CONCESSÃO DO TERMINAL MULTIUSO DO PORTO DE LUANDA Novembro 2019 VERSÃO PRELIMINAR

MULTIPURPOSE TERMINAL OF THE PORT OF LUANDA Concession of the Seaport Infrastructure

Investment Memorandum

December 2019

Contents

1 INTRODUCTION ...... 5 2 ANGOLA’S SOCIAL AND ECONOMIC ENVIRONMENT ...... 6 2.1 Social and Economic Development in Angola ...... 6 2.2 Private Investment Framework ...... 12 2.3 Infrastructures National Development Plan ...... 15 3 SEAPORTS SECTOR ...... 18 3.1 Seaport Activity in Sub-Saharan Africa ...... 18 3.2 Seaport Infrastructures in Angola ...... 20 3.3 Angolan Seaport Sector in Numbers ...... 28 3.4 Regulatory Framework of the Seaport Sector in Angola ...... 29 4 PORT OF LUANDA ...... 32 4.1 General Description...... 32 4.2 Main seaport infrastructures ...... 33 4.3 Operational Activity Performance of the Port of Luanda ...... 37 5 MULTIPURPOSE TERMINAL OF THE PORT OF LUANDA ...... 46 5.1 Description of the different relevant activities developed in the Terminal ...... 46 5.2 Description of the main infrastructures and equipment ...... 46 5.3 Description of the current labour force ...... 52 5.4 Operational Activity Performance of the Multipurpose Terminal ...... 55 5.5 Historical Economic Indicators of SOPORTOS ...... 59 5.6 SWOT Analysis ...... 60 6 SUMMARY OF THE TENDERING PROCEDURE ...... 60 7 SUMMARY OF THE SPECIFICATIONS ...... 62

Figures Figure 1 – Development Areas ...... 12 Figure 2 – National Network of Seaports and Railways ...... 17 Figure 3 – Main Seaports and Railway Corridors in Africa ...... 19 Figure 4 – National Network of Seaports and Railways ...... 20 Figure 5 – Map of the Port of Lobito and its Existing Terminals ...... 23 Figure 6 – Map of the Port of Cabinda ...... 24 Figure 7 – Layout of the First Stage of the Future Port of Caio ...... 25 Figure 8 – Layout of the Second Stage of the Future Port of Caio ...... 25 Figure 9 – Map of the Port of Namibe and Existing Terminals ...... 26 Figure 10 – Map of the Port of Luanda and Terminals ...... 32 Figure 11 – Map of the Multipurpose Terminal ...... 47 Figure 12 – LIEBHERR cranes and Pier Area ...... 48

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Tables Table 1 – Real GDP Growth Rates for Angola (2017-2020) ...... 9 Table 2 – Economic Indicators for Angola (2017-2020) ...... 9 Table 3 – Procedural Regimes for Private Investment Approval ...... 13 Table 4 – Tax Incentives ...... 13 Table 5 – List of Logistics Platforms planned for Angola ...... 16 Table 6 – List of Africa’s Largest Seaport Operators...... 19 Table 7 – Terminals and Concessionaires of the Port of Luanda ...... 33 Table 8 – List of Existing Equipment in the General Cargo Terminal ...... 34 Table 9 – List of Existing Equipment in the Multipurpose Terminal ...... 34 Table 10 – List of Existing Equipment of the Container Terminal ...... 35 Table 11 – Vessel traffic in the Port of Luanda (number of ships) ...... 37 Table 12 – Traffic of Long-haul Vessels by Navigation Agency ...... 38 Table 13 – Traffic of Long-haul Ships by Navigation Agency (1st Semester 2018 vs. 1st Semester 2019) ... 39 Table 14 – Cargo Volume Handled by Type of Goods (2016- 1st Semester 2019) ...... 41 Table 15 – Cargo Volume Handled by Type of Goods (1 Semester 2018 vs. 1 Semester 2019) ...... 42 Table 16 – Cargo Volume Handled by Terminal (2016 – 1 Semester 2019) ...... 42 Table 17 – Cargo Volume Handled by Terminal (1 Semester 2018 vs. 1 Semester 2019) ...... 42 Table 18 – Container Traffic by Terminal and type of Container ...... 45 Table 19 – List of existing Mobile Cranes in the Terminal ...... 49 Table 20 – List of existing Handling Equipment in the Terminal ...... 49 Table 21 – List of existing Light Vehicles in the Terminal ...... 50 Table 22 – List of IT Equipment ...... 51 Table 23 – Vessel Traffic Performance in the Multipurpose Terminal ...... 55 Table 24 – SWOT analysis of the Multipurpose Terminal ...... 60 Table 25 – Summary Table of the Tender Procedure ...... 61 Table 26 – Summary of the Specifications ...... 62

Graphics Graph 1 – Oil & Gas Production and Real GDP Growth ...... 6 Graph 2 – Evolution of BNA Rate...... 7 Graph 3 – Real GDP Growth (Oil and Non-oil Sectors) ...... 8 Graph 4 – Primary Balance and Fiscal Balance (% of GDP) ...... 10 Graph 5 – Largest Seaports in Sub-Saharan Africa in 2017, thousand TEUs handled ...... 18 Graph 6 – Average Stay (days) for Ships in selected African Seaports, 2017 ...... 22 Graph 7 – Cargo Volumes Handled in the Ports of Angola between 2012 and September 2019 ...... 28 Graph 8 – Vessel Traffic per Terminal (number of ships) ...... 37 Graph 9 – Vessel Traffic in the Port of Luanda by Navigation Agency (2016 – 1st Semester 2019) ...... 40 Graph 10 – Passenger Traffic in the Port of Luanda (2016 – 1st Semester 2019) ...... 41 Graph 11 – Container Traffic in units (2012 – 1st Semester 2019) ...... 43 Graph 12 – Container Traffic in TEUs ...... 43 Graph 13 – Container Traffic in TEUs by Terminal ...... 44 Graph 14 – Container Traffic in TEUs by Terminal (1st Sem. 2018 vs 1st Sem. 2019) ...... 44 Graph 15 – Age and Gender Distribution of the Labour Force ...... 52 Graph 16 – Literacy of the Labour Force ...... 53 Graph 17 – Labour Force by Department ...... 53 Graph 18 – Minimum and Maximum Monthly Salary, Base and Total, in Kwanzas ...... 54 Graph 19 – Performance of Containers Handled in TEUs (2012 – 1st Semester 2019) ...... 56 Graph 20 – Relative Performance of Unloading and Loading Operations in handling of Full Containers, in % (2012 – 1st Semester 2019) ...... 56

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Graph 21 – Relative Performance of Unloading and Loading Operations in handling of Empty Containers, in % (2012 – 1st Semester 2019) ...... 57 Graph 22 – Relative Performance of the Transhipment Operations in Cargo handling, in % (2012 – 1st Semester 2019) ...... 57 Graph 23 – Performance of the Handling of Non-container Cargo in the Multipurpose Terminal (2012 – 1st Semester 2019) ...... 58 Graph 24 –Operating Revenue performance of SOPORTOS between 2013 and 2018 ...... 59

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Important Note

This Investment Memorandum is an integral part of the Public Tender documents for the public service concession of the management and operation of Luanda’s Port Multipurpose Terminal (“Concession”), comprising the rights to use and operate the seaport public domain property of the Empresa Portuária de Luanda (EPL), in a Landlord Port management regime.

This Memorandum was prepared with the aim of supplying Bidders with information to facilitate the analysis of the Concession object and elaborate proposals (“Proposals”) to present in the tender procedure framework. Despite its availability being integrated and subject to the Concession tender procedure, this Memorandum is purely informative and non-binding.

The entities and/or individuals to whom this document is made available will be responsible for the analysis, interpretation and utilization of the information herein, for the preparation of Proposals that should be elaborated under their full responsibility, in accordance with the technical, financial and legal criteria defined in the tender documents.

EPL and its related entities and/or consultants are not responsible for the accuracy of the data that the current document is based on, nor it provides any assurance, either expressly or implicitly, neither about the information herein, nor about the information in which it is based, neither about the fact that this information remains unchanged after the delivery of the present Investment Memorandum.

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1 INTRODUCTION

The Government of Angola launched an International Public Tender for the concession and operation of the Multipurpose Terminal of the Port of Luanda (“Concession”) with the aim of promoting the development and improvement of the efficiency of the seaport activity, through the involvement of private operators with proven experience in the sector.

The tender procedure was launched on 16 December 2019 with the delivery of proposals to be made until 30 March 2020. After the evaluation of proposals, one or more applicants will be selected for the negotiation phase in order to award the Concession.

Angola is currently the 7th largest African economy and the 4th in Sub-Saharan Africa. Rich in natural resources (oil and minerals), Angola provides significant development potential in terms of agriculture, manufacturing and tourism. With a GDP per capita that is twice the average of Sub-Saharan Africa, and a population of about 30 million, the Government of Angola has implemented measures aimed at reducing inflation, promoting fiscal balance, developing exports and replacing imports, as well as promoting private investment and a gradual stabilization of the foreign exchange market.

In the seaport sector, the Port of Luanda is the largest seaport in the country in terms of cargo movements, working in a Landlord Port regime with five concessioned terminals: four in public service regime and one in private regime dedicated to supporting the oil industry. The Port of Luanda is located in the natural bay of the city of Luanda, the country’s capital, providing excellent navigation and operating conditions for sea transport vessels. In terms of regional location, the Port of Luanda is located in the middle of the west coast of the African Continent, making its seaport infrastructures a mandatory stop for the sea transport routes in the west of the African Continent.

The Multipurpose Terminal of Luanda (“MT”) works simultaneously in the manoeuvre of general and container cargo, covering an embankment area of 229,100 square meters, a dock of 610 meters, with an average depth of (-12.5 m) ZH. The terminal has one access to the sea, one access to land that connects through a seaport hinterland and one access that connects to other terminals.

In 2018, the MT handled nearly 312,000 TEUs (58% full and 42% empty) with average daily terminal arrivals of 1.5 ships and an average staying time (loading/unloading) for the container ships between 1 and 1.8 days. The MT’s container park has a maximum storage capacity of 15,000 TEUs simultaneously, allowing the stacking of fully loaded containers up to five levels. Under the tender documents, the MT will have 725 workers that will be transfer to the future concessionaire.

The MT has seven mobile seaport cranes of the German brand LIEBHERR, all of them fully operational. Additionally, there are two more mobile seaport cranes of the brand Gottwald that are currently inoperative.

The tender process for the concession of the MT represents an unique opportunity for experienced private operators and investors to enter a key sector of one of Africa’s most important economies, undertaking an operation with proven track-record (infrastructure, equipment, personnel and reference client portfolio) and with an attractive outlook in terms of return on investment.

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2 ANGOLA’S SOCIAL AND ECONOMIC ENVIRONMENT

2.1 Social and Economic Development in Angola

Angola was one of the world’s fastest growing economies during the years 2002-12, a period that marked the end of decades of civil war in the country and led to the signing of peace agreements in the province of Luena in 2002.

The country recorded an average annual real GDP growth rate of about 11% during this period, supported by a stable political and social environment and largely boosted by the increase in oil production.

The Angolan economy also benefitted from the Government’s efforts to (1) rebuild the country and rehabilitate its infrastructures, (2) gradually open to private investment and (3) implement policies to promote and increase production capacity.

According to data from the International Monetary Fund (IMF), the country’s GDP per capita stood at around 7,000 USD at the end of 2012, nearly twice the average in Sub-Saharan Africa.

However, since 2016, Angola has faced a more adverse economic environment, in line with what happened in other countries in the region such as Nigeria and South Africa.

Similarly to the oil crisis of 2008-09, the slowdown in economic activity in the country resulted from the abrupt and prolonged decrease in oil prices since mid-2014 that led to significant underinvestment in the oil and gas sector in recent years. This was eventually reflected in the marked decline in oil production and, as a result, lower proceeds from the sector for the public coffers.

Graph 1 – Oil & Gas Production and Real GDP Growth

2,0 Oil and Gas Production (mbpd) (LHS) Real GDP growth 25%

1,906 20% 1,9

1,809 15% 1,780 1,8 1,762 1,758 1,749 1,735 1,716 10% 1,698 1,7 1,660 1,672 5% 1,597 1,6 0% 1,517 1,5 -5% 2007 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19P

Sources: INE and Ministry of Finance.

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The need to secure some fiscal deficit adjustment led the Government to aggressively reduce capex levels, which only exacerbated the downturn in activity. Indeed, public investment remains a key source of growth of the non-oil sector, which now represents more than 65% of the country’s GDP (vs. less than 45% a decade ago).

