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Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Business Action Against Corruption:
High Level Panel Discussion
Sponsored By:
Forum Partners:
EurOil Limited
Lead Partner:
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Strengthening the Investment Climate: Creating an Enabling Environment
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair:Prof. Steve GodfreyManaging DirectorCommonwealth Business Council
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Koosum KalyanDirectorMTN Group
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Soji ApampaChief Executive OfficerConvention on Business Integrity
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Akere MunaVice-ChairTransparency International
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Amadou AliVice- Prime MinisterMinister of Justice, Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Launch of the Cameroon Investment Project Register
Sponsored By:
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Development Funding: Access to Finance, Building Infrastructure & Business
Enterprises
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Mathieu MandengManaging DirectorStandard Chartered, Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Thokoane TsoloHead- Africa UnitIndustrial Development Corporation
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Racine KaneChief Country EconomistAfrican Development Bank
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Essimi MenyeMinister of FinanceCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
The Mining Industry and Investment Prospects in Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Richard HoweManaging DirectorGeovic
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Don LewisChief Executive OfficerSundance Resources
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Dr Fuh Calistus GentryDeputy Minister of Industry, Mines & Technological DevelopmentCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Creating Public -Private Partnerships to Improve Business Environment
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Tagbo AgbazueDirectorAfrican Institute of Corporate Citizenship
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Jean –Michel LatuteChief Executive OfficerOrange, Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Christophe EkenPresidentChamber of Commerce
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Moise EkediPermanent SecretaryCameroon Business Forum, IFC
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Amadou AliVice- Prime Minister, Minister of Justice Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Essimi MenyeMinister of FinanceCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Growth from Employment Creation
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Christain Penda EkokaInternational ConsultantBusiness Development Service Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Foning FrancoisePresidentGroup of Cameroon Business Women
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Prof. Laurent Serge Etoundi NgoaMinister of Small & Medium Size Enterprises, Social Economy & HandicraftCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Public Private Partnerships : Accelerating Infrastructure Development
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Dr. Diane Acha – MorfawSolicitor & Barrister at LawBellah Chambers
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Pascal CollangeCountry DirectorAgence Française de Développement
Working for a Sustainable
and Inclusive Recovery :
the case of PPP
Cameroon Investment Forum
June 2009
Plan
• 1° What is AFD ?• 2° Our strategy to foster PPPs
• 3° Examples of PPPs in Cameroun
• 4° Other information about AFD
In 2008, AFD developed solutions to help
developing countries withstand crises
Economic, Energy
And Food Crises
Security Crisis
Climate Change Crisis
Social Crisis
THE NEED FOR A SUSTAINABLE AND INCLUSIVE
RECOVERY
Solutions Offered:
Funding Liquidity, Terms, Rates and Risk-sharing
“Green” and “Inclusive” Investments a Priority
New funding vehicles will address the crisis
• Highly-subsidized counter-cyclical loans
• Guarantees for bond issues
• Project to generate new sources of funding through new
savings and investment products for the general public
that would be used to finance development projects
Carry out the French President‟s “Initiative
for Africa” by supporting private enterprise
• PROPARCO increased its capital base to €500 million
and will triple its financing level to €4 billion over the
next five years
– A platform for private and public investors
• Creation of the €250 million FISEA Fund to invest in and
support African businesses
– Aims to create more than 100,000 jobs in Africa
• Creation of the ARIZ II Facility for AFD to guarantee up
to €750 million in loans
– In 2008, ARIZ II backed €75 million of new investments and
approximately 6,000 employees
AFD holistic approach to development
40%
30%
63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2004 2008 2011 Target
Economic Growth
Global Public Goods
Millennium Development Goals
AFD’s Commitments’ Direct Contribution to Strategic Development Goals
A global vision underpins
AFD‟s three strategic goals
Protecting Global Public GoodsNational SolidarityInternational Solidarity
AFD commitments reached €4.5 billion, of
which €1.56bn for Africa in 2008
€ 598
Mn
€ 789
Mn
• 1° What is AFD ?
• 2° Our strategy to foster PPPs• 3° Examples of PPPs in Cameroun
• 4° Other information about AFD
AFD‟s PPPs strategy
• AFD believes in the implementation of public
policies by the private sector all over the world
• AFD does not believe in a « one size fits all »
solution
• AFD supports and finances PPP designed to
fit specific situations with includes both
regional and sector-based specificities
• 5 examples in Cameroon
• 1° What is AFD ?
• 2° Our strategy to foster PPPs
• 3° Examples of PPPs in Cameroun• 4° Other information about AFD
Railways in Cameroon
• Private contract to run a public service
– Railway investment paid by Camrail (loan from AFD and EIB)
– Locomotives and cars paid by Camrail (loan from Proparco)
– Goods traffic is profitable but limited by physical capacity
– Passenger traffic is subsidised
– It works properly but pace of investment is too slow
• Amendment in 2008
– Railway investment paid by the State (loan from World Bank)
– Locomotives and cars paid by Camrail (loan from Proparco ?)
– Increased investment in infrastructure and cars will increase
transport capacity for goods
Water sanitation in Cameroon
• Creation of a public company that owns State
assets (Camwater)
• International bid to lease the network to a private
company. Moroccan CDE won and operates
technical and commercial issues
• Loans from European EIB and AFD to State /
Camwater to rehabilitate pipes, increase water
production and extend distribution network in
Yaounde and three regional towns
Power generation and delivery in Cameroon
• Private contract to run a public service– AES Sonel operates power generation, transportation and
delivery in Cameroon
– AES invests in power production up to a cap (1 000 MW) above which a new biding process is required
• Creation of EDC, a public company that owns State assets in the power sector– Property transfer to be organised
• Autoproducers are allowed, as well as private power producers which would sell to AES Sonel or big power consumers
• Proparco lends to AES Sonel and future private producers
• AFD is ready to lend to EDC subsidiaries
Dam to regulate river flows
• Although access to energy is an issue, only 3% of Cameroonian hydropower potential are currently equipped
• The Lom Pangar Dam will regulate the Sanaga river which will both increase the production of existing hydropower plants and enable the building of new hydropower capacity
• Estimated cost : 130-150 M€ including social and environmental aspects (30 to 50 M€), but excluding pipe line adaptation and hydropower generation
• Strategic infrastructure managed as a “cost centre” that will trigger investments in hydropower and industry (mainly power consuming aluminium production)
• Possibility of a “water tax” for the State (not considered for now)
• Creation of a public company (subsidiary of state owned EDC) that will sell water rights to private power companies (AES Sonel for existing hydropower plants and future hydropower self-producers)
2nd Bridge on the Woury river in Cameroon
• Only one bridge crosses the large Woury river that divides Douala and Southern Cameroon in two parts.
• Slowdowns hamper economic activity and create a social burden
• The unique route creates a strategic, economic and social issue
• Economic profitability of a second bridge is high, but financial returns would imply a toll gate (and more
slowdowns) or a fiscal toll (and complex negotiations)
• A PPIAF financed study concluded that an all public option would fit that case
• AFD agrees and considers a loan to Cameroon
• 1° What is AFD ?
