Lex Mundi in Africa: Key Market Developments Volume 1, Issue 1 Your World Ready Partner in Africa

Lex Mundi in Africa: Key Market Developments Volume 1, Issue 1 Your World Ready Partner in Africa. Lex Mundi is World Ready for Your Opportunities and Challenges in Africa.

Whether entering African markets or seeking to expand across jurisdictions, a thorough understanding of emerging legal frameworks is critical. With on-the-ground presence in 19 African countries and 500+ experienced legal advisors doing business across the continent, Lex Mundi member firms offer an unrivaled network of expertise with deep local insight and a flexible approach to legal solutions. Together Lex Mundi member firms provide extensive coverage and are committed to delivering streamlined multijurisdictional solutions anywhere your business needs to go in Africa.

To locate a Lex Mundi member firm in Africa: www.lexmundi.com/africa Lex Mundi in Africa: Key Market Developments

About This Publication This guide details key business and legal developments of interest to investors across major jurisdictions in Africa. Lex Mundi member firms with deep local roots and extensive on-the- ground capability have provided this information to help in-house counsel as well as other corporate and financial decision makers stay apprised of important trends within industries, law and regulation, and transactional activity.

The guide will be updated as additional submissions become available from Lex Mundi member firms. For the most up-to-date version, please visit the Africa Group page from the Lex Mundi website (www.lexmundi.com/Africa).

Whether you are entering African markets or seeking to expand across jurisdictions, a thorough understanding of emerging legal frameworks—both national and supranational—is a critical starting point. Complying with rising standards for corporate conduct and governance while navigating the multifaceted risk environment presents many unique challenges to doing business in Africa. In this context, the ability to respond to the accelerating pace of competition requires not only deep insight about local conditions but a flexible and innovative approach to negotiations. Indigenous Insight

With more than 500 lawyers on the ground in 19 African jurisdictions, Lex Mundi’s member firms have experience working together to provide investors coordinated legal advice and service covering all relevant areas of commercial and financial law, including mergers and acquisitions, dispute resolution, antitrust and competition, compliance and tax. Seamless Cross-Border Services

Broad expansion into key sectors in Africa requires seamless cross-border legal service coupled with an understanding of the legal systems at work across the continent. Guided by Lex Mundi’s seamless service protocols, member firms can assemble experienced client teams to deliver streamlined multijurisdictional solutions. These teams allow you to work with a single member law firm while benefiting from the broad, deep local expertise, know-how and connections of multiple Lex Mundi member firms. Lex Mundi’s member firms in Africa are working on transactions across the African continent. Together they provide extensive coverage and are committed to working together to provide on-the-ground expertise anywhere your business needs to go in Africa.

4 Lex Mundi Member Firm Contacts for Africa

Algeria Ivory Coast Nigeria Samy Laghouati – [email protected] Abbé Yao – [email protected] Daniel Agbor – [email protected] Gide Loyrette Nouel Arsène K. Dable – [email protected] Myma Belo-Osagie Member firm for France with office in Seydou Zerbo – [email protected] [email protected] Algeria SCPA DOGUE-Abbé YAO & Associés Udoma Udo Udoma Tel 213.21.23.94.94 Member firm for Ivory Coast [email protected] Angola Tel 225.20.21.70.55 Udo Udoma & Belo-Osagie Catarina Levy Osório Kenya Member firm for Nigeria [email protected] Philip Coulson Tel 234.1.4622307.10/8970622 Angola Legal Circle Advogados, [email protected] Seychelles a member of the MLGTS Legal Richard Harney Malcolm Moller Circle, established by Morais Leitão, [email protected] [email protected] Galvão Teles, Soares da Silva & Coulson Harney Appleby Associados Member firm for Kenya Member firm for Bermuda with office in Member firm for Portugal with office in Tel 254.20.289.9000 Seychelles Angola Madagascar Tel 248.429.5281 Tel 351.213.817.400 John W. Ffooks – [email protected] South Africa Botswana John W Ffooks & Co., a member of Jonathan Lang - [email protected] Jeffrey Bookbinder the Bowman Gilfillan Africa Group, Jonathan H. Schlosberg [email protected] established by Bowman Gilfillan [email protected] Bookbinder Business Law, a member Member firm for South Africa with office Peter Whelan of the Bowman Gilfillan Africa Group, in Madagascar [email protected] established by Bowman Gilfillan Tel 261.33.126.3523 Bowman Gilfillan Member firm for South Africa with office Mauritius Member firm for South Africa in Botswana Malcolm Moller Tel 27.11.669.9000 Tel 267.391.2397 [email protected] Tanzania Democratic Republic of Congo (DRC) Appleby Jonathan Lang – [email protected] Aimery de Schoutheete Member firm for Bermuda with office in East African Law Chambers, [email protected] Mauritius a member of the Bowman Gilfillan Thibaut Hollanders Tel 230.203.4301 Africa Group, established by [email protected] Morocco Bowman Gilfillan Liedekerke Wolters Waelbroeck Julien David – [email protected] Member firm for South Africa with office Kirkpatrick Gide Loyrette Nouel in Tanzania Member firm for Belgium with office in Member firm for France with office in Tel 255.22.277.1885 the DRC Morocco Tunisia Tel 243.8484.39326 Tel 212.5.22.27.46.28 Samy Laghouati – [email protected] Egypt Mozambique Amina Larbi-Ezzine – [email protected] Khaled El Shalakany Fabrícia de Almeida Henriques Gide Loyrette Nouel [email protected] [email protected] Member firm for France with office in Emad El Shalakany Mozambique Legal Circle Advogados, Tunisia [email protected] a member of the MLGTS Tel 216.71.891.993 Aly El Shalakany Legal Circle, established by Morais Uganda [email protected] Leitão, Galvão Teles, Soares da Silva & David Mpanga – [email protected] Shalakany Law Office Associados AF Mpanga Member firm for Egypt Member firm for Portugal with office in Member firm for Uganda Tel 202.272.88.888 Mozambique Tel 256.41.425.4540 Ghana Tel 258.21.344000 Ace Anan Ankomah Namibia [email protected] Peter Frank Koep Bentsi-Enchill, Letsa & Ankomah [email protected] Member firm for Ghana Josias Andries Agenbach Tel 233.30.222.1171 [email protected] Koep & Partners Member firm for Namibia Tel 264.61.382800