Economic activity in the country was also impacted by a tighter monetary policy followed by the Banco Nacional de Angola (BNA), the central bank, in recent years. This policy aimed to contain inflationary pressures that placed inflation at levels last seen more than a decade ago, above 41% at end-2016. It mostly reflected the impacts from the depreciation of the kwanza, the reduction in fuel subsidies at the time and higher food prices.

Since 2014, the BNA lifted its benchmark interest rate once in 2014, five times in 2015, twice in 2016 and once in 2017 for a total increase of 925 basis points (“b.p.”). These increases placed the BNA rate at 18%, a historical high.

Meanwhile, inflation has declined since end-2017, allowing the central bank to lower the BNA rate by 150 b.p. in 2018 and 100 b.p. in 2019. The benchmark interest rate currently stands at 15.5%, which compares with 9.25% in mid-2014 before the oil crisis.

Graph 2 – Evolution of BNA Rate

19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% Oct14 Apr15 Oct15 Apr16 Oct16 Apr17 Oct17 Apr18 Oct18 Apr19 Oct19

Source: BNA.

According to data from the Instituto Nacional de Estatística (INE), real GDP contracted 2.6% in 2016, 0.1% in 2017 and 1.2% in 2018. Angola is expected to record its fourth consecutive year of economic recession in 2019 as lackluster growth in the non-oil sector has been insufficient to offset the impact from lower oil production. Current forecasts suggest a contraction of 1.1% in economic activity this year, which compares with a lower decline expected by the IMF for the period (-0.3%).

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Graph 3 – Real GDP Growth (Oil and Non-oil Sectors)

11,1% Oil & Gas Sector Non-oil Sector 10.0% 8.6% 9.2% 8.5% 8.7%

1.2% 1.0% 0.6%

-0.9% -2.5% -2.5% -2.7% -4.4% -5.2% -5,3% -5.2%

-9.5%

2011 2012 2013 2014 2015 2016 2017 2018 2019F

Sources: INE and Ministry of Finance.

However, the economic recession that has hit Angola in the last four years is expected to come to an end in 2020. The Budget Proposal for 2020 recently presented to Parliament includes a forecast for real GDP growth of 1.8%. This projection is based on a recovery in the oil sector (1.5%), after a very weak performance recorded in recent years, and a slight acceleration in activity in the non-oil sector (1.9% versus 0.6% expected in 2019). The Budget Proposal also assumes a recovery of 3.4% in oil production to 1.4 million barrels per day thanks, in part, to the stabilization in production in Total’s project in Kaombo Sul and an average oil price of 50 USD per barrel. This is the same price projection included in the Revised Budget for 2019, which, according to the performance recorded throughout the year, proved to be somewhat conservative. In terms of the non-oil sector, the Government expects a more pronounced improvement in the agriculture, fishing and retail sectors.

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Table 1 – Real GDP Growth Rates for Angola (2017-2020)

Economic Activity 2017 2018 20191 20202

Real GDP Growth -0.1% -1.2% -1.1% 1.8% - Oil & Gas -5.3% -9.5% -5.2% 1.5% Oil -5.2% -9.7% -6.1% 3.4% Gas 461.4% -5.3% 7.8% -21.8% - Non-oil 1.2% 1.0% 0.6% 1.9% Agriculture 1.4% -2.0% 1.8% 3.1% Fishing -1.1% -17.1% -0.2% 4.0% Extractive Industry -0.8% -6.3% 17.9% 6.6% Manufacturing Industry 1.2% 4.6% 3.6% 1.2% Construction 2.5% 0.4% 3.5% 1.3% Energy -1.7% 22.3% 10.7% 0.5% Retail 1.5% -0.2% 0.5% 1.2% Others 0.3% 1.2% -3.1% 1.5%

(1) Revised Budget (2) Forecast; (3) Budget Proposal. Source: Angolan Authorities. The Government also anticipates inflation to increase to 25% in 2020 largely due to a gradual adjustment in fuel prices. This projection is against the aim of inflation not increasing after the year 2018 and for the increase in prices to gradually decline towards single figures until end- 2022. This forecast also compares with 17.7% expected in 2019 and is slightly above the 17.5% initially foreseen. This results from adjustments made by the Government in electricity tariffs in 2019.

Table 2 – Economic Indicators for Angola (2017-2020)

Economic Indicators 2017 2018 20191 20192 20203

Inflation 23.7% 18.6% 17.5% 17.7% 25.0% Diamond Production (Thousand Carats) 8.964,1 8.096.5 9.547.3 9.547.3 10.175.0 Diamond Average Price (US$/Carat) 115.1 144.1 154.4 154.4 162.1 Annual Oil and LNG Production 643.2 583.0 571.7 553.6 560.9 Oil Production (MBbl) 597.6 539.8 523.7 507.1 524.5 LNG Production (MBOE) 45.6 43.2 48.0 46.5 36.4 Daily Oil Production (Million bpd) 1,637 1.479 1.435 1.389 1.437 Average Oil Price (US$/Bbl) 53.9 70.6 55.0 63.2 55.0 Average LNG Price (US$/BOE) 29.0 48.7 29.0 48.7 50.9

(1) Revised Budget; (2) Forecast; (3) Budget Proposal. Source: Angolan Authorities. In particular, the Budget Proposal for 2020 amounts to AKZ 15,971 billion, representing an increase of 53.5% when compared with the 2019 Revised Budget figure of AKZ 10,407 billion. It also foresees a fiscal surplus of 1.2% and a primary surplus of 7.1% of GDP. If confirmed, this would mean that the country’s public accounts would reach a surplus for the third consecutive year in 2020.

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Graph 4 – Primary Balance and Fiscal Balance (% of GDP)

Primary Fiscal Balance Overall Fiscal Balance 7.6% 7.1% 6.7% 6.5% 5.2%

2.0% 1.1% 1.2% 0.3%

0,0% -1.3% -1.7% -3.3% -3.0% -4.5% -5.4% -6.6% -6.3%

2012 2013 2014 2015 2016 2017 2018 2019 (1) 2020 (2) (1) Revised Budget; (2) Budget Proposal. Source: Ministry of Finance.

The Budget Proposal for 2020 envisages gross financing needs of AKZ 7,879 billion (18.7% of GDP) e net financing needs of AKZ 653 billion (1.6% of GDP). This represents an increase of 78.2% in gross financing needs when compared with the Budget for 2019. This increase is due the higher debt service in the period, which amounts to AKZ 9,699 billion (23% of GDP) when compared with the Revised Budget figure of AKZ 5,333 billion (14.4% of GDP).

The Government is going to continue to allocate a significant part of expenditures to the social sector (16% of total), mainly towards spending on education and healthcare as well as spending related to defense, security and social order (7.6% of the total). Expenditures with the social sector are expected to see an increase of 27.6% relatively to the forecast for 2019 while spending on defense, security and social order are anticipated to increase 21.2%.

Meanwhile, the long-term growth outlook of the country will depend on the implementation of structural reforms. These reforms will be very relevant in order to correct the imbalances that still exist, namely reducing the persistently high dependency from the oil sector, and also improve the business environment to attract more foreign direct investment to the country.

It is worth noting the new Private Investment Law introduced in June 2018 that establishes the guidelines for private investment. This law is applicable to all investments in the country and, contrary to the prior legislation, it does not include any minimum required amount or demand for a local partner. Incentives will be granted depending on the sectors that the investment is made (namely those sectors that contribute to import substitution, increase in exports and economic diversification) and its location.

The Government also launched in 2019 a Privatization Program (PROPRIV) that aims to restart activity in the private sector and reform public finances. In particular, the Government plans to privatize 195 entities/assets in the next four years (2019-22) through the stock market or competitive tenders. The aims of the PROPRIV include (1) promoting macroeconomic stability, (2) improving the productivity of the local economy and (3) distributing in a more equitable manner the income of the country.

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Moreover, BNA introduced in 2019 some key legislation aimed at increasing the amount of credit granted to investment projects that contribute directly and indirectly to the national production and, as a result, reduce the large import dependency. First, the central bank announced that the banks operating in Angola will have to grant credit specifically for these types of projects in an amount equivalent to 2% of their total assets (at the end of the previous year) at a total cost (interest plus commissions) no greater than 7.5%. In addition, the Credit Support Programme (PAC) for the period 2019-22 aims to make it easier to grant credit to the companies operating in the production and commercialization of 54 essential goods for the Angolan population. These goods are defined in the PRODESI program that aims to replace imports with local production and diversify exports.

In sum, after the slight recovery expected in 2020, Angola’s real GDP growth could accelerate to a level more in line with population growth while inflation could slow to single-digits in the next few years. The evolution of economic activity will depend on the improvement in crude production and a faster expansion in the non-oil sector.

Economic diversification remains a key priority for the Government in its strategic objective to gradually replace imports with local production. Activity sectors like construction and public works, financial services (banking and insurance) and other services (telecoms, hotels, retail and distribution) as well as food and manufacturing, saw a rapid expansion some years ago and are expected to return as key drivers for national growth.

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2.2 Private Investment Framework

The new Private Investment Law (“PIL”) was approved in June 2018 under Law n: 10/18. The new PIL sets the guidelines for private investment and is applicable to all investments done in Angola, either foreign or private, without any requirements in terms of minimum invested amount or local partnership.

The new PIL is not applicable to sectors where the regulatory investment framework is governed by a specific statutes (e.g., oil & gas, mineral exploration).

The granting of incentives depends on the activity sector in which the investment is made (i.e., sectors that lead to import substitution, increase in exports and economic diversification) and the Development Areas in which it is located.

According to Presidential Decree n: 81/18, of 19 March 2018, the Agência de Investimento Privado e Promoção das Exportações (Agency for Private Investment and Export Promotion) – AIPEX was created, having the power to, among other things, approve private investment projects.

The PIL sets several priority sectors, namely:

 Education, Technical and Professional Training, Scientific Research and Innovation;  Agriculture, Food and Agro-Industry;  Specialized Health Units and Services;  Reforestation, Industrial Transformation of Forestry Resources and Forestry;  Textiles, Clothing and Footwear;  Hotels, Tourism and Leisure;  Construction, Public Works, Telecommunications and Information Technology, Seaport and Railway infrastructures;  Electricity Production and Distribution;  Basic Sanitation, Solid Waste Collection and Treatment.

The PIL sets several development areas that are eligible for different tax incentives:

Figure 1 – Development Areas

Source: Law n:10/18.

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The investment projects are subject to two different procedure regimes for approval:

Table 3 – Procedural Regimes for Private Investment Approval

Source: Law n:10/18. Investors can choose any of the investment regimes, although the Special Regime is limited to investment projects in priority sectors.

Presidential Decree 250/18 sets up the regulation for the PIL, namely the procedures to access each one of the two regimes.

The existing tax incentives for each regime cover several tax categories, also distinguishing according to geographic zone where the investment project is expected to be undertaken:

Table 4 – Tax Incentives

Subject to the presentation of proof that the investment was undertaken, the new PIL ensures that overseas investors have the right to repatriate:

 Dividends and distributed profits;

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 Proceeds from investment settlements and due compensations;  Royalties and other remunerations related with usage rights.

Foreign investment is also subject to the following rules:

 Shareholders’ loans are limited to 30% of the total amount of the investment made by the incorporated company and can only be reimbursed after three years  The sum of supplementary capital, shareholders’ loans, debt (e.g. bank loans and DFI/ECA financing) and other forms of “indirect investment” are limited to 50% of the total amount of the investment

Specific benefits for special purpose investment vehicles are also foreseen and they include, amongst others:

 Regular assistance in resolving problems which may arise with public authorities during the implementation phase of the projects, regarding granting of visas and other required documentation for the implementation of the private investments (namely, construction and commercial licenses, environmental licenses and authorization's, utilities supply, etc.);  Exemption from payment of fees and administrative costs due by any requested service (including customs) provided by a public authority which is not a public company, for a limited period of 5 (five) years.

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2.3 Infrastructures National Development Plan

The Transport and Logistics cluster plays vital importance in the future economic and social development of Angola. This cluster lays upon the intermodality of various types of transport, significantly wagering on a rail sector that connects seaport and airport infrastructures with a vast road network that allows the coverage of the entire country. The interconnection points between sea, rail and road transport take place in a vast national network of logistics platforms that facilitate the transhipment of goods between the various modes of transportation.

Air and sea transportation play fundamental roles in the north-south relations in the Angolan territory. They are equally important on the international front where Angola intends to have a relevant role in the primary objective of reaching an “integral connectivity of infrastructures of the African continent” set in the African Union’s Agenda 2063.