• 2° Our strategy to foster PPPs
• 3° Examples of PPPs in Cameroun
• 4° Other information about AFD (as a
reminder)
2008 commitments will contribute to the
fight against poverty and inequalities
Action
Access to drinking water
Primary schooling
Improvements in housing
conditions for people in
poor neighborhoods
Improvements to health
care services, hospitals
and clinics
Impact
4.4 million people
7 million children
1 million people
2.1 million patients per
year
2008 commitments will contribute to
supporting economic growth
Action
Support for private enterprise
Create jobs in business, trade
and industry
Connection to telecommu-
nications networks
Construction and repair of
roads, railroads and tracks
Impact
80,000 firms
370,000 employees
5 million people
9.5 million people
2008 commitments will contribute to
protecting Global Public Goods
Action
Energy efficiency
Reducing and off-setting
AFD‟s own carbon
footprint
Impact
Save 3.3 million tons of
CO2 per year – the
equivalent of 1.2 million
vehicles‟ annual carbon
dioxide emissions
AFD‟s first purchase of
20K tons of carbon
credits to fight
deforestation in
Cambodia
Increase food security through a new
Fund for African Agriculture
• A year after the “hunger riots,” AFD is launching a new
fund together with the African Development Bank, the
International Fund for Agriculture and Kofi Annan‟s
“Alliance for a Green Revolution in Africa”
• The Fund for African Agriculture is targeted at private
firms and farmers‟ cooperatives that will increase and
diversify crop production in Africa
• The Fund will raise €200 million in the near term, with a
long-term goal of €500 million
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
BabissakanaCEOPrescriptor
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Sustaining Investment and Growth
PUBLIC PRIVATE
PARTNERSHIPS:
Accelerating Infrastructure
Development
YAOUNDE, le 17 juin 2009
Par
Babissakana
Chairman & CEO,
Prescriptor
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SOMMAIRE
1 – PPP et Financement de Projet
2 – Apport des PPP dans le
développement des Infrastructures
3 – Modèle camerounais des PPP
et ses limites
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1 – PPP ET FINANCEMENT DE PROJET
Fin
an
ce
me
nt-
Pro
jet:
Iso
lem
en
t et
rép
art
itio
n d
es
ris
qu
es
65 à 85%
15 à 35%
Société de Projet
Fonds propresPacte d'actionnaires
Dette sans recoursConvention Inter-créditeurs
Sponsor A Sponsor BSyndicat des banques
Institutions financières
OutputContrats d'achat
InputContrats
d'approvisionnement
Contrats de travail
Contrats de construction,
d'équipement, d'exploitation et de
maintenance
Gouvernement Local
Système légal, droits de propriété, regulation,
permis, certificats, contrats de concession
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1 – PPP ET FINANCEMENT DE PROJET
Fin
an
ce
me
nt-
Pro
jet:
Iso
lem
en
t et
rép
art
itio
n d
es
ris
qu
es
Fonds
propres
(15 à 35%)Société de
Projet
(65 à 85%) Crédits
sans
recours
Secteur public national Système financier national
* Etat * Banques et inst. Financières
* Investisseurs institutionnels * Marchés financiers
Secteur privé national Secteur financier international
* Fonds d'invest. et investisseurs * Banques
* Banques et inst. Financières * Institutions Financières
* Marchés financiers * Marchés financiers
* Fournisseurs et assimilés
Secteur privé et public international
* Fonds d'invest. et investisseurs
* Banques et inst. Financières
* Marchés financiers
* Fournisseurs et assimilés
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1 – PPP ET FINANCEMENT DE PROJET
Fin
an
ce
me
nt-
Pro
jet:
Str
uctu
re P
PP
Source: Banque Mondiale & PPIAF
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1 – PPP ET FINANCEMENT DE PROJET
Fin
an
ce
me
nt-
Pro
jet:
Str
uctu
re P
PP
Société de
Patrimoine
Société
d'Exploitation
Propriété ExploitationPropriété et exploitation
Schémas d'organisation
Modèle Moniste Modèle Dualiste
Société de Projet Unique
Exploitation &
Maintenance
Concept ou
DémarragePlanification
Ingénierie
détailléeConstruction
Mise en
service &
clôture Production
Développement ou
PréparationExécution
Processus de Management d'un
Projet de Construction
Fonds propres Fonds propres + Dettes
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2 – Apport des PPP dans le développement des
Infrastructures
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2 – Apport des PPP dans le développement des
Infrastructures
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2 – Apport des PPP dans le développement des
Infrastructures
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2 – Apport des PPP dans le développement des
Infrastructures
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2 – Apport des PPP dans le développement des
Infrastructures
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2 – Apport des PPP dans le développement des
Infrastructures
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2 – Apport des PPP dans le développement des
Infrastructures
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3 – Modèle camerounais des PPP et ses
limites
Loi N° 2006/012 du 29/12/2006 fixant le
régime général des CP
Loi N° 2008/9 du 16/07/2008 fixant le
régime fiscal, financier et comptable aux
CP
Décret n° 2008-35 du 23 janvier 2008 portant
organisation et fonctionnement du CARPA
Décret n° 2008/0115/PM du 24/01/2008
portant application de la loi N° 2006/012
CADRE JURIDIQUE DES PPP AU CAMEROUN
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3 – Modèle camerounais des PPP et ses
limites
Président
Secretariat
Technique
Comité d'Orientation
12 Experts Personnel administratif
Conseil d’Appui à la Réalisation des
Contrats de Partenariat
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ENCADREMENT ECONOMIQUE ET FINANCIER PAR
L’ETAT-STRATEGE
Merci de votre
aimable
attention
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Paul TasongDirector of Programming of Investments
Guy AbounaDirector of Infrastructure
PUBLIC PRIVATE PARTNERSHIPS:
ACCELERATING INFRASTRUCTURE
DEVELOPMENT
Jointly presented by:
Paul TASONG, Director of Programming of Public Investments
&
Guy ABOUNA, Director of Infrastructure
on behalf of
HE Louis Paul MOTAZE
Minister of Economy, Planning and regional Development
SUMMARY
1. Why accelerate the development of infrastructure?
2. How do we do it?
Impact of Infrastructure on Cameroon’s
economic growth and development
Cameroon’s economic growth ambitions have been
constrained by a number of factors such as:
1. Inadequate power supply (1% of GDP was lost in
2003 due to severe power cuts). Following serious
measures taken at the time to address this issue,
the impact of this energy backlog on growth has
come settle at 0.5% loss to date.
2. Other infrastructure shortages account for a loss of
some 0.4% of growth.
In the long run, we loose some 5% growth in ten
years.
Infrastructure represents an important issue in the
development process of Cameroon. Appropriate
infrastructure, as we know, leads to improvements in
social wellbeing and economic opportunities.
From the mid 80's to the mid 90's, Cameroon faced a
severe economic crisis that led to a strong
deterioration of its basic infrastructure (water
supply, electricity, transport and telecommunication
services). The economic recovery observed by
Cameroon since 1994 with an annual average growth
rate of 4% for the 10 yeas that ensued brings out the
problem of sustained infrastructure to support this
growth.
Development crossroad:
Upon admission to the HIPC initiative at the turn of
the century, Government was faced with making a
choice between pursuing economic growth as a tool
for development or developing with a human face.
A deliberate development policy choice was made,
to give priority to poverty alleviation, with emphasis
on the social sectors (mostly education and health)
as embedded in the PRSP.
Paradigm shift
Upon attainment of the completion point of the HIPC initiative in 2006, consensus was built around the fact that the concept of fighting poverty was relatively illusive.
The paradigm shift was established when the head of state instructed that economic growth should take centre stage.
Baseline consultations that followed this instruction, confirmed that the people of Cameroon preferred infrastructure development over the provision of other minor socio collective amenities.
