Conditions for Infrastructure Project Bonds in African Markets
Total Page：16
File Type：pdf, Size：1020Kb
© 2013 African Development Bank Group The views expressed in this book are those of the authors and do not necessarily reflect the views and policies of the African Development Bank (AfDB) or its Board of Governors or its Board of Directors or the governments they represent. The AfDB and its Board of Directors do not guarantee the accuracy of the data included in this publication and accept no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, the AfDB does not intend to make any judgments as to the legal or other status of any territory or area. The AfDB encourages printing or copying information exclusively for personal and non- commercial use with proper acknowledgment of the AfDB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of the AfDB. Published by: The African Development Bank (AfDB) Temporary Relocation Agency (ATR) Angle de l’Avenue du Ghana et des rues Pierre de Coubertin et Hédi Nouira B.P. 323 - 1002 Tunis – Belvédère Tel : (216) 7110-2876 Fax : (216) 7110-3779 Design and layout African Development Bank External relations and Communications Unit(ERCU) Yattien-Amiguet L. Kabasale Justin Printing Imprimerie Maghreb Editions All rights reserved © 2013 The African Development Bank Webpage: www.afdb.org 3 Glossary FRICA A ONDS IN B Availability Payment – Direct payments by government to a private entity to cover the operating, investment and financing costs associated with ROJECT P a given asset, according to key performance indicators. Private-sector revenues are therefore not subject to end-user demand. Concession – Business operated under an exclusive contract. NFRASTRUCTURE I Parastatal – A company owned or controlled wholly or partly by government, including utilities. Power Purchase Agreement – Sets the terms, including price structure and volumes, of power purchases by a utility from an IPP. Project Finance – Long-term financing of a project based on the cash-flows of that project rather than the balance sheet of its sponsors. Public Private Partnership – Provision of a specific public service and/ or capital asset which is wholly or partly operated and financed by the private-sector. Securitization – Aggregation of different contractual credits into a single vehicle which is then bond financed. These bonds are then called “asset backed securities”. Special Purpose Vehicle – A company created solely for a particular financial transaction or series of transactions, legally separate from its principal shareholders. Take-or-Pay – Contract obliging the buyer to purchase a given volume from a supplier at a predetermined price, or else pay the equivalent. The supplier therefore has a fixed contract. 5 Abbreviations & Acronyms FRICA A ONDS IN B ABAKIR Lake Kivu and River Rusizi Basin Authority ACSA Airport Company of South Africa ROJECT P AFC Africa Finance Corporation AFDB African Development Bank AfLife African Life Assurance AFMI African Financial Markets Initiative NFRASTRUCTURE I AFD Agence Franciase de Developpment AFP Administradoras de Fondos de Pensiones AIFF African Infrastructure Financing Facility AIIF African Infrastructure Investment Fund ARM Asset and Resource Management Company Limited B/S Balance Sheet BIT Bilateral Investment Treaties BNDES Banco Nacional de Desenvolvimento Econômico e Social BOAD Banque Ouest Africaine de Developpment BPOPF Botswana Public Officers Pension Fund CCR Comisión Clasificadora de Riesgos CEMAC Economic and Monetary Community of Central Africa CEPGL Economic Community of the Great Lakes Countries CISNA Committee of Insurance, Securities & Non-Banking Financial Authorities (in SADC) CMA Capital Markets Authority (Kenya) CMSA Capital Markets and Securities Authority (Tanzania) Comesa Common Market for Eastern and Southern Africa CPI Consumer Price Index CRPAO Certificado de Reconocimiento de Pago Annual de Obras DBSA Development Bank of South Africa DBZ Development Bank of Zambia D/E Debt to Equity Ratio DEG Deutsche Investitions-und Entwicklungsgesellschaft DFI Development Finance Institution DFID Department for International Development DMO Debt Management Office DSCR Debt Service Cover Ratio 6 FRICA A ONDS IN B EAC East African Community ROJECT EADB East African Development Bank P EAIF Emerging Africa Infrastructure Fund ECA Export Credit Agency ECOWAS Economic Community of West African States NFRASTRUCTURE EDM Electricidade de Moçambique I EEPCO Ethiopian Electric Power Corporation EGL Energie des Grands Lacs EIB European Investment Bank EPC Engineering, Procurement and Construction EPF Employees Provident Fund (Malaysia) EUR European Economic and Monetary Union Single Currency FIAP Federación