Today, the importance of having efficient logistics and transport services is widely recognized as these allow the expansion of domestic and international trade, the diversification of exports and imports and the capture of foreign investment. This will ultimately lead to faster growth as well as greater economic and social development for a country. As a result, the new logistics paradigm started to be focused on the end consumer, based on the construction of interoperable and interconnected transportation networks that go beyond national borders and allow the circulation of goods more efficiently and at lower costs.

In the African continent and, in particular, in Angola where the primary objectives continue to be focused on combating hunger and poverty as well as ensuring food self-sufficiency, it is important to proceed towards the ordering of logistical services and the transportation of goods bearing in mind of the following:

1. Define the transport infrastructure network already existing and the one that is to be projected bearing in mind the future network for the circulation of goods that ensures the permanent nationwide supply. This would allow meeting the basic food needs and improving economic activity in all of the 164 existing municipalities; 2. Ensure the different types and utilizations of the transportation network (sea, rail, road and air) as strategic vectors for the future System for the Transportation of Goods; 3. Encourage the partnership between public and private entities in order to promote and manage new logistics spaces. This would be done by attracting investments from well-known logistics operators that would promote Angola as a distributor of goods in the domestic, SADC and world markets.

It is against this backdrop that the Angolan government set the following strategic objectives in the transport sector for the period 2018-22:

 Improve the service and comfort levels of the country’s airports in accordance with the rules set by ICAO/IATA as well as expand, rehabilitate and construct new airports (Luanda, Mbanza Congo, Cuíto-Bié, Cabinda, Lugango and Huambo);  Develop the necessary infrastructure to allow the transport and operation of other maritime activities, promoting the construction and upgrade of seaport infrastructures considered of priority intervention for the national development;  Develop urban, suburban and long-distance rail transportation, offering conditions that will promote the competition between the different modes of transportation of goods;

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 Endow the country with infrastructures that connect and promote the large axis and national corridors through the National Network of Logistics Platforms.

Table 5 – List of Logistics Platforms planned for Angola

Platform Location Province Label Logistics Platform of Soyo Zaire 1 Logistics Platform of Cabinda Cabinda 2 Logistics Platform of Huambo Huambo 3 Logistics Platform of Cuíto Bié 4 Logistics Platform of Lobito Benguela 5 Logistics Platform of Luanda Luanda 6 Logistics Platform of Luau Moxico 7 Logistics Platform of Lubango Huíla 8 Logistics Platform of Matala Huíla 9 Logistics Platform of Lucapa Lunda Norte 10 Logistics Platform of Luena Moxico 11 Logistics Platform of Mbanza Congo Zaire 12 Logistics Platform of Malange Malange 13 Logistics Platform of Menongue Cuando Cubango 14 Logistics Platform of Namibe Namibe 15 Logistics Platform of N´Dalatando Cuanza Norte 16 Logistics Platform of Sudeste Cuando Cubango 17 Logistics Platform of Ondjiva Cunene 18 Logistics Platform of Saurimo Lunda Sul 19 Logistics Platform of Benguela Benguela 20 Logistics Platform of Uíge Uíge 21 Source: National Director Plan for the Transport Sector, MINTRANS.

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Figure 2 – National Network of Seaports and Railways

Source: National Director Plan for the Transport Sector, MINTRANS. The Angolan Government believes that the involvement of the private sector is essential for the execution of the announced targets for the Transport Sector. The Government is focused on attracting strategic investors with high financial capabilities and international experience in the exploration and operation of large-sized transport infrastructures capable of generating value for the national economies.

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3 SEAPORTS SECTOR

3.1 Seaport Activity in Sub-Saharan Africa

Countries in Sub-Saharan Africa (“SSA”) face considerable challenges in the development of their seaports infrastructures. Africa has been a region that has mainly exported raw materials and commodities such as oil, non-precious metals, rare minerals, cocoa, fruit and wood. The export of these goods has been mainly done by sea transport due to the long-distance from the centres where they are consumed.

As a result, seaport infrastructures play a very relevant part in the supply chains of the SSA region. Indeed, the size of the region, coupled with the fact that a lot of countries are not accessible by sea, means that a significant number of seaports have hinterlands, making them critical for the economic development of the region.

Seaport activity in SSA faces challenges and restrictions that limit its normal functioning and the economic contribution that it could generate, namely:

• Reduced efficiency in terms of stowage and storage; • Public control of the companies/seaport management companies limits the financing capabilities to upgrade/renovate infrastructures; • Lower cargo volumes compared with other regions of the world; • Deficiencies or absence of connectivity with other modes of transportation; • Transport logistics hampered by the current state of road networks and large distances; • Need for greater development of road/rail corridors connecting seaports to hinterlands to ease the transport of goods to other regions.

In terms of capacity, there are currently 10 seaports in SSA that handle volumes larger than 500,000 TEUs annually. The seaport of Durban is undoubtedly the one that handles the largest volumes, exceeding 2.5 million TEUs per year. The other nine seaports, including Luanda, handle between 500,000 and one million TEUs annually. It is worth noting that only a few seaports in SSA are able to operate vessels of the Post-Panamax and Super Panamax categories.

Graph 5 – Largest Seaports in Sub-Saharan Africa in 2017, thousand TEUs handled

2 600

1 030 900 940 860 910 710 690 621 520

Source: Report “Strengthening Africa’s Gateways to Trade” from PwC, April 2018. Information gathered according to the last information available from seaport authorities.

Another trend recently witnessed relates to the increased trade between China and countries in SSA. China has been an important importer of commodities (oil, minerals and wood, among

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others) produced in Africa. On the other hand, China has exported manufactured goods to Africa and has granted credit lines associated with the export of goods and services from China. These trade transactions have contributed to the development of sea transportation and seaport infrastructures in Africa.

Angola is the fourth largest economy in SSA, providing significant exporting potential that is yet to be fully exploited. By other hand, due to its location, Angola could offer an entry point for international transport to the southern region of the Democratic Republic of Congo (DRC), Zambia and Botswana, as these countries do not have direct access to the sea.

Figure 3 – Main Seaports and Railway Corridors in Africa

Source: Report “Strengthening Africa’s Gateways to Trade” from PwC, April 2018.

It is against this backdrop that the IFC (from the World Bank group) recently recommended in a diagnostic study about Angola’s private sector that private initiative should play a bigger role in the country’s transport sector. In particular, the IFC suggested that the private sector should have a more relevant presence in those areas that provide greater potential such as sea and air transport, as these are the most important entry points to the country.

Indeed, there are already several international seaport operators in Africa, with APM Terminals having a presence in Angola through the operations in the container terminal in the Port of Luanda and another in the Port of Namibe (both through Sogester):

Table 6 – List of Africa’s Largest Seaport Operators

Operators Seaport Terminals under operation

APM Terminals  13 container terminal concessions: Angola (2), Benin (1), Cameroon (1), DR Congo (1), Egypt (1), Congo (1), Guinea (1), Ivory Coast (1), Liberia (1), Morocco (1) and Nigeria (2)

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Operators Seaport Terminals under operation Bolloré  12 container terminal concessions: Ivory Coast (1), Cameroon (2), Ghana (1), Nigeria (1), Gabon (1), Congo (1), Benin (1), Sierra Leoe (1) , Togo (1), Guinea (1) and Comoros Islands (1) Transnet  Owner and operator of 16 terminals in 7 South African seaports DP World  7 seaport concessions in Egypt (1), Djibouti (1), Argel (2), Somalia (1), Mozambique (1) and Senegal (1)  1 concession in the Rwanda logistics centre ICTS  2 seaport concessions in Congo and Madagascar Hutchinson Ports  3 seaport concessions in Egypt (2) and Tanzania (1) COSCO  1 seaport concession in Egypt (20% of the container terminal in the Suez Channel, controlled by APM) China Merchants Group  1 seaport concession in Togo

Source: Public Information.

3.2 Seaport Infrastructures in Angola

The National Network of Seaports in Angola is currently made of five seaports strategically located from north to south along the Atlantic coast of the country.

Figure 4 – National Network of Seaports and Railways

Source: National Development Plan of Angola (“PND 18-22”) The current seaports in Angola include: (1) Port of Luanda; (2) Port of Cabinda; (3) Port of Lobito; (4) Port of Soyo; and (5) Port of Namibe.

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The country’s National Development Plan 2018-22 (“PND 18-22”) envisages the construction of three additional seaports, namely the Port of Caio in Cabinda (6) (intended as a container terminal), the Port of Barra do Dande (7) in Bengo and the Port in Porto Amboim (8).

The Port of Luanda is the seaport that records the largest cargo turnover yearly, as it serves the most populated city and province of the country, Luanda. The second seaport is Port of Lobito, which supplies Angola’s Planalto Central region along the Benguela railway.

The Port of Luanda has railway connection to the city of Malange, located inland of the country at more than 380km from the capital. The PND 18-22 envisages the extension of the railway to the city of Saurimo and the construction of a railway branch to the border city of Dundo, which will allow the creation of another transport corridor to the DRC.

The Port of Lobito is nowadays the only seaport that has a railway connection with a border country to Angola, namely the DRC, therefore offering potential to handle imports and exports of goods and raw materials from the southern region of this neighbouring country. The PND 18- 22 includes plans to build a railway section that will also allow the connection to the actual railway infrastructure (CFB) to Zambia.

The EN-100 is the road axis that crosses the length of Angola from north to south along the coast line and provides access to all the major seaports of the country (Luanda, Lobito, Namibe, Soyo and Cabinda).

3.2.1. Port of Luanda

The Port of Luanda is located in the bay of the city of Luanda, offering excellent navigability conditions and for operating sea transport vessels. On the regional front, its location in the middle of the west coast of the African continent makes the infrastructures of the Port of Luanda a mandatory stop in the sea routes to the west of the continent.

The port is managed by Empresa Portuária de Luanda, E.P., a public company responsible for granting concessions to operate the various existing cargo and passenger terminals. Currently, it is the largest seaport infrastructure in the country, as it is responsible for more than 80% of the turnover of the cargo transported by sea in the Angolan territory.

The government is considering reforming the Port of Luanda (where most of Angola’s trade takes place) considering that:

• Stowage activities could be handled by private operators instead of public companies in order to achieve productivity gains; • A new master plan will be developed for the Port of Luanda with the aim of giving more efficient use of the stowage activities and available storage space in order to reinforce the overall cargo handling capabilities of the seaport infrastructure.

A diagnostic study about Angola’s private sector elaborated by the IFC shows that the average number of days that a ship stays in Luanda (12) remains high comparing to best international standards. However, it is in line with other seaports in Africa such as Dakar (13 days), Abidjan (11 days) or Lome (9 days).

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Graph 6 – Average Stay (days) for Ships in selected African Seaports, 2017

13 12 11 9

Luanda Dakar Abidjan Lomé Source: IFC diagnostic study on Angola’s private sector. However, sea freight to Angola is significantly more expensive than to other seaports. For instance, the sea freight from Le Havre (in northern France) to Abidjan or Dakar is half of the amount that it is to Angola while for Lagos it is two-thirds of the amount. This is due to several reasons, such as: (1) lower competition of alternative corridors (Lagos, for instance, competes with Cotonou), (2) the local costs in Angola are higher, (3) the lower productivity of the stowage, (4) the informal trade agreements among shipping lines and (5) own country risk.

As a result, there is great potential for improvement in terms of cost efficiency considering that a significant number of the reasons aforementioned could be resolved with decisions taken by the Angolan authorities and the involvement/investment of the private sector. These includes measures to tackle (1) bottlenecks at the seaport, (2) decrease required time for cargo unloading, provide solutions for the (3) lack of trucks to transport the cargo, (4) road and railway traffic inland that lead to part of the port of Luanda being used as storage area and, as a result, requiring the need to resort to dry ports in order to solve these bottlenecks (namely, in handling empty containers).

Chapter 4 presents a more detailed description of the Port of Luanda.

3.2.2. Port of Lobito

The Port of Lobito is a deep-water seaport with five different types of terminals:

• General Cargo Terminal – not concessioned; • Refrigerated Containers Terminal – not concessioned; • Containers in Dry Port Terminal – not concessioned; • Mining Terminal – not concessioned; • Support Terminal.

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Figure 5 – Map of the Port of Lobito and its Existing Terminals

Among the existing equipment in the Port of Lobito, the following standout: • 25 lifting cranes with capacity from up 3 to 22 tons; • One moving crane and 1 lifting crane; • 44 forklifts; • Six seaport trucks; • Other equipment for general cargo handling.

The mining terminal has a railway connection to the Benguela railway linking Lobito to the mining regions of the DRC and Zambia.