A second generation PRSP, which is in its
validation phase affirms in very strong terms,
the need for infrastructure to booster
production in all sectors such as:
agriculture, tourism, animal husbandry,
mining, communication, industry, forest
exploitation, etc.
ASSUMPTIONS
NB -1: The social sectors stand to gain with
improved infrastructure.
NB -2: Geo-strategically, Cameroon is a
major trade junction between the central
African sub region (CEMAC and the larger
community extending to RDC and Angola),
and Nigeria.
NB -3: The several resources with which
Cameroon is so blessed have a ready market
in these neighbouring nations whose
population is well over 200 million.
CONCLUSION
Why do we have to accelerate
infrastructure development?
Because we have to return to economic
growth, so as provide better social
services, get the economy closer to full
employment of factors and foster
production and consumption.
Secteur Energie (1)
• Il s‟agira sur la base du Plan de
Développement du Secteur Energie PDSE
2035 de porter les capacités de production
du pays à 3000 MW en 2020.
• A court terme : Centrale thermique à fuel
lourd de 86 MW à Yassa, Centrale à gaz
de Kribi de 216 MW.
Secteur Energie (2)
• A moyen terme : Barrage de régulation de
Lom Pangar avec usine e pied de 25 MW ;
barrage hydroélectrique de Nachtigal de
280 MW ; barrage hydroélectrique de 900
MW à Song Mbengue ; barrages hydro
électriques de Colomines (12 MW), Bini à
Warak (75 MW), Mekim (10 MW) etc…
Secteur Energie (3)
• A long terme il s‟agira de valoriser les sites
de productions aux fins d„exportation par
interconnexion avec les pays voisins. :
Kikot (430 MW), Cholet/Dja (400MW),
Mamfe (123 MW), Noun Wouri (1200MW),
Grand Eweng (386 MW) pour ne citer que
les plus importants
Secteur Energie (4)
• Le coût global du programme décennal est
d‟environ 5800 milliards fcfa pour les
ouvrages de production et de transport et
663 milliards fcfa pour le programme
d‟électrification rurale. Plusieurs études de
faisabilité sont disponibles, certains projets
sont en stade d‟instruction avancée avec
des études techniques, économiques,
financières et environnementales.
Secteur routier (1)
• Il s‟agira sur la base du Plan Directeur Routier National
de doubler le linéaire de routes bitumées d‟ici 2020 sur
un rythme moyen de 450 km par an.
• Construction d‟un deuxième pont sur le Wouri afin de
conforter le statut de métropole sous régionale à la ville
de Douala, et surtout de contribuer à la facilitation de la
circulation pour les acteurs privés : ouvrage neuf mixte
routier/ferré d'environ 900 mètres comportant 2x2 voies
routières avec séparateur central et bande d'arrêt
d'Urgence (BAU) ou 2x3 voies avec une voie ferré pour
un coût d‟environ 80 milliards fcfa.
Secteur routier (2)
• Bitumage en 2x2 voies des axes
Yaoundé-Douala, Douala-Bafoussam,
Bafoussam-Yaoundé, Douala Limbé.
• Bitumage des corridors de développement
en Afrique Centrale, Yaoundé-Brazzaville,
Kribi-Bata, Kribi-Ebolowa, Réhabilitation
de Douala-Ndjamena, Douala-Bangui etc..
Secteur Transport (1)
• Il s‟agira sur la base du Schéma Directeur
Portuaire National qui définit la répartition
cohérente des installations portuaires pour
une optimisation de la desserte maritime
du pays.
• Construction du port en eau profonde de
Kribi pour environ 300 milliards
Secteur Transport (2)
• Construction du port en eau profonde de
Limbe croisement du schéma de
développement de l‟aire métropolitaine de
Douala, avec l‟approfondissement à -8 m
du chenal d‟accès au port de Douala.
• Construction en cours du Yard pétrolier de
Limbé
Secteur Transport (3)
• Il s‟agira sur la base du Plan Directeur
Ferroviaire National en cours d‟élaboration
de procéder à l‟aménagement de
nouvelles voies ferrées selon les
standards internationaux en la matière
pour faciliter l‟exploitation des ressources
minières et le développement de l‟industrie
minière (fer de Mbalam et filière bauxite
alumine-aluminium à partir de
l‟Adamaoua)
Secteur des TIC
La poursuite de l’extension du
backbone a fibre optique pour couvrir
le territoire national et au dela.
Secteur Développement urbain
et de l‟habitat
• La construction des logements sociaux
pour couvrir le déficit de 900 000 au
rythme de 90 000 par an
• L‟extension des voiries urbaines et
assainissement
Les outils d’acquisition de la commande
publique pour le Développement des
Infrastructures
• Le code des marchés publics
actuellement en relecture pour le
rendre plus efficace
• Les contrats de partenariats : outil de
couverture et de partage des risques
• Amélioration du climat des affaires
Thank you for your kind and keen attention
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Trade Liberalisation & Economic Growth: Strengthening Regional Markets
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Steve GodfreyManaging DirectorCommonwealth Business Council
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Leopold NgalleChairmanICCCameroon
CAMEROON INVESTMENT FORUM
Trade Liberalization & Economic Growth:
Strengthening Regional Markets
By Leopold Ekwa Ngalle, Chairman ICC Cameroon
CONTENT
Introduction Benefits of Liberalization
CEMAC: History and Composition
Assessing the State of CEMAC Strength
Weaknesses
The Way Forward Policy Recommendations
For Public Sector
For Private sector
Conclusion
Introduction
Trade Liberalization
- No or Low Tarriffs on imports and exports
- Elimination of Non-tarriff-barriers
- External: Trade quotas, Sanitary measures etc.
- Internal: Trade taxes, special tax on imports, subsidise etc.
Developing Countries account for 1/3 of world trade up from about ¼ in the early 1970s.
Trade between developing countries has grown rapidly, with 40% of their exports now going to other developing countries.
Benefits of Trade Liberalization
Trade opening (along with opening to foriegn direct investment) leads to economic growth. How?
These benefits can be divided into:
Static Gains:
Increased specialization based on comparative advantage (Competitive advantage)
Trade creation.
Dynamic Gains:
Increased investment
Faster productivity growth (economies of scale)
Acquisition of new technology from abroad.
Learning by doing (transfer of knowledge)
CEMAC Regional Market
Regional integration is a crucial factor for accelerating economic, social, cultural, and political development in Africa.
The Central African Economic and Monetary Community (CEMAC) was created in 1994 to replace the Customs and Economic Union of Central African States (UDEAC).
Comprises of 6 states in Central Africa; Cameroon, Gabon, Chad, Central African Republic, Equatorial Guinea, and Rep. Of Congo.
With the main objectives of a Customs Union (free movement of goods and people) and a Monetary Union.
Intra-regional trade is low at less than 10% of
GDP and less than 2% of total trade (WTO,
2007).
Assessing the State of CEMAC
What Works:
The Monetary Union (FCFA- reduction of transaction
cost)
Inflation below Euro area levels
Substantial increases in foreign exchange reserves.
Member economies grew at 3.0% in 2000, 5.4% in
2001, 4.5% in 2002 and 4.7% in 2003 reflecting
improved oil prices and government services.
Assessing the State of CEMAC
What Does Not Work:
Free mobility of goods and people across the borders is impeded by discretionary behaviour of customs officers and local authorities.