5 Contents

Angola 7

Botswana 10

Egypt 13

Ghana 16

Kenya 19

Madagascar 23

Morocco 27

Mozambique 32

Nigeria 35

South Africa 43

Uganda 49

6 Angola Prepared by Angola Legal Circle Advogados, a member of the MLGTS Legal Circle, established by Morais Leitão, Galvão Teles, Soares da Silva & Associados, Member Firm for Portugal with office in Angola

Its main Trends and Projects exports Energy and Power are crude oil, Angola will quintuple its energy capacity production by the year 2017, with the expansion of the Cambambe Dam, the construction of the Laúca Dam and the diamonds, refined combined cycle power plant dam of Soyo with 750 megawatts (MW). petroleum products, Oil Production is expected to rise from 1.8 million barrels per day (bpd) in 2013 to coffee, sisal, 2 million bpd in 2017 with new fields, notably: British Petroleum’s Plutao, Saturno, fish and fish products, Venus and Marte (PSVM) complex, Cobalt International Energy’s deep water exploratory wells and Chevron’s development of the Mafumeira Sul project just off timber, and cotton. the Angolan coast. As reported by Moody’s, Total’s large USD 16 billion investment in the Kaombo oil project in ultra deep waters off the coast of Angola reaffirms their position as a stable operating environment for international oil companies and stands to boost the country’s oil production. The 5.2 million metric ton per year liquefied natural gas (LNG) plant in Soyo is operated by Angola LNG Limited. The plant can process 1.1 billion cubic feet of natural gas per day, with expected average total daily sales of USD 670 million cubic feet of natural gas and up to 63,000 barrels of natural gas liquids. The plant produced its first LNG shipment in the second quarter of 2013, making Angola the 19th country to become a LNG exporter. Commissioning and testing of the plant Foreign investment continued throughout 2014. The plant is expected to operate at approximately 50 primarily percent capacity until ongoing corrections and inspections are completed in 2015. Recent Geological Discoveries directed Sonangol announced in May 2014 an oil discovery at the River Kwanza that will toward the oil sector. allow the production of 3,700 bpd, and 16.3 million cubic meters of gas. Banking and Insurance In the early 2000s the financial sector comprised only nine banks. It now includes more than 20 with private owned banks claiming a dominant share of the market. Bank branches proliferated, extending even to remote and rural areas throughout the country. The insurance sector is thriving and is expected to continue recording sustained double digit growth. In 2013, Groupe Saham, a Morocco-based investment company, purchased GA Angola Seguros SA, Angola’s largest and closely held insurance company by revenue. Main export In early 2014 Standard Chartered announced that in conjunction with ENSA, a leading Angolan insurance company, they would be opening an onshore banking partners include subsidiary in Angola. China, the United States, India, and South Africa.