3.2.3. Port of Cabinda

The Port of Cabinda is located 400km north of Luanda, 220km southwest of Matadi and 200km north of the city of Ponta Negra. It has a population of more than 15 million. The seaport was built back in 1953 while in 1962 it was upgraded to the commercial seaport category. The main cargo handled in the Port of Cabinda after 1953 includes wood, coconut, coffee and minerals. The port also have a passenger terminal.

The Port of Cabinda includes the following infrastructures and equipment: • Two storage facilities of 1,000 squared-meters; • Storage area of 24,357 squared-meters with capacity of 8,000 TEUs, with reinforced concrete (5,170 squared-meters) and cement (19,187 squared-meters) pavements; • New pier bridge: dock with 110 meters length, 32 meters wide and 5 meters high; total length of 319 meters (fixed and mobile bridge); pneumatic rubber defenses; gross/net tonnage of 5,017/1,500 tons, dynamic strength capacity of 4,800 tons; 8 bollards, 4 bow anchors of 28 tons, 2 lateral edge anchors of 14 tons and 2 tail anchors of 28 tons; • Sea access: 2,400 meters long, 80 meters wide and 7.5 meters ZH deep.

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Figure 6 – Map of the Port of Cabinda

The Port of Cabinda welcomed 388 vessels (long-haul, coasting and oil tankers) during 2018, processing 17,552 containers and 256 thousand tons of cargo.

In 2012, Caioporto SA was founded as a specific vehicle for the development and construction of the new Port of Caio, with an estimated investment amounting to US$ 800 million. The company was awarded the financing, planning, projecting, building and management of the port of Caio under the terms and conditions of the concession agreement signed between a private entity and the Angola’s Ministry of Transports. Caioporto SA is currently held by the country’s Sovereign Wealth Fund (Fundo Soberano de Angola).

The project is being developed in two stages, with the first stage of the Port of Caio (located 8 km from the Port of Cabinda) expected to be ready in 2020 in an area of 150 hectares with the following characteristics:

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Figure 7 – Layout of the First Stage of the Future Port of Caio

 Length of the wall of the commercial seaport: 630 meters;  Bridge and access pier to the seaport terminal with 2km length;  Access channel: 180 meters high; 15.5 meters deep;  Handling capacity of 60 containers/hour per docking pier;  Docking basin: 200 meters wide; 14 meters deep.

The second stage of development of this project will require the following characteristics: • Docking pier of 1.130 meters long and 16 meters deep (docking of 4 large ships simultaneously) with capacity to welcome some of the world’s largest ships; • Access channel: 200 meters wide; 18 meters deep.

Figure 8 – Layout of the Second Stage of the Future Port of Caio

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3.2.4. Port of Namibe

The Port of Namibe includes two terminals with the following characteristics:

• Container Terminal:

- Total area of 135 thousand square meters and 875 meters of continuous pier;

- Container storage area of 12,150 square meters;

- Electric cranes throughout the pier;

- Connection to Moçâmedes railway through the mining terminal Saco-Mar

• Mining Terminal: this infrastructure currently works as the main fuel and lubricant terminal for Sonangol in the southern part of the country. The terminal has a pier that is 525 meters long and 19 meters deep. It currently handles cargo consisting of fuel and its derivatives weighing about 300 thousand tons.

Figure 9 – Map of the Port of Namibe and Existing Terminals

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This port was recently subjected to modernization works that will allow 30 to 35 movements per hour. Its standstill capacity was increased from 1,700 to 2,700 TEUs and its refrigeration connections from 25 to 100 power plugs. These works also included the rehabilitation of 240 meters of the pier and paving the existing container park.

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3.3 Angolan Seaport Sector in Numbers

The volume of cargo handled in the ports of Angola has been gradually decreasing since the year 2014 at an average annual rate of -13.9%.

In recent years, the volume of cargo handled in the ports of Angola reached its peak in 2014, reaching 18,289 thousand tons, of which 71% were handled in the Port of Luanda, 16% in the Port of Lobito, 7% in the Port of Namibe and the remaining 6% handled between the Ports of Cabinda, Soyo and Amboim.

Graph 7 – Cargo Volumes Handled in the Ports of Angola between 2012 and September 2019

1% 18,289 2% 7%

2% 13,078 16% 11,852 2% 11,638 3% 3% 4% 10,717 2% 10,042 3% 5% 13% 3% 3% 9,366 11% 3% 3% 2% 12% 8% 3% 10% 1% 23% 16% 2% 7,311 3% 9% 16% 18% 24% 2% 71% 16% 8% 19%

56% 65% 71% 69,3% 54% 67% 71%

2012 2013 2014 2015 2016 2017 2018 Jan. - Sept. 2019

Luanda Lobito Namibe Cabinda Amboim Soyo

Source: Research and Strategic Planning Bureau, Ministry of Transports of Angola

In 2018, the total volume of cargo handled in Angola reached 10,042 thousand tons. Although the drop in cargo handled was witnessed in all of the country’s seaports, the decreasing trend was more pronounced in the largest seaport, Luanda (CAGR -14.6%) and in the smaller seaports such as Cabinda, Soyo and Amboim (combined, CAGR -27.2%). The declines were not as significant in the Port of Lobito (CAGR -10.9%) and in the Port of Namibe (CAGR -7.4%).

This performance meant that the Port of Luanda, which clearly remains as the main seaport for entry and exit of cargo in Angola, had a lower share of the total cargo handled in the country (69% in 2018). It also meant that the smaller seaports reached a combined total of less than 3% of the handled cargo. On the other hand, the Ports of Lobito and Namibe, which in 2014 accounted for 23% of the total goods handled in the ports of Angola, were responsible for 28% of the total goods handled by Angolan seaports.

Between January and September 2019, 7,311 thousand tons were handled in the ports of Angola, with 71% handled in the Port of Luanda.

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3.4 Regulatory Framework of the Seaport Sector in Angola

The maritime-seaport sector in Angola is governed by Law 27/12 of 28 August, denominated “Lei da Marinha Mercante, Portos e Actividades Conexas” (“Law of Merchant Navy, Seaports and related Activities”). This law regulates all activities developed in the maritime and seaport jurisdiction areas, in the scope of the sectors of the merchant navy, recreational maritime activities and nautical sports and of seaports, in connection and integrated with transports and logistics activities.

The Instituto Marítimo e Portuário de Angola (IMPA) (or Maritime and Seaport Institute of Angola), with its Organic Statute approved under Presidential Decree n: 328/14, 29 December, acts as sector regulator, under the supervision of the Ministry of Transports. It exercises its competences in the fields of merchant navy, recreational navy and nautical sports, seaports, navigation and maritime security, economic activities in the scope of marine sectors, rivers, lakes and seaports, as well as supervises and regulates activities developed in this sector.

It is also worth highlighting Law n: 9/98, 18 September, of the Seaport Domain, that aims to define the framework of the seaport public domain, establishing the need to elaborate a Master plan for Seaport Management, as well as a legal framework of the works and activities of individuals in the areas of seaport jurisdiction.

Decree n: 53/03, of 11 July, approves, the Seaport Exploration Regulations, containing the fundamental rules to be observed in the management/utilization of Seaports in Angola.

3.4.1 Regulatory Framework of Seaport Concessions

Under Law n: 11/13 of 3 September – Lei de Bases do Sector Empresarial Público (Basic Law for Public Sector Enterprise), the Ports in Angola are formed of Public Enterprises governed by their own legislation, with patrimonial, administrative and financial autonomy. Their revenues are collected through the implementation of the Seaport Tariff Regulation (Combined Executive Decree n: 323/08 of 16 December, complementing Combined Executive Decree n: 19/09 of 12 March) to the services provided to the clients involved in the transport and logistics chain.

In the case of Luanda, the Empresa Portuária de Luanda, E.P. (EPL), in the exercise of its competences in the management, administration and seaport authority (Decree n: 26/98, of 14 August, that approves the Organic Statute of the EPL), acts as Licensing Entity, in the scope of signing of seaport Concession Contracts. EPL also grants other legal and private entities the exploration of the activity area and associated services with seaport activity, always under the applicable legislation, namely the Lei dos Contratos Públicos (Law of Public Contracts), Law n: 9/16, of 16 June, that sets the legal regime for the elaboration and execution of those contracts, and Decree n: 52/97, of 18 July, about the General Basis for Seaport Concessions, that defines the general regime applicable to concessions of this nature.

3.4.2 Others

Legislation about environmental matters in the exploration of seaport infrastructures: a) Law n.º 5/98, of 19 June –Lei de Bases do Ambiente (Environmental Law);

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b) Decree n: 51/04, of 23 July – about Environment Impact Assessment; c) Decree n: 59/07, of 13 July – about Environment Licensing; d) Presidential Decree n: 194/11, of 7 July – Regulations about Environmental Damage Responsibilities; e) Presidential Decree n: 141/12, of 21 June – Regulations to Prevent and Control Pollution of National Waters; f) Presidential Decree n: 190/12, of 24 August – Regulations about Waste Management; g) Decree n: 1/10, of 13 January – about Environmental Audits; h) Resolution n: 49/ 05, of 3 October – Stockholm Convention about Solid Organic Pollutants; i) Resolution n: 14/17, of 28 March – United Nations Convention about Climatic Changes (Kyoto Protocol); j) Resolution n: 41/01, 21 December – Membership to the International Convention for the Prevention of Pollution by Ships (Convention MARPOL 73-78).

International Conventions about Maritime Security and Seaport Management prevailing in Angola: a) African Charter on Maritime Transportation; b) United Nations Convention on Sea Law; c) International Convention of 1952 for the unification of certain rules relating to Arrest of Sea-going Ships; d) International Convention of 1969 on Civil Liability for Oil Pollution Damage; e) International Convention of 1971 for the Prevention of Pollution from Ships and Protocol of 1978 •MARPOL•1978 f) International Convention of 1972 about Container Security, amended CSC-72; g) International Convention of 1990 on Oil Pollution Preparedness (OPRC90); h) International Convention of 1990 on Oil Pollution Response and Cooperation (OPRC90); i) International Convention of 1992 on Civil Liability for Oil Pollution Damage; j) International Convention of 1992 on the Establishment of an International Fund for Compensation for Oil Pollution Damage •FUND PROT 92 or FUND­92; k) International Convention of 1996 on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea; l) International Convention of 1973 for the Prevention of Pollution from Ships (“MARPOL 73/78”); m) International Convention to Safeguard Human Life at Sea (SOLAS•1974 and respective protocols); n) International Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels; o) International Convention on Maritime Search and Rescue - SAR•79;

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p) Convention on the International Regulations for Preventing Collisions at Sea (COLREG•1972 and respective amendments from 1981); q) International Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels (1910); r) Protocol of 1992 that amends the International Convention on Civil Liability for Oil Pollution Damage (“CLC1969”); s) Protocol of 1992 that amends the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (“FUNDO”); t) Protocol of 1996 that amends the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter; u) International Regulations of 1972 for Preventing Collisions at Sea (“COLREGS”), amended in 1981.

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4 PORT OF LUANDA

4.1 General Description

The Port of Luanda is located in the harboured bay of Luanda under the coordinates: 8º 47’ S latitude and 13º 14’ E longitude. The existence of Ilha do Cabo provides natural and excellent protection against maritime tides and swells in the region, allowing the bay to have optimal conditions to manoeuvre and dock vessels.

The port has 2,738 meters of docking pier. The maximum draft of the approach channel is 9.5 meters. The depth is bigger along the quay, varying between 10.5 meters and 12.5 meters, except in the cabotage terminal, where the draft ranges from 3.5 meters to 5.5 meters.

The docking pier is split into 7 terminals and a logistics platform that supports the oil industry:

Figure 10 – Map of the Port of Luanda and Terminals1

The seaport infrastructures in Luanda are under the responsibility of Empresa Portuária de Luanda E.P. (“EPL”). EPL is a public company whose mission is to plan, manage, regulate, oversee and promote the Port of Luanda ensuring (1) the security of people and goods, (2) economic, social and environmental sustainability and (3) seaport infrastructure services in Luanda.

The social objective of EPL includes:

 International trade and cabotage services in the country;  Loading and unloading of goods and respective storage;  Ancillary service provider to the cargo and navigation operations;

1 Does not include Shipping Terminal

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 Control and supervision of installed or to be installed industries within the port area, in all that is related with the security and efficiency of port operations;  Environmental protection.

The Port of Luanda is managed under a Landlord Port regime. The EPL currently has five concessioned Terminals, with four of them in public service regime and one in private regime dedicated to supporting the oil industry, all of them operating 24/24 hours per day.

