Project: Air Cote D'ivoire Modernization & Expansion Program Country
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AFRICAN DEVELOPMENT BANK GROUP zed Public Disclosire Authori PROJECT: AIR COTE D’IVOIRE MODERNIZATION & EXPANSION PROGRAM COUNTRY: COTE D’IVOIRE PROJECT APPRAISAL REPORT Public Dsclosure Authorized PICU DEPARTMENT October 2017 TABLE OF CONTENTS 1. STRATEGIC THRUST AND RATIONALE OF THE PROJECT............................................. 1 1.1 Project Linkages with Country Strategy and Objectives ..........................................................................1 1.2 Rationale for the Bank’s Involvement ......................................................................................................1 1.3 Donor Coordination ..................................................................................................................................3 2. PROJECT DESCRIPTION ............................................................................................................ 4 2.1 Project Objectives and Components .........................................................................................................4 2.2 Technical Solution Retained and Alternative Solutions Considered ........................................................5 2.3 Project Type..............................................................................................................................................6 2.4 Project Cost Estimate and Financing Mechanisms ...................................................................................7 2.5 Project Area and Beneficiaries .................................................................................................................9 2.6 Participatory Approach to Project Identification, Design and Implementation ...................................... 10 2.7 Bank Group Experience and Lessons Reflected in Project Design ........................................................ 10 2.8 Key Performance Indicators ................................................................................................................... 11 3. PROJECT FEASIBILITY ............................................................................................................ 11 3.1 Financial & Economic Performance ....................................................................................................... 11 3.2 Environmental and Social Impact ........................................................................................................... 13 3.3 Implementation Arrangements ............................................................................................................... 15 3.4 Monitoring and Evaluation ..................................................................................................................... 18 3.5 Governance ............................................................................................................................................. 18 3.6 Sustainability .......................................................................................................................................... 19 3.7 Risk Management ................................................................................................................................... 19 3.8 Knowledge Development ....................................................................................................................... 20 4. LEGAL FRAMEWORK ............................................................................................................... 20 4.1 Legal Instrument ..................................................................................................................................... 20 4.2 Conditions Associated with the Bank’s Intervention .............................................................................. 20 4.3 Conformity with Bank Policies .............................................................................................................. 21 5. RECOMMENDATION ................................................................................................................. 