7 Angola

Infrastructure The transportation network continues to strengthen as the construction of ports in Cabinda, Zaire and Bengo are currently underway. A new cargo terminal is operating in Viana and a new international airport is being built near the area. The Benguela Railway connecting Angola’s coast of the Atlantic Ocean to Zambia is almost complete. 100 new locomotives are expected to be added. The housing infrastructure is also under development, with several new housing projects by the government underway in the country. Private Investment By the third quarter of 2014, 59 investment projects totaling USD 2,150,840,867 were approved by the Angolan Private Investment Agency as disclosed in its quarterly report. Stock Exchange Trading of securities in the Angolan Stock and Debt Exchange (BODIVA) began in December 2014 as announced by the chairman of the Capital Markets Commission (CMC). It was reported by the media that only public debt would be traded at this point. Legislative News Tax Legal Framework Most notably, Business Income Tax (“Imposto Industrial”) has been reduced from 35 to 30 percent. Major changes were also made to the Investment Income Tax and the General Tax Code. The government plans to reduce dependence on oil taxes from 81 to less than 70 percent of total revenues in 2012 and 2014 respectively, and increase non-oil tax revenues from 6.6 to 9.6 percent of GDP in 2012 and 2014 respectively as economic diversification progresses. Financial Legal Framework The Angolan Central Bank approved a set of orders aiming to facilitate advance payments made to settle imports into the country. Oil and Gas Legal Framework Legislation was approved further regulating the activities of refining, storage, transportation, distribution and marketing of oil and gas products. Corporate Fees due for the incorporation of commercial companies were significantly reduced. Litigation A disputes resolution center was created in June 2014. The following pieces of legislation are expected to be revised and/or enacted and/or published in the Angolan Official Gazette in 2015: • Private Investment Law • General Labor Law • Nationality Law • Securities Code

Prepared by Angola Legal Circle Advogados, a member of the MLGTS Legal Circle, established by Morais Leitão, Galvão Teles, Soares da Silva & Associados, 8 Member Firm for Portugal with office in Angola Angola

Angola Legal Circle’s Recent Activity

Angola Legal Circle is formed by attorneys experienced in business law practice, including foreign private investment, having assisted international clients in some of the most important and innovative projects in Angola of the past few years. The ALC team is actively involved in several foreign investment projects but also provides advice to local companies on a regular basis. ALC is particularly strong in M&A projects in respect of petroleum assets and other natural resources and has a solid and reputable practice associated with advice on banking, insurance, real estate and labor related matters. We advised: • The very first Angolan public venture capital fund and its implementation, which has been the source of extended interest both in Angola and elsewhere. This particular venture is a key project to the development and diversification of the Angolan economy. • A major oil company within the context of a worldwide restructuring of clients’ operations in Angola including the transfer of participating interests in several oil blocks, and assisted on tax, labour and contractual issues. • Another major oil company within the context of a transfer of participating interests in two oil blocks. • The promoters of the first retail luxury shopping center in Luanda which entailed advice on investment structures and real estate issues. • Several clients in ongoing agricultural projects and associated investment structures. • Several clients with foreign investment and foreign exchange issues in several industries, most notably, environmental, hydroelectric and retail. • In 2014, we provided advice in relation to the incorporation of a financial institution and the structuring of the private investment required to that end.

Lex Mundi Member Contact

Catarina Levy Osório - [email protected] Angola Legal Circle Advogados, a member of the MLGTS Legal Circle, established by Morais Leitão, Galvão Teles, Soares da Silva & Associados Member firm for Portugal with office in Angola Tel: 351.213.817.400

Key Market Developments: Angola 9 Botswana Prepared by Bookbinder Business Law, a member of Bowman Gilfillan Africa Group, established by Bowman Gilfillan, Member Firm for South Africa with office in Botswana

Trends and Projects Mining Prospects in the mining sector are notably positive, with economic growth expected to remain at around five percent annually. Major growth contributors included the relocation by De Beers of its Diamond Trading Company’s aggregation, quality assurance and sight preparation operations from London to Gaborone. In addition, the country’s first full scale diamond sale was conducted by the Okavango Diamond Company, with participation from 76 companies from the world’s major diamond centers, where over 220,000 carats were sold. This year, exceptional stone tenders accounted for USD 136 million, reflecting a strong diamond market and robust demand for large precious gems from the Karowe mine, located in north-central Botswana. The mine is undergoing a USD 55 million plant upgrade which will improve large diamond recovery and enable sustainable processing of hard ore. Completion of the upgrade is expected in the second quarter of 2015. In expansion of the country’s mining prospects, Botswana’s first uranium mine will Boasts one of the be opened in 2016 in the Serule area. The mine is projected to be very profitable, with the first production anticipated in the second quarter of 2016 at an annual output of 3 million pounds of uranium (1,154 tons). It is estimated that production best from the mine will last beyond 20 years. credit Infrastructure rankings Construction of the Kazungula Bridge over the Zambezi River commenced this year. The USD 259.3 million project is being overseen by the Botswana and Zambian in Africa according governments and is projected to be a key trade route linking the port of Durban in to two major South Africa to the inland countries of Botswana, Zambia, Zimbabwe, Malawi, The Democratic Republic of Congo, Mozambique, as well as Dar-es-Salaam in Tanzania. investment firms. Construction of the bridge is intended to boost regional integration by serving the economies of these countries. Completion of this project is projected for 2018. In 2014, Botswana and Namibia signed a bilateral agreement for the construction of the Trans-Kalahari Railway, which will run from landlocked Botswana’s coalfields in the South and East to the Namibian port of Walvis Bay. The USD 11 billion railway is intended to meet the growing global demand for coal. With estimated coal deposits of 212 billion tons, of which 7.1 billion tons are measured reserves, coal presents a major growth opportunity for Botswana. The country has the capacity and potential to produce up to 90 million tons of seaborn thermal coal annually for export markets, in particular India and China. Financial Environment In 2014, Botswana’s A2 sovereign credit rating was reaffirmed by the International Sovereign Credit Rating Agency, Moody’s Investors Service (Moody’s). As noted by the Bank of Botswana, “In making the assessment, Moody’s emphasized the country’s sound policy framework, effectiveness of government and track record of prudent fiscal policies, which result in continued strengthening of the government’s net financial position.” This assessment clearly provides a positive economic outlook for domestic and foreign investment in the country. Botswana