Table 7 – Terminals and Concessionaires of the Port of Luanda

Concession Quay Area Concessionaire Deadline Passenger 46.15 meters 4,090 sqm IMPA n.a. Terminal General Cargo 900 meters 20 years Terminal 80,000 sqm Multiterminais (depth: 5.5m-10m) (2005-2025) (GCT) Multivalent 536 meters 20 years Terminal 178,641 sqm Unicargas EP (depth: 10m) (2005-2025) (MVT) Container 550 meters 20 years 142,467 sqm Sogester SA Terminal (CT) (depth: 10.5m-12.5m) (2007-2027)

Multipurpose 610 meters Concession terminated 229,100 sqm Terminal (MT) (depth: 12.5m) (Soportos SA)

Cabotage 7.80 meters n.a. Inoperative Terminal Terminal (depth: 3.5m) Oil & Gas 2.064 meters 1,597,544 25 years Sonangol EP Terminal (depth: 12.5 m) sqm (1995-2020) Source: EPL.

4.2 Main seaport infrastructures

4.2.1 Passenger Terminal The passenger terminal is managed by Instituto Marítimo e Portuário de Angola (Maritime and Seaport Institute of Angola). It has an area of 4,090 sqm and three pier bridges with each having docking capacity of two ships such as catamaran.

4.2.2 General Cargo Terminal (GCT) The General Cargo Terminal (GCT), concessioned to Multiterminais, is intended to handle liquid and solid bulk and cereals. It has an embankment area of 80,000 sqm and a coasting pier of 900 meters with depths that vary between (-5.50 m) ZH and (-10.50 m) ZH. A mill industry was built inside terminal facilities.

The terminal has capacity to handle cargo in bulk or bagged from vessels that have their own crane. It does not have its own storage facilities, except for cereals, meaning that the cargo loading and unloading operations have to be done directly from and to the trucks.

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Table 8 – List of Existing Equipment in the General Cargo Terminal

Existing Equipment in the Terminal Qty Maximum Capacity

Mobile Crane 1 30 tons Mobile Crane 1 40 tons Mobile Crane 1 80 tons Reach Stacker 4 45 tons Gooseneck 4 60 tons Tugmaster 8 40 tons Forklift 11 3 to 37 tons Source: Logistics Capacity Assessment (LCA), World Food Programe.

Multiterminais is the company responsible for operating the GCT and results from a partnership between the Angolan company Copinol and NileDutch Africa Line.

The company employs a total of 527 workers. It has one maritime access and three land accesses.

4.2.3 Multivalent Terminal (MVT) The Multivalent Terminal is intended to operate simultaneously general and container cargo. The terminal has an area of 178,641 sqm of embankments and a coasting dock of 536 m. It has depths of (- 10,00 m) ZH and the quay is adapted for stowage operations from RO-RO ships.

Table 9 – List of Existing Equipment in the Multipurpose Terminal

Existing Equipment in the Terminal Qty Maximum Capacity

Reach Stackers (Kalmar;Terex) 13 45 tons Tugmaster 15 30 tons Trailers 6 30 tons Semi-Automatic Spreaders 19 20 a 40 tons Forklift 6 30 tons Source: Logistics Capacity Assessment (LCA), World Food Programe.

The terminal has a covered area of 10,500 sqm for storing palletized cargo and 60 electric plugs for refrigerated containers. The outside embankment has a storage capacity up to 3,000 TEUs (full) and also has a car park with maximum capacity of 600 units.

The average productivity of the terminal is 13 TEUs/hour.

It has one maritime access, one emergency access and one land access that connects with the port hinterland.

Unicargas is the concessionary company of the MVT and it is a public entity that is under the supervision of the Ministry of Transports of Angola. Besides the seaport operation, Unicargas also provides road transport services through its own fleet.

This terminal employs a total of 325 workers.

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4.2.4 Container Terminal (CT) The Container Terminal is intended to handle only goods that are inside containers. This terminal is concessioned to Sogester and occupies an area of 142,467m2 of embankments and a coasting dock of 550 meters with depths that vary between (-10,50 m) ZH and (-12,50 m) ZH.

The terminal has an average productivity of 50 containers/hour and a storage capacity of 4,620 TEUs (full) and 5,000 TEUs (empty), with 400 electric plugs for refrigerated containers.

It has one maritime access, one emergency access that connects to other terminals and two land accesses.

Table 10 – List of Existing Equipment of the Container Terminal

Existing Equipment in the Terminal Qty Maximum Capacity

Mobile Crane 3 104 tons Tugmaster 17 50 tons Reach Stacker 5 45 tons Empty Container Handler 3 n.a. Forklift 1 n.a. Spreaders 10 n.a. Source: Logistics Capacity Assessment (LCA), World Food Programme Sogester also has two second-line terminals located in Panguila and Via Expresso. The Panguila terminal has an area of 45 hectares with 400 electric plugs for refrigerated containers. The Via Expresso terminal has 14 hectares and 380 plugs for refrigerated containers.

Sogester is a partnership between the multinational company APM Terminals (51%) and GEFI S.A (49%).

The terminal employs a total of 752 workers.

4.2.5 Multipurpose Terminal (MT) The Multipurpose Terminal is intended to simultaneously operate general and container cargo.

Concessioned to Soportos until recently, it occupies an area of 229,100 m2 of embankments, with a coasting dock of 610 m with an average depth of (-12,50 m) ZH.

The terminal has one sea access, one land access that connects with the hinterland of the port and one access that connects to the Oil & Gas Terminal.

This terminal employs 725 workers.

More details about the Multipurpose Terminal will be provided in Chapter 5.

4.2.6 Cabotage Terminal This terminal is intended for commercial cabotage activities, as soon as the construction and equipment works to support its operations are concluded. The Cabotage Terminal has the following premises:

 A coastal front of 260 meters long (under construction);  An embankment of 27,650 m2;

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 Premises for Piloting, Towing and Mooring services with 1,080 sqm (EPIBAL and EPINOSUL);  A warehouse with an area of 2,250 sqm (half concessioned to Logistics).

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4.3 Operational Activity Performance of the Port of Luanda

4.3.1 Vessel Traffic in the Port of Luanda Throughout 2018, 3,719 vessels docked in the Port of Luanda, with 555 of these being long-haul vessels and 3,164 supply boats mostly related to the oil industry. Relatively to the previous year of 2017, the total number of vessels docking in the Port of Luanda fell by 422 while, since 2015, the number of vessels dropped by an average annual rate of 17%.

Table 11 – Vessel traffic in the Port of Luanda (number of ships)

Type of Vessel 2015 2016 2017 2018 1st S 2019 CAGR (15-18) Long-haul 900 732 633 555 302 -15% Cabotage 5,662 3,890 3,511 3,164 1,726 -18% Total 6,562 4,622 4,144 3,719 2,028 -17% Source: EPL.

The frequency of arrivals of long-haul vessels in 2018 stood at 1.5 vessels/day, which represented a decline of 12% relatively to the previous year.

In terms of cabotage vessels, the frequency of arrivals was 10% lower in relation to 2017, with the number of arrivals standing at 8.7 ships/day.

The lower frequency of vessels arrivals to the terminals of the Port of Luanda was largely justified by the slowdown in the Angolan economy and the decreasing activity in the oil sector that followed the sharp drop in international oil prices. This led to a strong reduction in the level of imported goods and the transport of oil and its by-products by sea.

The terminal that supports activity in the oil sector is the main responsible for the vessel traffic in the Port of Luanda, accounting for 85% of total traffic in the port in the last four years.

Graph 8 – Vessel Traffic per Terminal (number of ships)

5,752

3,963 3,572 3,232

1,758 316 198 102 62 106 186 306 297 53 52 30 10299 66 16399 75 52 246121 18 21 12 15 1

GCT MVT CT MT Oil & Gas Cimangola Terminal

2015 2016 2017 2018 1st Sem. 2019

Source: EPL.

Excluding the terminal that supports activity in the oil sector, the terminal with the most vessel traffic in the last two years was the Multipurpose Terminal, with 297 and 246 vessels in 2017 and 2018, respectively.

The Navigation Agencies with the highest traffic of long-haul vessels in 2018 were Niledutch with 68 vessels, Maersk with 63 vessels and Panalpina with 49 vessels. In the previous year (2017),

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Niledtuch was again the Navigation Agency with the largest traffic of long-haul vessels (134 container vessels), followed by Maersk with 82 vessels and MSC with 72 vessels.

Table 12 – Traffic of Long-haul Vessels by Navigation Agency

General Container Ro-Ro Other TOTAL Cargo Vessels Vessels Vessels Agents 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 All Brokerage 0 0 0 1 0 0 0 0 0 1 AMT 2 0 0 0 0 0 0 0 2 0 ANNA 14 4 2 1 0 0 0 0 16 5 Bolloré Ports 14 12 20 7 13 9 2 1 49 29 CMA CGM 0 5 64 37 0 6 0 0 64 48 GAC 8 3 0 40 2 0 1 0 11 43 GARI 0 0 0 0 0 0 0 1 0 1 GETMA Shipping 25 12 0 0 0 0 0 0 25 12 Grimaldi 0 0 0 0 31 11 0 0 31 11 Hull Blyth 12 24 0 0 4 2 0 1 16 27 Kuena + Nagel 7 4 0 0 0 10 0 0 7 14 Kremlin 1 7 0 0 0 2 0 0 1 9 Leman 0 3 0 0 0 0 1 1 1 4 Maersk 0 0 82 63 0 0 0 0 82 63 Manubito 0 0 0 2 0 0 0 10 0 12 Marine Serv 0 0 0 0 0 0 0 0 0 0 Megalog 0 0 0 0 0 0 0 0 0 0 MSC 0 0 72 31 0 0 0 0 72 31 Naiber 5 2 19 11 0 0 0 0 24 13 Niledutch 0 4 134 64 0 0 0 0 134 68 Orey 26 21 3 14 10 2 0 0 39 37 Panalpina 0 3 0 46 0 0 0 0 0 49 Prodiaman TNB 0 17 0 3 0 6 0 2 0 28 Secil Marítima 1 0 0 0 3 0 0 0 4 0 Seatrade 24 6 2 0 0 0 6 2 32 8 Senamar 4 1 0 0 0 0 0 0 4 1 Sharaf 0 11 0 0 2 6 3 3 5 20 Supermaritime 3 4 0 0 0 0 5 5 8 9 Strurrock 1 1 0 0 0 4 0 1 1 6 SNMA 0 0 0 0 0 0 1 0 1 0 TLC 4 5 0 0 0 0 0 1 4 6 Total 151 149 398 320 65 58 19 28 633 555 Source: EPL.

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Table 13 – Traffic of Long-haul Ships by Navigation Agency (1st Semester 2018 vs. 1st Semester 2019)

General Container Ro-Ro Other TOTAL Cargo Vessels Vessels Vessels Agents 1S 18 1S 19 1S 18 1S 19 1S 18 1S 19 1S 18 1S 19 1S 18 1S 19 All Brokerage 0 0 0 0 0 0 0 0 0 0 AMT 0 0 0 0 0 0 0 0 0 0 ANNA 4 5 1 0 0 0 0 0 5 5 Bolloré Ports 6 7 7 2 9 5 0 1 22 15 CMA CGM 0 0 34 41 0 0 0 0 34 41 GAC 3 0 0 0 0 0 0 0 3 0 GARI 0 0 0 0 0 0 0 1 0 1 GETMA Shipping 12 10 0 1 0 0 0 0 12 11 Grimaldi 0 0 0 0 11 8 0 0 11 8 Hull Blyth 7 1 0 0 2 2 0 1 9 4 Kuena + Nagel 4 2 0 0 0 0 0 0 4 2 Kremlin 0 0 0 0 0 0 0 0 0 0 Leman 0 0 0 0 0 0 1 26 1 26 Maersk 0 0 26 35 0 0 0 0 26 35 Manubito 0 0 0 0 0 0 0 0 0 0 Marine Serv 0 0 0 0 0 0 0 0 0 0 Megalog 0 0 0 0 0 0 0 0 0 0 MSC 0 0 31 24 0 0 0 0 31 24 Naiber 2 1 12 15 0 0 0 0 14 16 Niledutch 4 0 37 53 0 0 0 0 41 53 Orey 20 18 2 2 2 5 0 0 24 25 Panalpina 0 0 0 0 0 0 0 3 0 3 Prodiaman TNB 0 0 0 0 0 0 0 0 0 0 Secil Marítima 0 0 0 0 0 0 0 0 0 0 Seatrade 7 14 2 0 0 0 2 0 9 15 Senamar 1 4 0 0 0 0 0 0 1 4 Sharaf 0 0 0 0 6 3 2 1 8 4 Sontrânsitos 0 1 0 0 0 0 0 0 0 1 Supermaritime 1 1 0 1 0 0 3 4 4 6 Strurrock 0 0 0 0 0 0 0 0 0 0 SNMA 0 0 0 0 0 0 0 0 1 0 TLC 2 3 0 0 0 0 0 0 2 3 Total 73 67 150 174 30 23 8 38 261 302 Source: EPL.