Internal linkages within the region are inadequate or none existent (poor roads, Air and Maritime)
Poor communication infrastructure
Compounded by numerous checkpoints, vigorous and long border checks
African Regional Trade
Characteristics
Assessing cont.
Poor implementation of regional trade policies
rules of origin, administrative hurdles
Red tape (bureaucracy – paperwork)
Weak and insufficient customs administration
(missclassification of imports and corruption
problems)
The Way Forward
WAY FORWARD
In strengthening our regional market, we have to
examine the following problems:
Regional Level:
Increase common budget to finance regional
projects (Regional Development Bank)
Create functional transport corridors (land, air (Air
CEMAC), sea, telecommunication)
Support investment and prioritize manufacturing and
processing industries.
Suppress all regional trade restrictions ( phasing out
remaing surcharges, determination of products
country of origin)
Way Forward Cont.
Institute regional policies that compensate the losers
of the integration process (Cotton/Chad,
Sugar/Gabon).
National level:
Change policies and regulations that prevent
efficient use of infrastructure or deter private
sector investments in building infrastructure.
Harmonized policies at national levels.
Educate and train immigration and customs officers
Private Sector:
There are some contributions that have been made by the private sector.
Conference of the Chamber of Commerce of CEMAC: meets 2-3 times yearly.
Sharing of Trade Fairs
Sharing of Missions
ICC Contribution: Conception of Incorterms, Provision of business tools, best business practices, Arbitration etc
ICC Africa Regional Coordination: Integration of policy and sharing of information at the African regional level.
END
Thank You for Your Kind Attention
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Luc Mbarga AtanganaMinister of TradeCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Parallel Sessions - Energy & Environment: A key Enabler of the Business Environment
Energy
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
John Griffith General ManagerEuroil
Energy & Power: A key enabler
of economic development
by
Chief Tabetando, Chairman, EurOil Limited
(Presented by John Griffith, General Manager, Bowleven,
West Africa)
Yaounde, 17th June 2009
OUTLINE:
• Definition and examples of catalysts of economic
development
• Relationship between energy and economic
development
• Some figures and indicators
• Challenges faced by Cameroon‟s energy sector
• A case study: The Tanzanian experience
• Conclusion
Definition of an Economic Enabler
An input or factor which:
• Boosts development and production of the original
resource
• Provide or stimulate regular income and new capital for
investment
• Attracts external financing – DFI by development banks
and foreign companies
• Generates additional economic activities which facilitate
development of new resources adding further value to
the Cameroon economy
Examples of Economic Enablers
• Social-enablers (education, health, poverty-reduction measures)
• Enablers of rapid economic development (technology and training of manpower)
• Agents of wealth creation (capital availability and access to finance)
• Enablers of government administration and service delivery (security and contract stability for FDI)
• Enabler of industrial development (energy and power)
• Enablers in the agriculture sector (capital and credit, fertilizers and other farming implements,)
• Drivers of private sector development (infrastructure, a conducive legislative and regulatory framework)
Relationship between Energy and
Economic Development
• The relationship is exponential not linear
• (Q1,...,Qm) = f(AxX1...XiE1...Ep)
• where Qi are various outputs (manufactured goods and
services) = Economic growth and added value
• Xi :various inputs (as capital, labor etc)
• Ei: energy inputs (coal, oil, etc)
• A: state of technology as defined by the total factor
productivity indicator
Plant Location Type
Efficienc
y
Capacity
, MW
Start
date
Decomm.
date
Song LouLou hydro 394
1980/81/86/8
8
Edea Edea hydro 263 1957/58/75
Oyomabang 1 Yaounde diesel 38.5% 12.5 2000/01
Oyomabang 2 Yaounde HFO 44.6% 19.5 2004
Bassa 2-3 Douala diesel 38.5% 9 1979 2008
Bassa 4-5 Douala diesel 38.5% 9.6 2001
Logbaba Douala diesel 38.5% 18 2000/01
Bafoussam 1-2 Bafoussam diesel 35% 9.3 1986 2015
Bafoussam 3 Bafoussam diesel 35% 4.7 2004
Limbé Limbé HFO 44.6% 85 2004
Total 824.6
Generation Mix in the S. Network (source: MINEE, 2007 )
Power Generation by Type in Cameroon
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2005 2010 2015 2020 2025 2030
GW
h
EMP Base Case DPES Min DPES Low
DPES Med DPES High
0
1000
2000
3000
4000
5000
6000
2005 2010 2015 2020 2025 2030
MW
EMP Base Case DPES Min DPES Low
DPES High DPES Med
Comparison of Demand Scenarios (Source: PDSE 2030, 2006)
Power Demand Forecasts to 2030
0
200
400
600
800
1000
1200
1400
16002
00
52
00
62
00
72
00
82
00
92
01
02
01
12
01
22
01
32
01
42
01
52
01
62
01
72
01
82
01
92
02
02
02
12
02
22
02
32
02
42
02
52
02
62
02
72
02
82
02
92
03
0
MW
EMP Supply DPES Supply DPES Demand EMP Demand
Demand-Supply Matching in DPES 2030 and EMP (courtesy PDSE 2030)
Projected New Demand-Supply
Matching to 2030
Project Location Start year Additional MW Required
Aluminium Sector (ALUCAM) I Edea 2010-
2011
275 (450 total)
Aluminium Sector II Kribi/ Limbé 2015 800
Aluminium Sector III Kribi/ Limbé 2020 500-900
Aluminium Sector IV Kribi/ Limbé 2025 450-850
CIMENCAM Douala 2010 3
CICAM TBC TBC 20
AFKO Cement Limbé 2007 6
Iron and Steel Kribi 2013 80-160
Agro-industrial development Benoue TBC 50
SONARA expansion I Limbé 2008 3
SONARA expansion II Limbé 2012 32
Wood Processing TBC TBC 50
Petrochemicals TBC TBC 20-30
Shipyard Limbé 2009 6
Kribi Port Kribi 2015 7
Exports N/A TBC N/A
List of Industrial Projects according to High Demand Scenario
(Courtesy IPA Energy Consulting, 2006)
New Industrial Power Needs – 2009 to 2025
Challenges Facing Cameroon’s
Energy Sector
• Demand for power is projected to double by 2025
• Current plans are to fill 80% of demand gap with hydro, which can suffer 40% downtime.
• Shortage of capital – direct foreign investment only
• Need for clarity in the role of the different government agencies and more than one Power Plan
• Limited and costly supplies of fossil fuels – gas is not yet on-stream
• Cameroon‟s hydrocarbon resources are lightly appraised.
• Technology transfer needs to be stepped up
• Future power needs for industry need definition
• Biomass resources – wood – depleting quickly
Tanzanian experience: Songo Songo Gas
The Details:
• Offshore Tanzania – Discovered by AGIP in 1974
• Appraised by TPDC (8 wells), 1978-82 – Approximately 800 BCF in place
• Project dormant 1982 to 1995 – No perceived market, no financing
• In 1995, Ocelot, Trans Canada Pipe and Government Agencies formed SONGAS to facilitate GTE project
• Financing secured from World Bank and European Development Bank – Oct 2001
• Construction started 2003, first gas mid 2004, now delivering 60 mm scf/day to Dar es Salaam
• For more details go to: www.tpdc-tz.com and www.songas.com
The Transformation:
• Pre July 2004 – Tanzania had 300MW hydro and 250MW imported HFO and Diesel power. Load Shedding up to 40%
• Today – All thermal power is gas at 400+MW base-load, hydro (>300MW) is peak producer. Excess gas is supplied direct to growing industrial base. Export to Kenya being discussed.