21 APPENDIX 1: SUMMARY OF ISSUES TO CLARIFY DURING THE INFORMAL BOARD SESSION ON ACI ANNEX I: COUNTRY MAP ANNEX II: COMPARATIVE SOCIO-ECONOMIC INDICATORS OF CÔTE D’IVOIRE ANNEX III: NATIONAL ACTIVE PROJECTS AS OF MAY 2017 ANNEX IV: ORGANISATIONAL STRUCTURE OF AIR CÔTE D’IVOIRE ANNEX V: AIR CÔTE D’IVOIRE: FINANCIALS ANNEX VI : ORGANISATIONAL STRUCTURE OF AIR CÔTE D’IVOIRE LIST OF TABLES No Title Page 1 Estimated Project costs per component 7 2 Source of Financing 7 3 Project activities financed by ADB Sovereign Loan and ADF PBA 8 4 Air Côte D’Ivoire Operational Data 12 5 Schedule for New Capital increase 12 6 Sensitivity Analysis 13 7 Economic Analysis 13 8 Project Monitoring and Supervision Schedule 18 9 Project Risk Matrix 19 Currency Equivalents August 2017 UA 1 = 1.40775 USD UA 1 = 1.20043 EUR UA 1 = 787.43046 CFA Euro 1 = 1.1727 USD Fiscal Year 1st January – 31st December Weights and Measures 1 metric ton = 2204 pounds 1 metre (m) = 3.28 feet 1 millimetre (mm) = 0.03937 inch 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres Acronyms and Abbreviations ACI : Air Côte D’Ivoire AfDB : African Development Bank ADF : African Development Fund AFRAA : Africa Airline Association ANAC : Autorité Nationale de l’Aviation Civile BFE : Buyer Furnished Equipment CFA : Communauté Financière Africaine CPPR : Country Portfolio Performance Review CSP : Country Strategy Paper DSCR : Debt Service Cover Ratio EBIT : Earnings before Interest and Tax GoC : Republic of Côte D’Ivoire GDP : Gross Domestic Product ICAO : International Civil Aviation Organization IDEV : Independent Development Evaluation IFMIS : Integrated Financial Management and Information System IAAG : Institut Aeronautique Amaury de la Grange INP-HB : Institut National Polytechnique Félix Houphouët-Boigny NDP : National Development Plan NPV : Net Present Value PCR : Project Completion Report PDP : Pre Delivery Payments PFM : Public Financial Management PPP : Public Private Partnership PRG : Partial Risk Guarantee RPK : Revenue Passenger Kilometers SMH : Short Medium Haul SOE : State Owned Enterprise SPV : Special Purpose Vehicle TA : Technical Assistance WAEMU : West African Economic and Monetary Union WCA : West and Central Africa PROJECT INFORMATION SHEET Client Information Borrower: REPUBLIC OF CÔTE D’IVOIRE Project Area: REGIONS OF ABIDJAN, CÔTE D’IVOIRE AND WEST AFRICA Executing Agencies: AIR CÔTE D’IVOIRE Financing Plan SOURCE EUR (million) UA (million) CFA (million) % of % of FE LC Total Cost FE LC Total FE LC Total Cost Component Project A. Aircraft Acquisition (5 No) 222.222 - 222.222 185.118 - Cost185.118 145,767.684 - 145,767.684 100% 87% ADB Sovereign (Loan) 51.164 - 51.164 42.621 - 42.621 33,561.234 - 33,561.234 23% 20% ADB Non-Sovereign (Loan) 42.637 - 42.637 35.518 - 35.518 27,967.695 - 27,967.695 19% 17% INVESTEC (Loan) 25.582 - 25.582 21.311 - 21.311 16,780.617 - 16,780.617 12% 10% Commercial Banks (Loan) 69.506 - 69.506 57.901 - 57.901 45,592.984 - 45,592.984 31% 27% Air Cote d'Ivoire (Equity) 33.333 - 33.333 27.768 - 27.768 21,865.153 - 21,865.153 15% 13% B. Technical Assistance 0.665 12.928 13.594 0.554 10.770 11.324 436.296 8,480.502 8,916.798 5% 5% ADF PBA (Loan) 0.665 3.496 4.161 0.554 2.912 3.467 436.296 2,293.351 2,729.647 31% 2% Air Cote d'Ivoire (Equity) - 9.432 9.432 - 7.857 7.857 - 6,187.151 6,187.151 69% 3% C. Credit Enhancement 17.055 - 17.055 14.207 - 14.207 11,187.078 - 11,187.078 100% 7% ADF PBA (Guarantee) 17.055 - 17.055 14.207 - 14.207 11,187.078 - 11,187.078 100% 7% D. Audit - 0.102 0.102 - 0.085 0.085 - 67.122 67.122 100% 1% ADF PBA (Loan) - 0.102 0.102 - 0.085 0.085 - 67.122 67.122 100% 1% TOTAL PROJECT COST 239.942 13.031 252.973 199.879 10.855 210.734 157,391.058 8,547.624 165,938.682 100% 100% Key African Development Bank (AfDB) Financial Information ADB Loan Financing Terms Loan currency: Euro (EUR) Type of Loan: Fully flexible loan Maturity: 20 years, including the grace period Grace period: 5 years Average Loan Maturity TBD (function of the maturity, grace period and amortization profile) Repayments: Six monthly instalments Interest rate: Base rate + Funding margin + Lending spread + Maturity premium Base rate: Floating base rate (EURIBOR EUR - 6 months, reset each 1st February and 1st August). A free option for determination of the base rate is available Funding margin: The Bank’s funding margin is revised every 1st January and 1st July and applied every 1st February and 1st August with the base rate Lending spread: 80 basis points (0.80%) Maturity premium: 0.20% Option to convert the Base Rate In addition to the free option to fix the floating Base Rate, the borrower may reconvert the fix rate to floating or refix it on part or full disbursed amount. Transaction fees are payable1 Option to cap or collar the Base The borrower may cap or set both cap and floor on the Base Rate to be applied Rate on part or full disbursed amount Transaction fees are payable Option to convert loan currency The borrower may convert the loan currency for both undisbursed or disbursed amounts in full or part to another approved lending currency of the Bank Transaction fees are payable Front-end fees 0.25% of the loan amount, Commitment fee 0.25% per year of non-disbursed amount starts to accrue 60 days after the date of signature of the loan agreement and is payable on the set payment dates. FRR Not Applicable ENPV (baseline scenario): US$32.227 million ERR (base-case scenario): 17.6% 1 Conversion options and transaction fees are subject