Comparing the first semester of 2019 with the homologous period leads to the conclusion that traffic increased by 41 vessels, representing an increase of 15.7%. This resulted from the 25 increase in the number of refrigerated vessels from Leman, 12 more vessels from Niledutch and the 9 additional vessels from Maersk. On the other hand, the biggest drops in the arrival of vessels were from Bolloré, CMA CGM and MSC Shipping (a drop of 7 vessels each).

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Graph 9 – Vessel Traffic in the Port of Luanda by Navigation Agency (2016 – 1st Semester 2019)

180 169 Other Agents 217 90

Panalpina 49 3 35 Orey 3739 25 2016 123 134 Niledutch 68 2017 53 31 24 2018 Naiber 13 16 1st Sem. 78 72 2019 MSC 31 24 118 82 Maersk 63 35 110 64 CMA CGM 48 41 57 Bolloré 49 29 15 0 50 100 150 200 250

Source: EPL.

4.3.2 Passenger Traffic In 2018, the number of passengers registered in the Port of Luanda reached 85,415 passengers, of which 84,098 were transported in vessels related to the oil & gas industry and only 1,317 passengers were related to long-haul vessels.

Data from the last three years shows that the number of passengers dropped 6% in 2017 from the previous year, but recovered significantly following an increase of 31% in 2018. It is worth noting that the 2017 drop was essentially due to the marked fall in the number of passengers from cruise ships, as these dropped from 13,539 passengers to only 456 passengers.

The number of passengers related to activity supporting the oil industry is still the main reason behind the passenger traffic in the Port of Luanda. This number has been increasing in the last three years, rising from 55,738 passengers in 2016 to 84,098 passengers in 2018. This represents an increase of about 150% in two years.

During the first half of 2019, the number of passengers stood at 47,302, of which 98% relate to operations in the oil sector and only 2% were passengers from cruise ships.

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Graph 10 – Passenger Traffic in the Port of Luanda (2016 – 1st Semester 2019)

84,096

64,905 55,738 46,476

13,539 456 1,317 826

2016 2017 2018 1st Sem. 2019

Cabotage (Support Oil Industry) Cruises (Long-haul)

Source: EPL.

4.3.3 Cargo Traffic The total volume of cargo handled in the Port of Luanda reached 7,081 thousand tons in 2018, representing a decline of 8% relatively to 2017. This drop completely offset the 7% growth recorded in 2017 when it reached 7,703 thousand tons.

Table 14 – Cargo Volume Handled by Type of Goods (2016- 1st Semester 2019)

(thousand tons)

Type of Good 2016 2017 2018 1st Sem. 2019 Liquid Bulk 17 0 2 8 Solid Bulk 820 501 741 269 Fractioned General Cargo 881 801 715 279 Container General Cargo 5,471 6,400 5,624 3,112 Total 7,190 7,703 7,081 3,669 Source: EPL.

The container general cargo is the type of cargo more typically handled in the Port of Luanda, accounting on average for 80% of the total cargo handled in the port. As was the case with the total volume of cargo, the amount of container general cargo also recorded an increase in 2017 (+17%), followed by a decline in 2018 (-12%), although not completely offsetting the growth recorded in 2017.

In terms of the other goods, the volume of cargo handled posted a decline of about 15% between 2016 and 2018.

When comparing the first half of 2019 with the homologous period, the total volume of cargo handled saw a 15% increase on the back of the robust performance in container cargo (+25%).

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Table 15 – Cargo Volume Handled by Type of Goods (1 Semester 2018 vs. 1 Semester 2019)

(thousand tons) 1st Sem. 2018 1st Sem. 2019 Var. (%) Liquid Bulk 0 8 100% Solid Bulk 363 269 -26% Fractioned General Cargo 323 279 -13% Container General Cargo 2,495 3,112 25% Total 3,180 3,669 15% Source: EPL.

In terms of the goods handled by seaport terminal, the Multipurpose Terminal has been the one that has handled the largest volume of cargo, namely 3,044 thousand tons in 2018. The Container Terminal came in second, with 2,500 thousand tons handled in 2018. The combined volume for the two types of terminals (Multipurpose and Container) stood at 5,544 thousand tons, accounting for 78% of the total cargo handled.

Table 16 – Cargo Volume Handled by Terminal (2016 – 1 Semester 2019)

(thousand tons) Terminal 2016 2017 2018 1 Sem. 2019 GCT (Multiterminais) 443 658 521 234 MVT (Unicargas) 299 222 349 193 CT (Sogester) 2,058 2,697 2,500 1,374 MT (Soportos) 3,196 3,572 3,044 1,679 Support Base to Oil Industry 188 151 154 65 Cimangola 1,006 403 513 33 Total 7,190 7,703 7,081 Source: EPL.

The cargo volume handled in the Multipurpose and Container Terminals declined 12% during 2018 from the previous year. However, it stood 6% above the level recorded in 2016.

In terms of the first half of 2019 and its homologous period, the Multipurpose Terminal recorded the highest nominal increase (an additional 373 thousand tons handled) while the Multivalent Terminal saw the largest percentage increase (53%).

Table 17 – Cargo Volume Handled by Terminal (1 Semester 2018 vs. 1 Semester 2019)

(thousand tons) 1st Sem. 2018 1st Sem. 2019 Var. (%) GCT (Multiterminais) 262 324 24% MVT (Unicargas) 126 193 53% CT (Sogester) 1,156 1,374 19% MT (Soportos) 1,306 1,679 29% Support Base to Oil Industry 75 65 -14% Cimangola 254 33 -87% Total 3,180 3,669 15% Source: EPL.

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4.3.4 Container Traffic In the last seven years, container traffic reached its peak in 2014 with a total of 743,976 containers handled in the Port of Luanda. Since then, and due to the crisis that has affected the Angolan economy in following years, the number of containers handled in the Port of Luanda has been declining, reaching its lowest level in 2016 with 401,894 containers (-49% comparing to 2014 numbers).

In 2018, the number of containers handled reached 445,357 units, representing an increase of 15% from 2016, but nearly 40% below the level recorded in 2014.

Graph 11 – Container Traffic in units (2012 – 1st Semester 2019)

Source: EPL.

A similar evolution took place when analysing the performance in terms of container traffic measured in TEUs during the same period. The year of 2014 saw the peak in terms of container handling with 1,055,302 TEUs. In 2018, the containers handled stood at 620,054 TEUs, about 41% lower than in 2014. The lowest level, however, occurred in 2012 with 378,872 TEUs.

Graph 12 – Container Traffic in TEUs

1,055,302 912,898 753,286 683,548 620,054 541,346

378,872 331,161

2012 2013 2014 2015 2016 2017 2018 1st Sem. 2019

Source: EPL.

Just as was the case in terms of goods handled, the Multipurpose Terminal was also the one that recorded the highest reading in terms of TEUs. In 2018, the Multipurpose Terminal handled 312,910 TEUs and was the only one that saw a decline from 2017 (-19%).

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The second largest terminal in terms of container handling in the Port of Luanda is the Container Terminal that handled 268 thousand TEUs in the last two years.

In total, the Multipurpose and Container Terminals accounted for more than 90% of the containers handled in terms of TEUs in the Port of Luanda.

Graph 13 – Container Traffic in TEUs by Terminal

385,382

312,910 267,057 268,910

170,062 144,803

27,525 31,264 3,584 7,446 14,700 1,596

2017 2018 1st Sem. 2019

MVT CT MT Oil & Gas Terminal

Source: EPL.

The total number of containers handled in 2018 reached 445,357 units, nearly 9% below the 491,675 units recorded in 2017.

In terms of the relative performance during the first half of 2019 and its homologous period, there was an increase of 24.1% and 16.8% in the Multipurpose Terminal and Container Terminal, respectively. Both account for 95% of the total number of containers handled in the Port of Luanda during the first half of 2019.

Graph 14 – Container Traffic in TEUs by Terminal (1st Sem. 2018 vs 1st Sem. 2019)

170,062 144,803 137,084 123,933

15,349 14,700 1,764 1,596

1st Sem. 2018 1st Sem. 2019

MVT CT MT Oil & Gas Terminal

Source: EPL.

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Table 18 – Container Traffic by Terminal and type of Container

Year 2017 Year 2018 Total Terminals Container Total (Load + Unload) Total (Load + Unload) Change Full Empty Total Full Empty Total 10 0 0 0 0 0 0 - 20 6,818 6,203 13,021 8,451 7,975 16,426 26% MVT 40 3,864 3,388 7,252 3,966 3,453 7,419 2% Sub-total 10,682 9,591 20,273 12,417 11,428 23,845 18% 10 0 0 0 0 0 0 - 20 53,681 46,440 100,121 54,508 48,680 103,188 3% CT 40 47,977 35,491 83,468 46,225 36,636 82,861 -1% Sub-total 101,658 81,931 183,589 100,733 85,316 186,049 1% 10 0 0 0 0 0 0 - 20 110,279 71,005 181,284 90,681 55,687 146,368 -19% MT 40 57,205 44,844 102,049 44,694 38,339 83,033 -19% Sub-total 167,484 115,849 283,333 135,375 94,026 229,401 -19% 10 1,621 988 2,609 1,619 808 2,427 -7% Oil & Gas 20 1,332 296 1,628 749 289 1,038 -36% Terminal 40 161 82 243 1,991 606 2,597 969% Sub-total 3,114 1,366 4,480 4,359 1,703 6,062 35% 10 1,621 988 2,609 1,619 808 2,427 -7% 20 172,110 123,944 296,054 154,389 112,631 267,020 -10% Total 40 109,207 83,805 193,012 96,876 79,034 175,910 -9% Total 282,938 208,737 491,675 252,884 192,473 445,357 -9%

Year 2016 Year 2017 Total Terminals Container Total (Load + Unload) Total (Load + Unload) Change Full Empty Total Full Empty Total 10 0 0 0 0 0 0 - 20 9,309 5,336 14,645 6,818 6,203 13,021 -11% MVT 40 4,609 2,820 7,429 3,864 3,388 7,252 -2% Sub-total 13,918 8,156 22,074 10,682 9,591 20,273 -8% 10 0 0 0 0 0 0 - 20 48,787 33,037 81,824 53,681 46,440 100,121 22% CT 40 31,447 21,276 52,723 47,977 35,491 83,468 58% Sub-total 80,234 54,313 134,547 101,658 81,931 183,589 36% 10 0 0 0 0 0 0 - 20 92,216 68,680 160,896 110,279 71,005 181,284 13% MT 40 44,673 35,243 79,916 57,205 44,844 102,049 28% Sub-total 136,889 103,923 240,812 167,484 115,849 283,333 18% 10 1,365 739 2,104 1,621 988 2,609 24% Oil & Gas 20 1,486 440 1,926 1,332 296 1,628 -15% Terminal 40 334 97 431 161 82 243 -44% Sub-total 3,185 1,276 4,461 3,114 1,366 4,480 0% 10 1,365 739 2,104 1,621 988 2,609 24% 20 151,798 107,493 259,291 172,110 123,944 296,054 14% Total 40 81,063 59,436 140,499 109,207 83,805 193,012 37% Total 234,226 167,668 401,894 282,938 208,737 491,675 22% Source: EPL.

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5 MULTIPURPOSE TERMINAL OF THE PORT OF LUANDA

5.1 Description of the different relevant activities developed in the Terminal

Historically, the technical and commercial exploration of the MT has been developed in the scope of a concessioned public service. This means that the Seaport Operator (Concessionaire) explores the seaport infrastructure by providing general and non-discriminatory services to all potential users, subject to the respective regulatory control by the EPL (Grantor) and other seaport authorities.

The public service exploration (according to the wording of the latest Concession Contract) includes the following activities:

a. Execution of all loading, unloading, maintenance and storage operations, related to docked vessels and respective cargo, providing all technical and human means;

b. Maintenance of embankments, facilities and equipment of the MT;

c. Ensure the compliance of existing legal and regulatory provisions in the premises of the MT, in what concerns the preservation of the premises, water management and environmental protection.

The concession of public service excludes those activities related with movement and security (docking, mooring, unberthing), which are of the sole responsibility of EPL.

It is worth noting that the MT has been used mostly for containerized cargo handling operations, although it is also authorized and able to operate simultaneously both general cargo and containerized cargo.