Legislative News

The following pieces of legislation are expected in the following year: The Securities Act In pursuit of improving its capital markets, the Securities Act aims to consolidate and amend the laws regulating the securities industry in Botswana. This piece of legislation will provide a regulatory framework in which securities institutions and their activities can be properly supervised, and offenses for market abuse are penalized. The Retirement Funds Act The enactment of the Retirement Funds Act repeals the Pensions and Provident Funds Act, and provides for other forms of retirement funds, where investments can be approved and guarded by the Regulatory Authority, ensuring that the interests of the members are catered to. The Insurance Industry Act Pension The object of the Insurance Industry Act is to provide for all the provisions of the insurance industry under one act and, more specifically, comprehensive rules for dealing with the insurance business of insurers, brokers, agents and representatives. The Counter-Terrorism Act The Counter-Terrorism Act was passed by Parliament in August 2014 and aims to provide measures to prevent and combat terrorism as well as the financing of terrorism. Bookbinder Business Law’s Recent Activity

The firm has experience advising major international corporations and organizations in high value matters. Of particular note, in 2014 we advised an international organization on the disposal of its shares in a listed entity valued at USD 32.5 million. The transaction formed part of a series of transactions by the purchaser, which culminated in the delisting of the listed entity. We also acted as legal adviser to an international specialist banking and asset management group in a dual listing of a ZAR 15 billion domestic medium-term note program. In similarly high valued transactions, we acted as legal counsel in the acquisition of a local investment enterprise by a leading international bank and financial services company. This noteworthy transaction was valued at ZAR 2.3 billion. We acted as counsel to an Israeli diamond company in a highly contentious shareholders dispute, which involved complex litigation in various jurisdictions including Botswana, Belgium and Israel. The dispute relates to control of a local sight holder company in the business of cutting, polishing and selling of diamonds worth millions of U.S. dollars in the local and international market. Notable property transactions involving local clients include providing legal and conveyancing advice to a leading property developer in the largest sectional title property development in Botswana.

Prepared by Bookbinder Business Law, a member of Bowman Gilfillan Africa Group, established by Bowman Gilfillan, Member Firm for South Africa with office in Botswana 11 Botswana

Lex Mundi Member Contact

Jeffrey Bookbinder - [email protected] Bookbinder Business Law, a member of the Bowman Gilfillan Africa Group, established by Bowman Gilfillan Member firm for South Africa with office in Botswana Tel: 267.391.2397

Key Market Developments: Botswana 12 Egypt Prepared by Shalakany Law Office Lex Mundi Member Firm for Egypt

Trends and Projects Main exports are Energy and Power oil, mineral , The Ministry of Energy and Electricity called for an international bid for the chemical , and construction of a new power station in Dairut to be operated on a Build Own agricultural Operate (BOO) basis at a total investment of USD 2.5 billion. The Dairut factory would be the first of its kind to operate on a BOO scheme. The Ministry further products, livestock, announced the construction of a coal-powered, 6,000 MW electricity station with and textiles, investments worth USD 9.6 billion. Furthermore, a Household Natural Gas Connection Project has been initiated that including cotton. is partially funded by the International Bank for Reconstruction and Development (IBRD) with an estimated cost of USD 1,473.9 million, expected to be completed by 2019. Renewable energy projects saw a boost in 2014, with Egypt already relying on 10 percent of renewable energy sources, setting a target of 20 percent by 2020. With the government setting feed-in tariffs and offering reduced interest rates for renewable energy, around 177 international consortiums of companies have applied Major for solar power and wind energy projects in Egypt, with investments totalling USD 12.5 billion. In addition, the government announced its plan to invite bids for the export construction of a 1,000 MW wind-energy park in the Gulf of Suez, which will be partners are Italy, the biggest renewable energy project Egypt has encountered. Spain, France, As the largest non-OPEC oil producer in Africa and the second largest dry natural gas producer on the continent, Egypt plays a vital role in international energy Saudi Arabia, markets through the operation of the Suez Canal and the Suez-Mediterranean (SUMED) Pipeline. As of 2014, Egypt held 4.4 billion barrels of proven oil reserves India and Turkey. and has since maintained a sustained level of exploration activity, with 86 Others include the discoveries, most of which were oil, according to EGPC. The government has signed 29 new oil and gas concession agreements worth USD 2 billion. The North United States, Alexandria Block, a USD 11 billion project, is expected to increase Egypt’s future gas Brazil and production by 18 percent. Argentina. Banking and Insurance With over 57 banks and 4,000 branches, Egypt’s banking sector is one of the oldest and steadiest in the region, providing a foothold for the government and investors alike. Despite a challenging economic backdrop, Egypt’s banks have succeeded in growing their assets and maintaining profitability beyond 2014, with total bank assets reaching the equivalent of USD 242.2 billion. The insurance sector has experienced a growth rate of 15.1 percent, increasing Steady its assets from USD 6.1 billion to USD 7.2 billion in 2013 and 2014 respectively. Population Premiums have endured a growth rate of 12.1 percent. growth is an Private Investment intrinsic driver The first half of the 2013-2014 financial year saw USD 2.8 billion in investments, for economic reflecting a good indication in challenging the economic backdrop. The growth . International Investment Summit to be held in 2015 is expected to generate USD 8 billion for the 2015-2016 financial year.