Internacional de Administradoras de Fondos de Pensionnes FMO Financieringsmaatschappij voor Ontwikkelingslanden FGN Federal Government of Nigeria FSB Financial Services Board (SA) GDP Gross Domestic Product GEPF Government Employees Pension Fund (RSA, Namibia) GNAT Ghana National Association of Teachers GRE Government Related Entity IADB Inter American Development Bank ICRC Infrastructure Concession Regulator Commission ICT Information and Communications Technology IDA International Development Association IFC International Finance Corporation IFI International Financing Institution IMF International Monetary Fund IOPS International Organization of Pension Supervisors IPO Initial Public Offering IPP Independent Power Producer IPPF Infrastructure Project Preparation Facility (Nepad) ISPO Irrevocable State Payment Obligation 7 FRICA A ONDS IN B KAA Kenya Airports Authority KenGen Kenya Electricity Generating Company ROJECT P KETRACO Kenya Electricity Trans-mission Company Limited KFW Kreditanstalt für Wiede-raufbau KPLC Kenya Power and Lighting Company LNG Liquid Natural Gas NFRASTRUCTURE I MDB Multilateral Development Bank MDI Mecanismo de Distribución de Ingresos MFW4A Making Finance Work for Africa MIGA Multilateral Investment Guarantee Agency MTN Medium Term Note NAMFISA Namibia Financial Institutions Supervisory Authority NAPSA National Pension Scheme Authority (Zambia) NBET Nigerian Bulk Electricity Trader NERC Nigeria Electricity Regulatory Commission NERSA National Energy Regulator of South Africa NPRA National Pensions Regulatory Authority (Ghana) NSSF National Social Security Fund OECD Organisation for Economic Cooperation and Development OMSFIN Old Mutual Specialized Finance OPIC Overseas Private Investment Corporation PAIDF Pan-Africa Infrastructure Development Fund PAP Priority Action Plan PAYG Pay As You Go (in relation to pension payments) PBCE European Project Bond Credit Enhancement PCG Partial Credit Guarantee PenCom Pension Commission Nigeria PFI Private Finance Initiative PHCN Power Holding Company of Nigeria PIBO Public Infrastructure Bond Offer PI Public Investment Corporation (RSA) PIDA Program for Infrastructure Development in Africa PIDG Private Infrastructure Development Group PPA Power Purchase Agreement 8 FRICA A ONDS IN B PPIAF Public Private Infrastructure Advisory Facility ROJECT PPP Public Private Partnership P PRG Partial Risk Guarantee QGPC Qatar General Petroleum Company RBA Retirement Benefits Authority (Kenya) NFRASTRUCTURE RBRA Retirement Benefits Regulatory Authority (Uganda) I REFIT Renewable Energy Feed-in-Tariff SADC Southern Africa Development Community SANRAL South African National Roads Agency Limited SBIF Superintendency of Banks and Financial Institutions SEC Securities and Exchange Commission SOE State Owned Enterprise S&P Standard & Poor’s SPV Special Purpose Vehicle SSC Social Security Commission (Namibia) SSNIT Social Security and National Insurance Trust SSRA Social Security Regulatory Authority (Tanzania) TANESCO Tanzania Electric Supply Company TCTA Trans-Caledon Tunnel Authority TIB Tanzania Investment Bank TPDC Tanzania Petroleum Development Corporation USAID United States Agency for International Development VRA Volta River Authority WDI World Development Indicators ZRA Zambezi River Authority Currencies BLR Brazilian Lira BWP Botswana Pula CFA Central Africa Franc GHS Ghana Cedi KES Kenya Shilling NGN Nigeria Naira NMD Namibian Dollar TSH Tanzania Shilling 9 FRICA A ONDS IN B UF Unidad de Fomento (Chile Inflation-Linked Peso) UGX Uganda Shilling ROJECT P USD United States Dollar ZAR South Africa Rand ZMK Zambia Kwatcha Exchanges BSE Botswana Stock Exchange NFRASTRUCTURE I DSE Dar Es Salaam Stock Exchange GSE Ghana Stock Exchange LuSE Lusaka Stock Exchange NSE Nairobi Stock Exchange NSE Nigerian Stock Exchange JSE Johannesburg Stock Exchange NSE Namibia Stock Exchange USE Uganda Securities Exchange 10 INFRASTRUCTURE PROJECT BONDS IN AFRICA 11 Foreword FRICA A ONDS IN B Investment in infrastructure is vital for sustained economic growth in Africa. Energy, transport, water and information technology services ROJECT P remain well below international standard on the continent, and this creates serious bottlenecks for African economies trying to achieve the transformational rates of growth that have been witnessed in other emerging markets. The need is particularly stark in the light of rising NFRASTRUCTURE I populations, and rapid urbanization. The African Development Bank is developing a financing strategy for infrastructure that aims to increase the resources available for investment in these key sectors. Such a large and complex initiative will require Africa to mobilize different sources of capital