5.2 Description of the main infrastructures and equipment

The MT is inserted in a piece of land with a total area of 229,100 sqm, that is an integral part of the seaport complex of the Port of Luanda. The MT is delimited in the north by the Atlantic Ocean, in the south, east and west by the Oil & Gas Terminal, explored by SONILS – Sonangol Integrated Logistics Services, Lda.

The total area of the MT is divided into the manoeuvre zone (next to the docking pier), the container storage area, a workshop area and the truck manoeuvre and parking area.

Access to the Terminal is made through the public road (Estrada do Cacuaco), which is asphalted and in good conditions.

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Figure 11 – Map of the Multipurpose Terminal

5.2.1 Docking pier The docking pier of the MT is 610 meters long, with an average depth of (-12,50m) ZH, that allows the docking of large-scaled vessels, such as container carriers like Panamax. The pier is currently in a good structural situation.

The pier protective fenders installed on the wall of the pier are cone-shaped with a steel panel covered with high density polyethylene (UHMWPE) on the outside that reduces traction when touching the hull of the vessels. These fenders currently present some signs of wear and tear that is recoverable.

The docking pier of the MT has installed TEE-HEAD pier heads, all of which are operational and only need protective painting. The service ladders of the pier are destroyed.

5.2.2 Embankment The embankment of the MT covers 229,100.00 sqm that includes an area continuous to the docking pier that is reserved for ship stowage operations (manoeuvre zone), a reserved area for container storage and a third manoeuvre and parking zone for trucks with about 17 thousand square-meters.

The MT container park has a maximum simultaneously storage capacity of 15,000 TEUs, allowing the stacking of full containers up to five levels. It is also equipped with a fuel pump with a maximum storage capacity of 128 thousand litres of diesel.

In the manoeuvre zone next to the docking pier, the embankment’s approach slab presents gradual flattening. There were 24 large-sized holes located in the container storage area that are clearly signalled, which hampers cargo handling operations.

5.2.3 Dry Port of Mulemba The Dry Port of Mulemba (DPM) will not be an asset to include in the framework of the future Concession. This is an asset held by the old concessionaire Soportos in partnership with an Angolan group, Grupo GEMA. In case the future operator wants to keep using this terminal as a support to the seaport operation of the Multipurpose Terminal, it will have to negotiate the commercial terms and conditions with its current proprietor.

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The DPM is located 16km from the MT and there is an asphalted road connection in good conditions between the MT and Bairro da Uíge that is 6 km away from the second-line terminal. Accesses from here are not asphalted and require recurrent maintenance works.

The DPM has a storage capacity of 14,000 TEUs, with 286 connections for reefers containers. The supply of electricity is done through the public network and the supply of water through the transport of water containers.

The second-line terminal of Mulemba is equipped with a fuel supply pump with a storage capacity of 123 thousand litres of diesel.

5.2.4 Equipment Cargo Handling Equipment

The MT has seven mobile seaport cranes of the German brand LIEBHERR, all operational and fully functional. The LIEBHERR cranes have existing maintenance contracts with the brand, in which was not set up a deadline for termination. Instead, these contracts can be terminated upon a three-month prior notice.

Figure 12 – LIEBHERR cranes and Pier Area

Source: CAC.

Moreover, there are two more seaport mobile cranes of the brand Gottwald that are currently broken down and inoperative, without a set timeframe or expectation of recovery following the diagnosis that was made.

The table below presents a summary of some of the technical characteristics of the existing mobile cranes of the MT:

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Table 19 – List of existing Mobile Cranes in the Terminal

Maximum Manufacture Current # Brand Model Capacity Year Condition

1 LIEBHERR LHM 400 104 ton 2006 Operational 2 LIEBHERR LHM 400 104 ton 2012 Operational 3 LIEBHERR LHM 400 104 ton 2012 Operational 4 LIEBHERR LHM 550 144 ton 2013 Operational 5 LIEBHERR LHM 550 144 ton 2013 Operational 6 LIEBHERR LHM 550 144 ton 2014 Operational 7 LIEBHERR LHM 550 144 ton 2014 Operational 8 GOTTWALD Inoperational 9 GOTTWALD Inoperational Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

The equipment used to handle the containers inside the terminal (designated as “handling equipment”) include mostly reach stackers, tractors and respective trailers and forklifts. It is worth noting that, in general, all of this equipment is currently in good technical conditions with the exception of the seaport tractors fleet that show significant signs of wear and tear.

The table below presents the existing equipment in each of the locations:

Table 20 – List of existing Handling Equipment in the Terminal

Type of Maximum Manufacture Current Brand Qty Location Equipment Capacity Year Condition

Multipurp. 2 broken- Reach Stacker TEREX 16 45 tons [2008-2017] Terminal down Automatic BROMMA / Multipurp. 9 broken- 29 50 a 60 tons [2007-2015] Spreaders STINNIS Terminal down Seaport Multipurp. 2 broken- SINOTRUCK 20 [2007-2012] Tractors Terminal down Multipurp. 6 broken- Trailers CIMIC/QT 31 [2007-2012] Terminal down Multipurp. All broken- Empty Forklift SANY 3 Terminal down Telescopic Multipurp. MANITOU 1 Broken-down Forklift Terminal Multipurp. Forklift 3 Ton. MANITOU 1 3 tons Operational Terminal Forklift 5 Ton Multipurp. Operational MANITOU 1 5 ton Terminal Forklift 8 Ton Multipurp. Operational BERGMAN 1 8 ton Terminal Forklift 16 Ton Multipurp. Operational BERGMAN 1 16 ton Terminal Dry Port 1 broken- Reach Stacker TEREX 8 45 ton [2008-2017] Mulemba down

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Type of Maximum Manufacture Current Brand Qty Location Equipment Capacity Year Condition Telescopic Dry Port MANITOU 1 Operational Forklift Mulemba Dry Port Trailers CIMIC/QT 2 Operational Mulemba BCA - Empty Forklift SANY 1 45 Ton Operational Kikolo BCA - Reach Stacker TEREX 1 45 Ton [2008-2017] Operational Kikolo Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

Fleet of Light Vehicles

The fleet of light vehicles includes 57 units, as detailed in the table below:

Table 21 – List of existing Light Vehicles in the Terminal

Current Vehicle Description Qty Condition

TOYOTA COASTER (mini-bus) 1 Operational TOYOTA Land Cruiser 13 Operational TOYOTA Land Cruiser Prado 1 Operational TOYOTA Prado 7 Operational TOYOTA Hilux 6 Operational TOYOTA RAV 4 5 Operational CHEVROLET-N300 4 Operational HYUNDAI Tucson 8 Operational MITSHUBISHI Pajero 2 Operational TOYOTA Fortuner 1 Operational HYUNDAI Santa Fe 1 Operational MITSHUBITSHI Canter 2 Operational ISUZU Plateau 1 Operational NISSAN Hardbody 1 Operational RANGE ROVER 1 Operational Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

Electricity generators

The MT also includes several diesel-electric generators. Eight diesel-electric generators of several brands (DEMO, MILLER, and PERKINS-2500) are located in the Multipurpose Terminal and are operational.

Four generators of the brand CATERPILLAR, two generators of the brand SDM and one of the brand MILLER are located in the Dry Port of Mulemba. There is only one generator that is inoperative of the brand CWOERMAN that is located in the second-line terminal. These equipment are not included in the set of assets to be transferred to the Concessionaire.

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Information Technology

The existing seaport management software in the MT is Winport, where the management of the loading and unloading of cargo from container ships is made, as well as the entry and exit of registered containers in the terminal concierge, temperature monitoring of reefers containers and other physical devices, such as weighing equipment and equipment to control the access of people to the terminal (tourniquets).

Table 22 – List of IT Equipment

IT Equipment Multipurp.T. D.P.Mulemba Terra Verde Total

Computers 152 31 42 225 Printers 73 15 22 110 Telephones 58 14 25 97 Servers 14 7 6 27 Switches 23 3 6 32 Routers 3 2 0 5 Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

5.2.5 Water and Electricity Supply

The supply of water is ensured by the extension located in the adjacent terminal belonging to SONILS. The supply of electricity is ensured by a group of generators located in the SONILS terminal, although these are managed by a third party.

The process of installing the connection of water and electricity supply to the public network in the MT is currently ongoing and will be done through the respective installing entity, namely EPAL and ENDE. The Grantor will be responsible for this process.

5.2.6 Security and CCTV Equipment

The MT has 16 qualified security personnel from Direcção de Segurança e Ambiente (Security and Environment Department) that have security and supervision roles in all the perimeter of the premises, such as monitoring the CCTV equipment, verifying documentation in the entry and exit of goods to and from the terminal, control the access of terminal personnel and third parties and intervention in case of entry of non-authorized persons.

The CCTV system is operational and includes 36 cameras (30 fixed and 6 mobile) located in strategic locations of the terminal that allow the permanent monitorization of the premises. There is also a system to control the access of people to the terminal (tourniquets), but it is currently inoperative. The security personnel also have 28 communication radios and 11 mobile phones, all of which are operational.

The terminal premises is not fenced in all of its perimeter, with some locations being fenceless.

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5.3 Description of the current labour force

The labour force of the MT has a total of 725 employees, according to information disclosed in the payroll map from October 2019. The Grantor plans to transfer these employees to the future Concessionaire Company.

The labour force structure includes mostly men (676 men and 47 women) and the average age is 39 years.

Graph 15 – Age and Gender Distribution of the Labour Force

+60 0 7

51-60 1 55

41-50 14 186

31-40 27 368

20-30 6 60

Male Female

Source: CAC. Regarding the work experience of the labour force, the average number of years of experience in the company is 6.2 years with a significant number of employees being affiliated since the start of operations of Soportos.

The majority of workers in the MT finished Secondary School (59%) followed by High School (23%). It is worth noting that 40 employees have an academic degree (Bachelors or College Degree) and 79 employees do not have any literary (“unspecified”).

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Graph 16 – Literacy of the Labour Force

450 427 400 350 300 250

200 163 150 100 79 36 50 16 4 0 Undefined Primary High School Secondary Bachelor Graduate School School Degree Degree

Source: CAC. In terms of organizational structure, the labour force is currently organized as follows:

Graph 17 – Labour Force by Department

Container Tracking Dep. 153 General Maintenance and Technical Assistance Dep. 90 TEREX Operations Dep. 88 Craine Operations Dep. 49 Security Dep. 47 Mangement Board Secretariat 41 Equipment & Machine Dep. 32 Operations & Supervision Dep. 31 Internal Works Dep. 25 Supervision Container Tracking Dep. 22 Transhipment Dep. 20 Private Institutions Comercial Dep. 20 Health & Safety Dep. 19 ICT Dep. 16 Baplie/Baypan Dep. 15 Stationery and Heritage Dep. 13 Tugboat Sector Dep. 11 Accounting Dep. 8 Human Resources Dep. 7 Treasury Dep. 6 Insurance Dep. 4 Projects & Comercial Dep. 3 Litigation Dep. 3 Container Maintenance, Repair and Cleaning Dep. 2

Source: CAC. The monthly cost of the current labour force reached 266,122 thousand kwanzas, with 60% of these representing base salaries paid to employees and the remaining 40% representing subsidies. The subsidies paid include mainly those for transportation, food, attendance and related with performance.

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The monthly base salary varies between a minimum of 128,139 kwanzas and a maximum of 804,083 kwanzas. Including subsidies, total remuneration ranges between 199,851 kwanzas and 1,078,411 kwanzas.

Graph 18 – Minimum and Maximum Monthly Salary, Base and Total, in Kwanzas

1,078,411

804,03

199,851 128,139

Base Monthly Remuneration Total Monthly Remuneration

Min Max

Source: CAC.

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5.4 Operational Activity Performance of the Multipurpose Terminal

Vessel traffic in the MT recorded significant growth between 2013 and 2015, with an average annual growth rate of 19.9%. This growth was largely due to the start of the concession contract with SOPORTOS, that required the execution of investments for the expansion of the handling and storage capacity in the Multipurpose Terminal. It is worth noting that, during this period, the seaport operation turned out to be more efficient with an average ship stopover declining from 3.73 days in 2012 to 1.32 days recorded in 2015.

Table 23 – Vessel Traffic Performance in the Multipurpose Terminal

Vessel Traffic 2012 2013 2014 2015 2016 2017 2018 1S 19 CMA CGM 0 0 5 1 35 51 72 40 Maersk 0 0 0 0 3 10 11 7 MSC 0 0 11 14 56 70 58 24 Niledutch 40 61 57 44 26 56 75 52 Other Agents 108 121 199 247 207 134 37 13 Total 148 182 272 306 327 321 253 136 Growth Rate 23.0% 49.5% 12.5% 6.9% -1.8% -21.2% Avg. Stopover (days)1 3.73 3.14 2.16 1.32 1.35 1.79 1.41 1.99 1The calculation for the average stopover took into consideration the vessel arrival and departure dates. Source: Statistics supplied by SOPORTOS. CAC Analysis.