13 Egypt

Stock Exchange Despite political pressures, which EGX has managed to surmount, they have realized 32 percent gains, subsequently pushing the Egyptian market to become one of the best performers in comparison with other world markets as per the Morgan Stanley Indices. With its index surging by 100 percent over the last three years, the EGX has one of the highest growth rates ever recorded by emerging and developed markets. The market has also witnessed increasing liquidity levels, whereby the trading volume has jumped to 57 billion securities. Legislative News Tax Legal Framework The amended Income Tax Law addresses both natural and corporate persons. The amendments applicable to corporate persons include: • Repeal of the Add-On Tax System which has been replaced by new reporting requirements • Imposition of the Income Tax on dividend distributions received by corporate persons • A reduced rate of five percent shall apply without deduction for any expenses if the individual or corporate person holds more than 25 percent of the distributing company’s capital or voting rights and shares, for a period of not less than two years • Imposition of Capital Gains Tax on the sale of securities by corporate persons • Definition of transactions regarded as “aggressive tax planning” • Introduction of harsher penalties for non-compliance with reporting requirements • Repeal of the Stamp Duty on securities that are now subject to Capital Gains Tax The Property Tax Law has also been amended, expanding the tax base, with 50 percent of the revenue generated to be directed at developing slums and poor areas throughout Egypt. Financial Legal Framework A new law addressing microfinance has been issued granting incentives and tax advantages to institutions carrying out microfinancing activities. This law aims to boost small and medium-sized enterprises. Mining A new Mineral Resources Law has been issued, paving the way for new investments in the mining sector, through licensing and exploration activities. Renewable Energy Legislation targeting the renewable energy sector has been issued, establishing the New and Renewable Energy Authority, to develop and support investors in this field by granting them numerous incentives. The law stimulates energy production from renewable energy sources. More incentives will be identified upon the issuance of the new Investment law. An Investment Summit will be held in 2015, with major amendments to the Investment Law expected to be implemented. These are mainly aimed at facilitating private investment and expanding those activities that enjoy the law’s incentives and guarantees.

Prepared by Shalakany Law Office,Lex Mundi Member Firm for Egypt 14 Egypt

Shalakany Law Office’s Recent Activity

While Egypt was in the eye of a political storm, economic uncertainty loomed over the country during the first and second quarters of 2014. A new president was elected and a new government was formed. The challenges that face the country are of epic proportions; however, the government acted swiftly to rescue the ailing economy. Despite the unfavorable investment atmosphere and the unstable political situation, we had quite an exceptional year. We were successful in concluding and closing many major mergers and acquisition transactions over the course of 2014. One of the major transactions was the transfer by Global Telecom Holding (GTH), VimpelCom Ltd’s listed Egyptian subsidiary, to the Algerian National Investment Fund (Fonds National d’Investissement) (FNI), of 51 percent of Omnium Telecom Algérie (OTA, formerly known as Orascom Telecom Algérie), a leading mobile operator in Algeria. The deal is the largest ever M&A activity done on an Algerian company. We also acted on behalf of Pamplona Capital Management LLP in its acquisition of RWE Nile branch GmbH, a major global actor in upstream oil and gas, for a staggering value of EUR 6 billion. In the field of Equity Capital Markets, we acted as legal counsel for Emaar Group, a major UAE Real Estate Development company, in relation to Emaar Misr’s Initial Public Offering. Our banking practice did extremely well this year. We recently represented both Citibank International PLC and Unatrac Holding Limited in connection with the amendment and restatement of a USD 700,000,000 million revolving credit facility for Unatrac Holding Limited. In addition, the Firm represented Agence Française de Développement in connection with the facility agreement between Afreximbank and AFD, which amounts to a maximum amount of EUR 100,000,000 million, as well as the Royal Bank of Scotland in its capacity as lender in relation to a share pledge and guarantee with a value of over £13 million. We are currently advising the European Bank for reconstruction and development in connection to a loan amounting to EUR 50 million, to a major cement company.