Songo Songo Gas – The Dar es Salaam
Off-Takers
Courtesy of ORCA Exploration - 2007
Songo Songo Gas – The Results So Far:-
Positive impacts of the project include:– Cut reliance on imported liquid fuel for power generation
– Reliable supply of cheap energy to reduce shortages and load shedding
– Encourage the development of new infrastructure and industrial activity
– Attracting new investment both domestic and foreign
– Generation of clean energy with positive environmental impacts
Lessons learnt: – Project development only possible with all stakeholders working
together with government agencies under a clear national power plan
– Financing of the construction of a complex value chain made possible by international development finance (World Bank, EDB)
Conclusions
Energy will be a powerful economic enabler if we have:
• State participation – A clearly defined power plan is essential. CGA and other Ministry initiatives a good start
• …But liberalizing the energy sector and cutting bureaucracy is equally essential
• Diversifying the energy sources makes the economy less vulnerable
• Use Cameroon gas for thermal power generation to cut the energy bill a clear option – but gas must be base-load
• Other uses for gas (LNG, direct export) must be part of the Master Plan – whichever is the strongest economic enabler
• Create an attractive environment for DFI
• Co-responsibility of stakeholders – respecting legal, social and
contractual responsibilities
• Replacing biomass and liquid hydrocarbon energy with gas will
benefit the environment
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Dudley Achu SamaExecutive First Technical Adviser Ministry of Energy and Water Resources Cameroon
COMMONWEALTH BUSINESS COUNCIL
3rd CAMEROON INVESTMENT FORUM
YAOUNDE, 16-18 JUNE 2009
ENERGY AND POWER: „A KEY
ENABLER OF THE BUSINESS
ENVIRONMENT’
By: The Ministry of Energy and
Water Resources (MINEE)
Yaounde, Cameroon
SUMMARY
1. Policy & market overview
2. Importance of Energy to the economy:
key examples
3. Updates on Energy Projects (focus on
power)
4. Pipeline of Investment Portfolios
5. Looking Ahead
I - POLICY & MARKET
OVERVIEW
I - POLICY & MARKET
OVERVIEWCameroon’s Energy policy centered on three
main goals:
1. Energy independence & universal access to clean forms of energy
2. Promote market competition and; where appropriate; provide targeted subsidies to low-income households towards productive uses
3. Ensure least-cost supply and under safe conditions, including consideration for protection of human health and the environment
I - POLICY & MARKET OVERVIEW –
Development strategies
• Electricity sector– Country‟s generation expansion strategy on long-term hinged on hydropower;
and thermal support from gas
– Projects are outcome of PSDP/PDSE 2030 (Nov.2006)– least cost portfolio
– Universal electrification is the main goal pursued by Govt
– Added-value natured of the sector to GDP formation must be sustained - as factor to attract other investments
• Oil & gas sector:– Indigenous reserves (upstream) provides the base supply
– Downstream infrastructure to cater for national demand/consumption in terms of oil products and gas derivates
• Key incentives (trans-sectoral) to support development and rational utilisation of resources
– Liberalisation policies targeting market competition for the supply chain;
– Regulatory support – to minimise/avoid monopoly
– Fiscal and customs incentives
– Public private partnerships (PPP) to allocate and reward risks
– Concessions to ensure recovery of investments and reward for risk (returns)
I- POLICY & MARKET OVERVIEW -
INVESTMENT CLIMATE (KEY ISSUES IN POWER SECTOR)
1. LEGAL/REGULATORY FRAMEWORK
– SPECIFIC LAW PUBLISHED DEFINING ACTIVITIES AND ROLES OF ACTORS IN THE
SECTORS
– PROCUREMENT IS A KEY FEATURE ON PURCHASE OF ADDITIONAL CAPACITY
– LICENCE REGIMES FOR PRODUCTION/TRANSPORT/DISTRIBUTION-RETAIL AND
CONDITIONS FOR AWARD ARE DEFINED
2. MARKET INCENTIVES : FISCAL/CUSTOMS
– FISCAL TERMS AWARDED FOR DIFFERENT STAGES OF PROJECT CYCLE –
CONSTRUCTION TO DECOMMISSIONING
– WAIVERS AND CANCELATIONS ON DUTIES FOR IMPORT OF CAPITAL EQUIPMENT
– FINANCIAL REGIME IS PREDICTABLE: RETURN ON INVESTMENTS CAN BE
NEGOTIATED IN CONCESSION AGREEMENT;
3. RESOLUTION OF CONFLICTS
– SECTOR REGULATOR ACTS AS ARBITER FOR DISPUTES
– COURTS CAN BE REFERRED TO IN CASE OF DISAGREEMENT AMONG DISPUTING
PARTIES
– COUNTRY IS SIGNATORY TO SEVERAL INTERNATIONAL TREATIES ON
TRADE/COMMERCE e.g. WTO /UNICATRAL
4. CREDIT RISK
– LOW DEFAULT IN PAYMENT BY CONSUMERS (RECEIVABLES)
– NO CASE OF DEFAULT IN POWER OFFTAKE AGREEMENTS/ GUARANTEES ARE NOT
6/25/2009 135
a) HYDROPOWER: GROSS POTENTIAL OF 55 GW (1983 inventory)–
i. Theoretical generation capacity of 294 Tera Watthours(TWh) per year.
ii. Technical and economically exploitable potential is19.7GW for a generating capacity of 115 TWh/year.
The current installed capacity represents 4% of thetechnically feasible exploitable potential.
There are 63 out of 100 sites that are distributedaround the country and have been assessed atpreliminary stage design to have capacities of upto 10 MW
b) BIOMASS RESIDUES (agriculture and forest logging): huge anduntapped potential amenable for generation of heat andpower/CHP.
c) SOLAR: Average Annual Irradiation of 4 -6 kWh/m2/day; almostuniformly spread around the country; but more regular in thenorthern portion.