In the period between 2016 and 2017, vessel traffic in the MT remained stable (between 320 and 330 vessels welcomed annually), despite the increase in demand for seaport services from internationally renowned navigation agents such as CMA, Maersk and MSC. Niledutch has been a regular client of the seaport services provided by the MT, since 2012.

The year 2018 saw a significant decline of 21% in vessel traffic in the MT relatively to the previous year. This was due to the marked drop in oil prices that negatively impacted the performance of the Angolan economy and, as a result, the amount of imported goods.

Considering the data reported for 2018 alone, it is worth noting that the average daily arrivals to the terminal stood at 1.5 vessels. The average stopover time (loading/unloading) for the container vessels stood between 1 and 1.8 days.

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5.4.1 Container Cargo The performance of container cargo handled from 2012 to the end of the first half of 2019 is displayed in the graph below:

Graph 19 – Performance of Containers Handled in TEUs (2012 – 1st Semester 2019)

460,557

385,382 361,449 40.0% 320,778 298,732 312,434 281,751 41.7% 44.8% 43.4% 42,4% 45.8% 47.0% 170,062

60.0% 38.7% 55.2% 58.3% 54.2% 53.0% 56.6% 57.6% 61.3%

2012 2013 2014 2015 2016 2017 2018 1º S. 2019

Full Empty

Source: CAC.

Historically, the handling of full containers is mostly performed in the unloading operations of the vessels, with this cargo classified as imports in Angola.

Graph 20 – Relative Performance of Unloading and Loading Operations in handling of Full Containers, in % (2012 – 1st Semester 2019)

Source: CAC.

On the other hand, the handling of empty containers is mostly done in loading operations, despite the increasing importance in terms of unloading operations witnessed in recent years.

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Graph 21 – Relative Performance of Unloading and Loading Operations in handling of Empty Containers, in % (2012 – 1st Semester 2019)

Source: CAC.

It is worth noting that the Transhipment (“TBT”) operations have represented on average (between 2012 and 2018) 27.7% of the handling of full containers, 0.2% of the handling of empty containers and, on aggregate, 16% of the total handling of containers. The annual performance of this data is described in the graph below.

Graph 22 – Relative Performance of the Transhipment Operations in Cargo handling, in % (2012 – 1st Semester 2019)

Source: CAC.

During the year 2018, the average productivity ratio for stowage operations (loading and unloading) of containers ships stood at 70 TEUs/hour.

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5.4.2 Non-container Cargo The handling of non-container cargo has been residual during the last years of operation of the MT when compared with the annual volume of container cargo. The handling of solid bulk was recorded at an early stage of the previous concession, but these were discontinued after the third quarter of 2014.

Graph 23 – Performance of the Handling of Non-container Cargo in the Multipurpose Terminal (2012 – 1st Semester 2019)

341

thousandsof Tons 199

125

72 77 43 48 0 0 0 n.d. 0 n.d. 0

2013 2014 2015 2016 2017 2018 1º S. 2019

Bulk Cargo General Cargo

Source: CAC.

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5.5 Historical Economic Indicators of SOPORTOS

The exploration of the Multipurpose Terminal during the period 2013-2018 was concessioned to SOPORTOS S.A. The economic indicators of the activity developed by SOPORTOS is presented below. However, it is worth noting that this data represent not only the exploration of the Multipurpose Terminal, but also other activities related to the seaport activity of the Multipurpose Terminal.

Graph 24 –Operating Revenue performance of SOPORTOS between 2013 and 2018

Source: SOPORTOS Annual Reports, between 2013 and 2018.

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5.6 SWOT Analysis

In terms of a SWOT analysis, the following aspects standout that may impact the Multipurpose Terminal:

Table 24 – SWOT analysis of the Multipurpose Terminal

Opportunities Threats

 Geographic location of Angola as a potential  Import reduction plan (PRODESI) gateway to the DRC, Zambia and Botswana  Competition/reaction from other terminals  Commitment of the State in modernizing  Masterplan of the Port of Luanda and new seaports and improving seaports land-use plan of the city of Luanda infrastructures  Lack of dredging of the port by EPL prevents  Export development plan (PRODESI), traffic of large-scale vessels covering sectors like agribusiness and  Existing foreign exchange restrictions (but manufacturing that will generate more in the process of being resolved) traffic in seaports  Development of intermodal logistics platforms should benefit seaport activity  Population growth (3% yearly) and development of a middle class will benefit trading and transportation flows in the medium/long-term  Recovery of the Angolan economy should increase seaport activity

Strengths Weaknesses

 Financially well balanced conditions of the  Need for infrastructure investment (slab, MT (infrastructure, workforce and holes, fenders) and equipment renewal equipment) (tractors and trailers)  Established and regular contact with client  Lack of container gantry cranes portfolio (overseas and domestic)  Lack of scale does not allow economies of  Structure of the labour force / experienced scale and efficiency gains management team of the MT (ex-Soportos)  Difficulties in managing stock of  Own maintenance and technical assistance consumables and spares  Potential for expanding the concessioned  Future concessionaire may have to find a area (adjoining areas to Sonils) solution for a dry port alternatively to the  Seaport tariffs USD denominated Dry Port of Mulemba.

Considering the external backdrop and internal aspects, the Multipurpose Terminal operation is globally an attractive investment opportunity, with potential to overcome risks/threats that may be presented.

6 SUMMARY OF THE TENDERING PROCEDURE

The main terms of the tender procedure are the following:

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Table 25 – Summary Table of the Tender Procedure

Item Description Adjudicator Entity  Empresa Portuária de Luanda, E.P.

Type of Tender  The tender is public, intended for companies or group of companies with proven experience in the activity subject to the tender  The start of the Public Tendering Procedure was formalized through Presidential Order n: 164/19 of 27 September

Tendering Objective  Adjudicate, by celebrating a concession contract for the public service of managing and exploring the Multipurpose Terminal of the Port of Luanda

Proposals Delivery  30 March 2020 Date

Clarifications  Request: until the last third of the deadline granted for the Deadline presentation of proposals  Answer: until the end of the second third of the deadline granted for the presentation of proposals

Provisional Bond  USD 250,000.00

Appraisal Criteria  Current Value of the Grantor Remuneration calculated in accordance with paragraph a) of article 17 of the Tendering Program (70%)  Technical Appraisal elements (30%): o Investment plans to be done by the Concessionaire (50%) considering the following criteria:  Total investment in projects/works and equipment proposed by the bidders, to be done during the Concession period  Percentage of local content of the proposed investments  Adequacy of the proposed investment plan to the expected traffic volume o Adequacy of the terminal organization plan (25%) o Adequacy of the training and professional development of the human resources allocated to the Concession (25%)

Negotiation and  The bidders whose proposals are ranked first and second shall Award of the be selected for the negotiation phase Proposals  Following the negotiation phase the selected bidders shall present their final proposals.

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7 SUMMARY OF THE SPECIFICATIONS

The main terms of the specifications are the following:

Table 26 – Summary of the Specifications

Item Description

Grantor  Empresa Portuária de Luanda, E.P.

Concession Term  20 years

Guarantee  Equivalent to two years of Fixed Rent

Tariff Regulation  The Concessionaire will charge, for payment of the uses and services that it is authorized to provide, tariffs to be fixed within the maximum tariffs limit established in the Port Tariff Regulation of Angola, the Concessionaire being allowed to make commercial discounts  In accordance with the current legislation the tariffs are fixed in USD

Rents of the  The Concessionaire shall pay to the Grantor the following rents: Concession and o On the date of signature of the Concession Agreement, the Payments to the Concessionaire shall pay to the Grantor the amount defined Grantor in point 1 of the annex to Appendix VI of the Tender Program which cannot be lower than of USD 100 million nor higher than USD 150million o A Fixed Annual Rent of USD 3 million o Variable rent calculated by the product of the application of the containerized unit rates of each echelon in the submitted proposal, which may not be lower than the minimum unit rates for each echelon in Appendix VI, Table A of the Tender Program, by the number of TEUs handled listed in Table B of that Appendix and which may not be less than 300,000 TEUs per year. The overall amount of TEUs allocated to each echelon shall be divided between overfill and outbound or inbound cargo, for the respective unit rates given in Table A. This distribution shall be based on the respective ratio of each category to overall amount observed each year; plus o Variable rent calculated by the product of application of the general or special unit load rates, by the respective annual quantities moved in tons, both of which appear in Table C of Appendix VI of the Tender Program; plus

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Item Description o Variable rent determined by the product of applying the special rate unit rates set out in Table D of Appendix VI of the Tender Program, by the amount of general cargo moved annually in number of vehicles  Both fixed and variable rents will be updated annually based on American CPI

Assets assigned to the  Assets assigned to the Concession are considered to be the port Concession infrastructure and port equipment, as well as all rights related directly or indirectly to the Concession, all being identified, including their status, in Appendix VII of the Tender Program

Conservation,  The Concessionaire shall comply with the Concession Maintenance and Investment Plan, submitted with the Tender Development of The  The Concessionaire is responsible for the construction, repair Concession and conservation of the works that make up the establishment, as well as the installation and/ or repair of the equipment necessary for the execution of the Concession Contract

Concession’s  The Concessionaire shall assume the integration of all Workers Personnel identified in Appendix VIII to the Tender Program and which will constitute Appendix to the Concession Agreement. The Concessionaire shall also ensure the seniority of the workstations of each of the Workers concerned and all other rights and obligations that fall under the terms of the employment contracts currently in force between them and the Grantor

Restoring the  The Concessionaire shall be entitled to the restoring of the financial balance financial balance of the contract only in the following cases: o Modification imposed by the Grantor of the Concessionaire's obligations that directly results in an increase in expenses or a loss of the Concessionaire's revenues; o Causes of force majeure as defined in the concession agreement, unless the contract terminates as a result thereof; o Legislative changes of a specific nature that directly result in an increase in expenses or a loss of revenue from the Concessionaire; o When the right to the restoration of the financial balance is expressly provided for.

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Item Description

Force Majeure Events  Acts of war, hostilities, riots, civil war, rebellion or terrorism, blockades, embargoes, strikes and labour conflicts  Blockade of access to the Multipurpose Terminal that extends for more than 30 consecutive days  Pests, epidemics, earthquakes, severe floods, fire, storms or other natural cataclysms  Any legislative change introduced in Angola that prevents the Concessionaire from fulfilling obligations under the Concession

Concessionaire’s  Non-compliance with public service obligations under the terms Events of Default of the contract  Repeated disobedience to the Grantor's determinations in the exercise of its supervisory function  Transfer, subcontracting or assignment of the Concessionaire's contractual position without prior authorization from the Grantor  Failure to comply with judicial or arbitration decisions related to the concession  Failure to provide or replenish deposits within the terms and time limits provided for  Failure to provide the information required by the Concessionaire  Non-payment of fines  Obstruction of sequestration or intervention in case of serious emergency  Delay in fulfilling assumed investment obligations for a period exceeding one year  Non-replacement of the amount of the deposit by the Concessionaire  Presentation of the Concessionaire to insolvency or declaration of the Insolvency of the Concessionaire by the Court  Deviation from the object of the Concession  Abandonment of the construction, conservation or operation of the Concession  Obstruction to Sequestration  Sequestration of the concession for the maximum period legally provided for  Refusal or impossibility of the Concessionaire to resume the Concession following sequestration  Repetition, after the resumption of the Concession, of the situations that motivated the sequestration  Occurrence of serious deficiency in the organization and development by the Concessionaire of the activities

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Item Description concessioned, in terms that may compromise their continuity or regularity under the conditions required by law and the Concession Agreement  Failure to comply with or seriously defect the Concessionaire's human resources obligations, in particular the obligations regarding safety, health and hygiene at work  Condemnation of the Concessionaire for any offense that seriously affects its professional reputation or prevents it from engaging in any of the activities concessioned  Any fraudulent activity intended to harm the public interest

Redemption  The Concession may be redeemed when justified in the public interest, provided that one third of the term of the concession has elapsed, upon written notice to the Concessionaire with at least 6 months advance notice.

Sequestration  The Grantor may assume the management of the Concession if, due to the fact attributable to the Concessionaire, the cessation of the activity is imminent or occurs a serious disruption that jeopardizes the operation of the concession.

Contractual Fines  The concession agreement will set out contractual fines in case of failure by the Concessionaire to comply with or defective fulfilment of any of their obligations arising from the concession agreement or from determinations issued by the Grantor

Settlement of  Negotiations Disputes  Arbitration

Applicable Law  Angolan

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