Lex Mundi Member Contact

Khaled El Shalakany - [email protected] Emad El Shalakany - [email protected] Aly El Shalakany - [email protected] Shalakany Law Office Member firm for Egypt Tel: 202.272.88.888

Key Market Developments: Egypt 15 Ghana Prepared by Bentsi-Enchill, Letsa & Ankomah Lex Mundi Member Firm for Ghana

Trends and Projects Economy supports a population of Oil and Gas Gas production from Ghana’s Jubilee Field commences in 2015. Crude oil and gas 22.5 production in the Twenboa-Enyenra-Ntomme (TEN) Field and the Sankofa-Gye million Nyame (SGN) Field are also expected to commence in 2016 and 2017 respectively. and relies on Power cocoa and oil Ghana has recently been experiencing some level of power crisis and in response, production. the government and the Millennium Challenge Corporation have signed the Millennium Challenge Account Ghana Compact II, which is geared towards increasing private sector investment in power generation, strengthening the distribution sector and improving access to electricity. Commercial operation of the Kpone Thermal Power Plant, which is anticipated to generate 220 MW of power, will also commence in 2015. Ghana intends to install an additional power generation of 770 MW from thermal sources, 33.5 MW from renewable energy sources and 12 MW from solar power. The country’s Taxes main The Special Petroleum Tax of 17.5 percent, the National Fiscal Stabilization Levy of five percent and Special Import Levy of 1-2 percent have been extended through export 2017. Withholding Tax on directors’ remuneration has also been increased from 10 to 20 percent. Value Added Tax is to be removed on specified, locally produced partners pharmaceuticals and some of the raw materials used for the production of these pharmaceuticals in 2015. are France, Italy, Netherlands, China Aviation Services Work has begun at the Kotoka International Airport (KIA) on the expansion of and Germany. the arrival hall, construction of the southern apron and completion of three new boarding gates, bringing the total number of gates to five. Work on a new bay to accommodate wide boarding aircrafts commences in 2015. Work to upgrade the Tamale Airport as an alternative international airport to KIA has also commenced. The runway and installation of the Air Ground Lighting System are ongoing. Healthcare Infrastructure The government has vigorously embarked on the development of infrastructure to expand access to healthcare in all parts of the country. The following hospital construction works are currently ongoing: • University of Ghana Teaching Hospital (600 beds) • Ridge Hospital expansion (420 beds) • Military Hospital Project in Kumasi (500 beds) • Tamale Teaching Hospital • Police Hospital • Ashanti Regional Hospital • Upper-West Regional Hospital Ghana

Miscellaneous The Registrar-General’s Department (RGD) registered 36,020 businesses in 2014. In 2015, the RGD is projecting to register approximately 75,000 new businesses. The Copyright Office also plans to register 1,700 copyright works by the end of 2015. Cabinet has approved the creation of a Ghana Export-Import Bank to lead in the strategic positioning of Ghana as an export-led economy. The Ghana Infrastructure Investment Fund has been established to mobilize, manage, coordinate and provide financial resources for investment in future infrastructure projects. Bentsi-Enchil, Letsa & Ankomah’s Recent Activity

Bentsi-Enchil, Letsa & Ankomah (BEL&A) is the leading corporate and commercial law firm in Ghana with in-depth expertise and experience in providing first-rate legal services for international and local clients in all sectors of the economy. BEL&A was founded in 1990 by Kojo Bentsi-Echill. It is currently divided into seven partner-led practice groups including: Energy and Natural Resources; Construction, Infrastructure and Transportation; Litigation and Dispute Resolution; Financial Services and Capital Markets; Business and Industry; Technology, Media and Telecommunications; and Employment, Pensions and Immigration. We have in-depth experience in international arbitration and specialize in complex commercial arbitrations and post award enforcement. • We advised a major Asian bank on Ghanaian law issues relating to financing the setting up and the working capital requirements of an integrated farming project in Ghana. • We reviewed a USD 200 million Engineering Procurement Construction (EPC) Contract between the Government of Ghana and a foreign construction company for the construction of affordable housing. Our role included reviewing the loan agreement and EPC Contract, consideration of off-taker requirements and providing assistance on procurement issues. • We are currently advising on a major Ghanaian Port project. Our role includes overseeing the entire project for the development, financing, design, procurement, engineering, manufacturing, construction, completion, commissioning, ownership, operation and maintenance and additional facilities required to support a free port for the hydrocarbons industry in Ghana and the wider Gulf of Guinea Region. • We acted on a number of shipping matters including ship finance, mortgages, charter party agreements, carriage of goods, claims for short landing of cargo and ship arrest and release, etc. We have also represented clients in customs procedures and liability under the Fisheries Law. • We have worked on most of the high profile energy and natural gas deals in Ghana in recent years. • We acted for and advised a range of companies from major multinationals to indigenous SMEs in the oil and gas sector regarding petroleum agreements, upstream and downstream restructuring, share/asset acquisitions and farm-in agreements, petroleum finance and related security agreements (e.g. government consent and support agreements, multilateral guarantees and insurance) and general compliance issues. We have worked on a range of leading power projects in Ghana, both in traditional and renewable electricity generation. Some highlights include: • Providing a major international power company with general legal representation in respect of the proposed construction of a 1,000 MW combined fuel power plant in Ghana • Advising on a proposed development of 650 MW wind farms in Ghana and providing an analysis of the risks affecting a power project in Ghana