I - POLICY & MARKET OVERVIEW: RESOURCE ENDOWMENT
MARKET OVERVIEW
d) NATURAL GAS (BOTH ASSOCIATED AND UNASSOCIATED)
• PROVEN RESERVES OF 11 TCF / OFFSHORE – VERY
RICH QUALITY (LOW SULPHUR & OTHER IMPURITIES,
HIGH METHANE CONTENT)
• ECONOMIC RESERVES TO INCREASE EVEN THREE
FOLD, FIVE YEARS FROM NOW, GIVEN AGGRESSIVE
EXPLORATION PROGRAM AND INTERIM RESULTS
I- MARKET OVERVIEW
e) ENERGY BALANCE IN 2007
1. SUPPLY (TOTAL = 10.2 Million TEP)BIOMASS 49 %
OIL & GAS 48 %
ELECTRICITY 3 %
ELECTRICITY BALANCE IN 2007 (TOTAL = 5,471 GWH)
– 70% SUPPLIED BY HYDROPOWER;
– 8% THERMAL/ OIL-FIRED PLANTS;
– AUTONOMOUS GENERATORS - 22% MOSTLY FROM BIOMASS/AGRIC RESIDUES;
– GENERATION FOR PUBLIC GRID – 4.3 TWH;
TOTAL CONSUMPTION (5.886 MTEP) BY SECTOR:– RESIDENTIAL 74%
– INDUSTRY 6%
– TRANSPORT 12%
– OTHERS 8%
6/25/2009 138CAMEROON
I - MARKET OVERVIEW
6/25/2009 139
2001 2002 2003 2004 2005 2006 2007
biomass 3,844 3,948 4,055 4,164 4,277 4,393 4,511
petroleum products 862 851 890 890 907 920 938
electricity 4,981 5,137 5,316 5,445 5,586 5,736 5,878
Total 9,686 9,936 10,260 10,499 10,769 11,048 11,326
0
2000
4000
6000
8000
10000
12000
CAMEROON ENERGY DEMAND- 2001-2007(DEMAND IN '000 TEP
biomass
petroleum products
electricity
Total
Power (Total)
II – IMPORTANCE OF ENERGY
TO THE ECONOMY
II- ENERGY AS DRIVER OF THE ECONOMY: STRATEGIC
FACTORS
1. Contribution to Economic growth– Added value from exports, revenue to budget (taxes, royalty)
– Level and quality of Investments are important to induce multiplier effects
2. Social aspects: employment and welfare, technology– Provider of jobs in electricity, oil and gas industries:
– Facilitates access to other new technologies. eg. fiber optic (telecommunications) increasingly used in power transmission and control networks
3. Key decision factor for new investments
– Capital intensive and added-value industries (e.g. mining/minerals, metals) cannot financially close without guaranteed long-term energy supply
– Transportation will not happen without fuels
4. Support to other social sectors (see MDG)-poverty alleviation via productive uses
– Health: conservation of vaccines and lighting of clinics
– Education- school lighting and longer hours of learning at home
– Water supply (drinking and irrigation) – power for water treatment and pumping for irrigation of fields
– Food security: refrigeration/conservation of agricultural and other foods
The above are so important and interlinked as the correlation between energy supply (adequacy and reliability) and GDP growth are intimate (see graph on next page)
EXAMPLE: ECONOMIC PENALTY FOR UNDERINVESTMENT IN POWER
SECTOR: BY 2010, LOST ECONOMIC PRODUCTION DUE TO
SHORTAGE/ABSENCE OF POWER WOULD BE CLOSE TO THE
FORECAST GROSS DOMESTIC PRODUCT.
Potential loss in Economic growth due to power
outages (in terms of GDP)
0%
1%
2%
3%
4%
5%
2005 2010 2015 2020 2025
Year
% L
oss o
f G
DP
loss due to
outage as % GDP
5-Yr GDP grwth
II- KEY DRIVERS FOR INCREASED INVESTMENTS
1. GOVERNMENT POLICY FOR UNIVERSAL ACCESS:– CURRENT NATIONAL ELECTRIFICTION RATE IS ONLY 46% AND OFFGRID/RURAL
ELECTRIFICATION IS ONLY 10%
– ACCESS TO PETROLEUM PRODUCTS / ESPECIALLY LPG IS LESS THAN 10%
– GOVT OBJECTIVE TO INCREASE UNIVERSAL ACCESS BY 75% BY 2020 AND 100% BY 2030
2. ATTRACTIVE MACROECONOMIC REFORMS AND SECTOR PLANS– ENERGY SECURITY AND DIVERSIFICATION REVEALED THROUGH LEAST-COST EXPANSION
PLANS
– ATTRACTIVE FRAMEWORK FOR PRIVATE CAPITAL INVOLVEMENT CONTINOUSLY IMPROVED SINCE 1998:
• UNBUNDLING AND LIBERALISATION OF POWER SUPPLY FUNCTIONS
• REGULATORY AUTHORITY RELATIVELY INDEPENDENT
• OPPORTUNITIES FOR INDEPENDENT POWER PRODUCERS
• FRAMEWORK RISK ALLOCATION PUBLISHED - FOR PUBLIC PRIVATE PARTNERSHIPS
– ATTRACTIVE ROE OF POWER UTILITY RECORDED (8 TO 9 % POST TAX – 5 YEAR AVERAGE)
– GDP vrs. CONSUMPTION HIGHLY CORRELATED – HISTORICAL TREND
3. FAST GROWING DEMAND (NATIONAL & EXPORT)
• INTERNAL DEMAND– 10-YEAR LOAD DEMAND GROWING FASTER THAN GDP (8% vrs 5%)
– RESERVE MARGIN IS ALMOST INEXISTENT AND RELIABILITY HAS DETERIOTATED MAINLY DUE TO LAG IN INVESTMENTS
– GROWING INDUSTRIAL DEMAND FROM ENERGY INTENSIVE INDUSTRIES –ALUMINIUM, IRON ORE/STEEL, CEMENT, ETC
EXPORT MARKETS– ALL NEIGHBOURS EXPRESSED INTEREST TO BE SUPPLIED BY CAMEROON
• ELECTRICITY: 6,000 MW –FIRM BY 2015 AND MORE AFTER
• OIL PRODUCTS AND GAS
• DEVELOPED COUNTRIES EXPRESS DESIRE TO IMPORT GAS/LNG
6/25/2009 143CAMEROON POWER OPPORTUNITIES
COMPELLING REASONS TO INVEST IN
ADDITIONAL CAPACITY – ILLUSTRATION
OF THE SOUTHERN INTERCONNECTED
GRID SUPPLIED BY AES-SONEL AREA
ISSUE TO ADDRESS: ADDITIONAL
GENERATION & TRANSMISSION
CAPACITY REQUIRED TO EXISTING
ASSET OPERATED BY AES SONEL:
1. DRY SEASON PEAK INCREASINGLY
IMPORTANT DUE TO LOW HYDRO-
AVAILABILITY, INDUSTRIAL LOADS
2. DIESEL-FIRED PLANTS OPERATED BY
AES SONEL WILL NOT EXIST AS FROM
2010 DUE TO AGE AND OPEX –
EXISTING PLANTS WILL BE
DECOMMISSIONED
3. AES -SONEL GENERATING CAPACITY
CAPPED AT 1000 MW (RESIDUAL IS
LESS THAN 70 MW), SO
ADDITIONAL/EXTERNAL TO
CONCESSION GENERATION CAPACITY
AND TRANSMISSION NEEDED
4. AES SONEL CONCESSION LICENSE
EXPIRES AT 2021
NEW PLANTS / IPP ROLE
1. MIX OF PLANTS (HYDRO + GAS)
EMERGING, WITH GAS CAPACITY
BECOMING IMPORTANT - TO INCREASE
NATGAS SUPPLIES OVER THE NEXT
YEARS
2. SOME OFFGRID HYDROPLANTS TO BE
BUILT /OPERATED TO NETWORK
RELIABILITY IMPROVEMENT AND
