project Finance
Phone: +44 20 7246 7596
Email: [email protected]
He has been working on projects in Africa since 2005 and is a
frequent speaker and commentator on Africa related issues.
He is frequently on the ground in Africa and writes a monthly
column on PPP/infrastructure projects in a leading Nigerian
journal (Financial Nigeria).
His current work includes advising on the Blue Line Metro
Project in Nigeria, an investment in an IPP in Nigeria, a police
PPP project in Uganda, a Nigerian oil and gas IPO, a hydro
project in Zambia and a sulfation plant in Malaysia.
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Thank you
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