Prepared by Bentsi-Enchill, Letsa & Ankomah, Lex Mundi Member Firm for Ghana 17 Ghana

• Advising on the development of various photovoltaic projects in Ghana, from 20-155 MW, including providing input into the obtaining of licenses, joint venture agreements, power purchase agreements and due diligence • We acted for many international and local mining as well as mining services companies across the entire spectrum of legal issues affecting the sector. • We acted as external counsel for a telecommunications company in Ghana in a USD 192.5 million and GHS 60 million refinancing agreement involving five different banks. • We acted as Ghanaian counsel for a number of multinational companies in international arbitration. • Advising on a proposed development of 650 MW wind farms in Ghana and providing an analysis of the risks affecting a power project in Ghana, advising on the development of various photovoltaic projects in Ghana, from 20-155 MW, including providing input into the obtaining of licenses, joint venture agreements, power purchase agreements and due diligence • We acted for many international and local mining as well as mining services companies across the entire spectrum of legal issues affecting the sector. • We acted as external counsel for a telecommunications company in Ghana in a USD 192.5 million and GHS 60 million refinancing agreement involving five different banks. • We acted as Ghanaian counsel for a number of multinational companies in international arbitration.

Lex Mundi Member Contact

Ace Anan Ankomah - [email protected] Bentsi-Enchill, Letsa & Ankomah Member firm for Ghana Tel: 233.30.222.1171

Key Market Developments: Ghana 18 Kenya Prepared by Coulson Harney Lex Mundi Member Firm for Kenya

Economy Trends and Projects relies on industries including small-scale Energy and Power consumer goods, Kenya is on track to generate more than half of its electricity through solar power by 2016. The Kenyan Government has invested USD 1.2 billion in conjunction with agriculture products, the private sector to build solar power plants across the country. Solar products horticulture, oil have been made even more accessible to customers in “off-grid” areas with the refining, aluminum, removal of the 16 percent VAT, which had previously been implemented on all solar products. steel, lead, cement, The first disbursement of funds for the Lake Turkana Wind Power Project was commercial ship received in December 2014. This project is the largest single wind power project repair and tourism. ever to be constructed in Africa. The KES 300 million project will provide cost- effective renewable energy as well as comprising approximately 20 percent of Kenya’s currently installed generating capacity. In addition, a consortium led by Centum Investment and Gulf Energy won the bid to build the Lamu Power Plant, which will initially produce power using coal sourced from South Africa and eventually use local coal, mined from Kitui County’s Mui Basin.

Main exports are Capital Markets The Central Bank of Kenya Act has been amended to allow retail investors to tea, horticultural participate in the Government debt market in smaller denominations and bids are now being accepted. products, coffee, To also encourage confidence and enhance the positioning of Kenya as a premier petroleum products, investment destination, the Capital Markets Authority signed a memorandum fish and cement. of understanding with the Chartered Institute for Securities & Investment for the introduction of international certification standards in the industry. Financial Assets The Unclaimed Financial Assets Act of 2011 received a boost in its operationalization after the formation of the Unclaimed Financial Assets Authority, comprising a group of six individuals who have been tasked with the reporting and management of unclaimed financial assets. The Act is aimed at establishing resources and a dedicated mechanism to help locate property owners and/or beneficiaries to facilitate claims. A financial asset is considered unclaimed when no claims have been Exports made, no transactions have been performed, or no instructions have been given to countries with respect to the asset for a certain period of time. including Uganda, Tanzania, Sovereign Bond Netherlands, The Kenyan Government has successfully launched its first international bond United Kingdom, offering, paving the way for future capital-raising in international financial markets. the United States, Egypt and the Democratic Republic of Congo.