FILLING PART OF PEAKS
3. CAPEX FOR HYDRO VRS GAS WILL
COUNT IN OPTIMAL MIX; THEREFORE
PPAs WILL BE KEYED ON FIRM AND
LONGTERM OFFTAKE
CAMEROON POWER SECTOR
OPPORTUNITIES & CHALLENGES144
-
200
400
600
800
1 000
1 200
1 400
Av
ail
ab
le c
ap
ac
itie
s (
MW
)
Capacity deficit (MW) 72,6 118,6 55,4 33,2 51,2 73,0 130,4 69,3 96,3 124,4 153,5 184,1 223,5 265,1 308,6
Diesel plants 37 51 51 - - - - - - - - - - - -
Oyomabang/Logbaba HFO 19 30 30 30 30 30 30 30 30 30 30 30 30 30 30
Limbe HFO 79 82 82 82 82 82 82 82 82 82 82 82 82 82 82
Kribi - - - 147 147 147 147 147 147 147 147 147 147 147 147
Dibamba - - 84 84 84 84 - 84 84 84 84 84 84 84 84
Hydro plants 460 414 414 416 420 422 524 527 527 527 527 527 527 527 527
Maximum load at Peak - dry season 667 695 716 792 814 838 913 939 966 994 1 023 1 054 1 093 1 135 1 178
Public sector at Peak 528 547 568 589 611 635 660 686 713 741 770 801 840 882 925
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
III – UPDATE ON ENERGY SECTOR
PROJECTS
Focus on power portfolios
III - UPDATE ON
PROJECTS: POWER SECTOR
III.1 - POWER SECTOR UPDATE
• Projects under processing (expected COD)– Lom Pangar (head storage reservoir/powergen @50 MW): 3Q2012/1Q2013
• Key studies and 1st round table of donors conducted
• Project zone defined under lands register
• Preparatory works launched; including environmental/social compensation
• Second & final roundtable of donors planned
– Yassa/Dibamba-Douala (HFO-fired 88 MW: 3Q2009
– Kribi power project (gas to electricity@ 250 MW): 1Q2012
– Memve‟ele hydropower (run-of-the river @ 200 MW): 2Q2013
– Nachtigal hydropower (@330 MW): 3Q2013 & contingent upon completion of Lom Pangar reservoir
• Pipeline of new projects– Bini à Warak (hydropower @75 MW) – feasibility studies to start in July 09
– Limbe (gas to Electricity @ 315 MW)): Idem
– LogBaba (Gas to electricity @ 50 MW)): • Final exploratory drilling to start in July 09
• Gas operator consulting with potential/industrial customers of gas and HV power
Update: Case Study – Practice for preparing
Kribi gas to powerContractual framework used: Risk allocation under PPP principles (see schema overleaf)
• Reference legal framework: Electricity code; Gas code; Environmental Management / Impact assessment
• Relevant Licensing scheme & status:
– EIA almost complete (on power side); ongoing for gas supply side
– IPP license application drafted; to be finalised after gas supply pricing available
– Commercial contracts:
• GSA: gas supplier (SNH/Perenco) to power generator (KPDC)
• PPA : Power off taker (AES SONEL) buys power supplied at its busbar (100 km from generation site)
• Construction & operations Contracts
– Gas supplier hired via bidding
– EPC for power to be hired under international open bids (bids under review)
– O&M contractor could be part of EPC or independent
• Financing plan:
– Project capex increased from US$80M in 2005/06) to US$100 M, due to:
• Increase in price for hardware and labour in OECD countries
• High demand for crude and refined products, and construction orders
– Financed through Equity (GoC & AES)+ debt (syndicated loan; senior lender is IFC)
– Guarantees & security package:
• Tariffs close to economic cost: no subsidy; tariffs will be adjusted
• Risks guaranteed covered under: WB/PRG; GoC/Sovereign; insurance
• Lessons learned so-far:• Secure lands early enough and commence public information to avoid unjustified claims for property
compensation
• Delays lead to cost increase even when price of gas reduces after
• Gas supply is not conclusive until PPA deal has been sealed
• Stakeholders must own only one project timetable
• Lenders‟ presence important to speed preparation as they avail to experience elsewhere.
Contractual arrangements
DEVELOPMENT PROCESS
Subordinate lenders
GoC $Y01mil.,
40 years,
at 0.75%
AES SONEL/KPDC
$Y02., 20 years, at 6.00%
IDA Spread
Account
$Y1mil., 10 years,
at 10.00%
Economic tariff
Pre-project tariffs
$Y3mil. loan at
10.00% expected
rate of return
$Y2mil. equity at
10.00% expected
rate of return
FINANCING ARRANGEMENTS
$Xmil.
Industrial
Consumers
IFC
IDA
Household
Consumers
IV – PROJECTS PIPELINE FOR WHICH
INVESTMENT IS SOUGHT
IV – INVESTMENT PIPELINE
Projects pipeline comprise:– Power sector and renewables
– Oil and gas – downstream (refining to distribution)
– Energy efficiency
• Final demand prepared under GoC‟s vision for MDGs achievement
• Despite economic slow down; observed demand is slightly affected ( transportation fuels consumed by export activities)
• Investment gap is growing, due to lag in or insufficient investments. Without adequate investments (a level commensurate to catch-up lag and anticipate future demand), economic growth will further be constrained
1. Generation
2. Transmission
3. Distribution
4. Regional interconnection / Export markets
----------------
GENERATION (MEGA PROJECTS 50 MW AND ABOVE IN INSTALLED CAPACITY):
• HYDROPOWER STORAGE : LOM PANGAR HEAD POND TO INCITE CONSTRUCTION OF SEVERAL DOWNSTREAM HEPs
• HYDROPOWER GENERATION: SEVERAL BIG SITES FOR CLOSE TO 5,000 MW BY 2020
• GAS TO POWER GENERATION (650 MW) & FOR WHICH FOR FEASIBILITY OF ALL THREE IN PROGRESS : – KRIBI : COD 2013,
– LIMBE, COD 2013/14
– DOUALA/LOGBABA: 2010
– CAPEX REQUIREMENTS ABOUT US$2.5 Billion (BY 2015) –PRECISION HIGHLY DEPENDENT ON CAPITAL COST FOR IMPORTED ITEMS SUCH AS MACHINERY.
6/25/2009 156
IV.I - INVESTMENT PIPELINE : POWER SECTOR
IV.I - INVESTMENT PIPELINE :
POWER SECTORTRANSMISSION EXPANSION :
1. NATIONAL BACKBONE GRID TO INTERCONNECT INEDEPENDENT GRIDS AND GENERATORS TO SUPPLY LOADS
2. TRANSMISSION OPERATOR WILL BE A REGULATED MONOPOLY AND TO OWN/OPERATE & MAINTAIN ASSETS
3. OPERATOR WILL ALSO CONDUCT MARKET FUNCTIONS IN SPOT AND LONGTERM MARKETS : BALANCING, SCHEDULING/DISPATCH, COMPENSATION AND INVESTMENTS
4. OPERATOR ALSO TO BE INVOLVED WITH EXPORT MARKETS
5. NATIONAL TRANSMISSION CORRIDOR WILL BE DEFINED –ROUTE LENGTH ABOUT 3,000 Km
6. CAPEX REQUIREMENTS: 1. ABOUT US$ 500 TO 700 MILLION (BY 2015)
2. US$ 500 MILLION AFTER
DISTRIBUTION EXPANSION
1. 2025 OBJECTIVE OF ELECTRIFICATION RATES - 75% NATIONAL; WITH 50% RURAL
2. DISTRIBUTION LOADS (MV & LV) SERVICE AREAS ARE BIG –AT INADEQUATELY SERVED (INSUFFICIENT SUPPLY, LOW QUALITY OF SERVICE)
3. INVESTMENTS COMPRISE NEW CONNECTIONS, UPGRADES AND REHABILITATE/RENOVATION
4. AREAS TO BE SERVED BY BACKBONE HV GRID AND OFFGRID SOLUTIONS (RENEWABLES)
5. CAPEX REQUIREMENTS ABOUT US$2.5 Billion (BY 2015) – PRECISION HIGHLY DEPENDENT ON REVIEW OF MARKET DEMAND AND CAPITAL COST FOR IMPORTED ITEMS, ESPECIALLY RENEWABLES
6/25/2009 158
IV.1 POWER SECTOR INVESTMENTS
MAIN PROJECT SCOPE: TRANSMISSION EXPANSION AND DISTRIBUTION:
i. NATIONAL BACKBONE GRID TO INTERCONNECT INEDEPENDENT GRIDS AND GENERATORS TO SUPPLY LOADS
ii. THE NATIONAL TRANSMISSION OPERATOR WILL BE UNIQUE PURCHASER / DISPATCHER OF EXPORT POWER
iii. CAPEX REQUIREMENTS: ABOUT US$500M (BY 2015)
• MAIN CONSIDERATIONSa. MAIN BENEFITS OF INTERCONNECTION OF GRIDS COMES MAINLY
FROM LEAST-COST AND BASELOAD PLANTS (MOSTLY HYDROPOWER)
b. LEASTCOST PLAN AND SECURITY OF SUPPLY ARRANGEMENTS OF NEIGHBOURING COUNTRIES
c. TRANSMISSION GRID AVAILABILITY
d. LEGAL/REGULATORY ASPECTS: REGIONAL POWERPOOL AGREEMENT
6/25/2009 159
IV.1 POWER SECTOR
INVESTMENTSPORTFOLIOS FOR EXPORT MARKETS:
Investment Pipeline needs in
Power sector meet MDGs
Additional Infrastructure investments under various load growth
scenarios by year 2020
8601
13566
343 4501144 1144 1630
2695
4625
7481
0
2000
4000
6000
8000
10000
12000
14000
16000
Low or
'BAU'
Medium High
(without
export)
High (with
export)
Scenario
As
so
cia
ted
in
ve
stm
en
t
(US
$ m
illio
n)
Total investment
Distribution
Generation
Transmission
IV.2 – OIL & GAS PORTFOLIOS FOR
WHICH INVESTMENTS ARE SOUGHTOIL AND GAS PORTFOLIOS (DOWNSTREAM)
1. MODERNISATION AND EXPANSION OF OIL REFINERY : PHASE II1. PHASE I ON-GOING: COMPRISE MODERNISATION AND MANAGEMENT INFORMATION
SYSTEM
2. PHASE II TO COMPRISE :a. DOUBLE PROCESSING CAPACITY ( 2 TO 4 MILLION MT/YR)
b. IMPROVE ON ENVIRONMENTAL MANAGEMENT FACILITIES
3. FEED ESTIMATES – US$800 MILLION/FEED ESTIMATES
2. MODERNISATION AND EXPANSION OF BULK STORAGE FACILITIES FOR REFINED PROJECTS:
a. EXISTING FACILITIES – US$450 MILLION/PRE-FEED ESTIMATES
b. MARINE TERMINALS AT DEEPWATER SEAPORTS (KRIBI AND LIMBE) –ESTIMATES IN PROGRESS
3. IMPROVEMENT IN OPERATIONS FOR THE TRANSPORTATION OF PRODUCTS:
1. DIVERSIFY AND LIMIT RISKS IN PRODUCTS SUPPLY TO MARKETS
2. REDUCE SUPPLY COSTS AND TIME
3. INFRASTRUCTURE REQUIRED WOULD COMPRISE:a. PRODUCTS PIPELINE
b. ROAD TANKERS
c. RAIL WAGONS
d. SEA/OCEAN-GOING VESSELS.
e. RETAIL FACILITIES, ESPECIALLY LPG
IV.3 – Investment Portfolios- Estimated Capex summary
(MAY 09 ESTIMATES)
POWER : 6,000 to 8,000 US$ millions
– Generation: 2,000 to 2,500 US$M
– Transmission: 1,000 to 1,500 US$M
– Distribution: 3,000 to 4,000 US$M
OIL & GAS: 3,620 US$M +– Refining : 800 US$ M
– Bulk storage (inland): 500 US$M (pre-feed)
– Bulk storage (marine @ Douala + two deepwater seaports): 320 US$M(pre-feed)
– Transport (rail + sea + road): 2,000US$M (pre-feed for 2 Million metric tons/yr.)
– Distribution (service stations): TBD
TOTAL: 9 to 11 US$B or annually: 360 to 440 US$M +
– Power sector to capture more than half of capex. Priority should go to transmission; without which demand cannot be served
– However; capex could be higher in distribution/retail segments of power & oil/gas; given ambitious access rate.
V- LOOKING AHEAD
1. ENERGY SECTOR IS VITAL TO ECONOMIC GROWTH IN
CAMEROON; AND INVESTMENT NEEDS FOR ADDITIONAL
INFRASTRUCTURE IS HUGE, WHICH ALONE NEITHER THE PUBLIC
NOR PRIVATE SECTOR CAN FINANCE – THE NEED FOR
PARTNERSHIP AS ENVISAGED UNDER A SPECIFIC POLICY IN
CAMEROON
2. CONTINUOUS IMPROVEMENTS IN THE INVESTMENT CLIMATE FOR
ENERGY SECTOR:
3. OBJECTIVE IS TO INCREASE LEVEL OF SECURITY OF SUPPLY
AND THE VISIBILITY / PREDICTABILITY OF RETURNS ON
INVESTMENTS FOR POTENTIAL INVESTORS
4. KEY ACTIONS INCLUDE:
1. Strengthen regulatory authority
2. Alignment to the Public Procurement Code
3. Multiply bankability studies
4. Publish Rules for open access to power; oil and gas
5. Publish Integrated resource energy plan
6. Disseminate information on sector activities and
opportunities6/25/2009 163
THANK YOU FOR YOUR KIND ATTENTION!
IF YOU HAVE INQUIRIES, PLEASE DO NOT HESITATE TO CONTACT US AT:
MINISTRY OF ENERGY AND WATER RESOURCES
MINEE, P.O. BOX 70, YAOUNDE,
REPUBLIC OF CAMEROON
Tel/ Fax: +237 2222 3400 / 2222 6177
or + 237 2223 5608 (direct to the presenter)
Email: [email protected]
6/25/2009 164
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Parallel Sessions - Energy & Environment: A key Enabler of the Business Environment
Forestry & Environment
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Paulo CeruttiResearcherCentre for International Forestry Institute
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Elvis Ngolle NgolleMinister of Forestry and WildlifeCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Parallel Sessions- Improving Services, Infrastructure & Economic Development
Agro processing
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Philip ClearyDirectorGuinness
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Obi-Okpun Wanobi OsaDirector General Palmol Plantations Plc
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Louis YindaPresident & Director GeneralSOSUCAM
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Philip ClearyDirectorGuinness
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Jean NkueteVice Prime Minister & Minister of AgricultureCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Parallel Sessions- Improving Services, Infrastructure & Economic Development
ICT
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Chair: Philippe VandebrouckPresidentMTN Cameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Dr Ebot EbotGeneral ManagerANTIC
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
HE Bello Bouba MaigariMinister of Post and TelecommunicationsCameroon
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Concluding Address
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Dr. Diane Acha Morfaw, Solicitor & Barrister at LawBellah Chambers
Sustaining Investment and Growth
Hilton, Yaoundé, Cameroon: 16-19 June 2009
3rd Cameroon Investment Forum 2009and International Investor Day
Steve GodfreyManaging DirectorCommonwealth Business Council