19 Kenya

Legislative News Competition/Anti-Trust The Finance Act of 2014 introduced a number of amendments effective as of October 1, 2014, including: • New definitions for terms such as “undertakings”, “unwarranted concentration of economic power”, “agreement and concerted practice” and “abuse of dominant position” • A mandatory requirement for professional associations to apply for exemptions from the regulator in respect of any behavior which otherwise would be deemed as anti-competitive The act also empowers the Competition Authority to issue block exemptions for any category of decisions, practices or agreements. In addition, the Competition Authority has been given the power to operate a leniency program which is deemed an effective tool in cartel enforcement. Effective July 2014, merger filing fees are: • KES 2 million payable by merging companies with the combined turnover of above KES 50 billion • KES 1 million payable by merging companies with the combined turnover of between KES 1 billion and KES 50 billion • KES 500,000 payable by the merging companies in the health care sector with a combined turnover of between KES 500 million and KES 1 billion. No filing fee is payable by merging companies with the combined turnover of less than KES 1 million, however, a merger filing or exclusion application will still be required. The Competition Authority of Kenya also introduced a revised notification form which comprises, amongst other things, basic information about the merging parties, the products and services supplied by each of the merging parties and an evaluation of the horizontal overlaps and vertical relationships of the merging parties. Insurance A new draft insurance bill, containing provisions on business disclosure, damages for late payment and remedies for fraud, was introduced to Parliament. The bill follows the consumer disclosure reforms which are contained in the Consumer Insurance (Disclosure and Representations) Act of 2012 and is anticipated to be adopted as the new Insurance Act. Tax The Finance Act of 2014, passed by Parliament on August 27, 2014, effective January 1, 2015, signaled the return of Capital Gains Tax (CGT) in Kenya after being suspended for almost 30 years. In its application, CGT will be charged at a rate of five percent of the net gain which accrues to a company or an individual on the transfer of property (including land, buildings and marketable securities) situated in Kenya, whether or not the property was acquired before January 1, 2015. The Finance Act of 2014 also reintroduced withholding Value Added Tax (VAT) into the VAT framework in Kenya. In essence, the newly introduced amendments provide for government ministries, departments and agencies to withhold six percent of the tax payable on purchasing taxable supplies and thereafter remit the same to the Commissioner of Tax. Security The Security Laws Amendment Act of 2014 was enacted December 22, 2014. This statute, which has been the subject of controversy due to its sensitive nature, seeks to amend a number of laws relating to security and terrorism.

Prepared by Coulson Harney, Lex Mundi Member Firm for Kenya 20 Kenya

Coulson Harney’s Recent Activity

Bowman Gilfillan Africa Group is one of Africa’s premier corporate law firms. The Group is well represented in what are considered to be the hub jurisdictions in the key regions of the African continent. Through these offices, we are able to coordinate advice on transactions and offer a seamless service to our clients, making the execution of cross border transactions less cumbersome, time consuming and costly, hence creating efficiency. Our 400 lawyers are some of the best practitioners in their respective jurisdictions, with significant “on-the-ground” understanding of the business environment in the jurisdictions in which they operate. At the recent Cell C Deal Makers Annual Awards held in Johannesburg, Bowman Gilfillan Africa Group won the Africa Legal Advisers category by both deal value and number of transactions in Africa (excluding South Africa). Our total deal value in this category of USD 4,627 million constitutes 14.84 percent of the market share while the 41 reported transactions is equal to 36.61 percent of market share. Group member, Coulson Harney, one of the largest law firms in Kenya, has a proven track record of delivering first-class technical advice to clients in a coherent and relevant way, resulting in their rapid move up the rankings of international legal directories such as Chambers Global, Legal 500, PLC and International Financial Law Review, with a number of its partners being ranked as tier 1. Coulson Harney currently has six partners, including the vastly experienced and well-recognized founding partners, Richard Harney and Philip Coulson. The firm is also home to a wealth of talented senior lawyers and associates with local and international qualifications. This year, Coulson Harney was involved in a number of noteworthy M&A and ECM transactions, which demonstrate our depth of expertise and ability to provide flexible, solutions-orientated and strategic advice. A summary of recent M&A firm highlights is set out below. Construction and Materials Counsel to Aureos East Africa Fund in relation to its USD 14.5 million disposal of its shares in Cable Holdings, in exchange for shares in Transcentury, an infrastructure company listed on the Nairobi Stock Exchange. Financial Services Counsel to: • British American Investment Co. Kenya (BRITAM) in relation to its acquisition of further shares in the issued share capital of Housing Finance, which increased BRITAM’s current shareholding in the company to approximately 49 percent. The deal was valued at USD 26.3 million. BRITAM is one of the largest mortgage companies in East Africa and the only mortgage lender listed on the Nairobi Securities Exchange. • The private equity investors and other shareholders on the sale of a controlling stake in one of East Africa’s biggest composite insurance groups, UAP Holdings, to Old Mutual. Food and Beverage Counsel to: • SABMiller in respect of the proposed combination of The Coca-Cola Company, SABMiller and Gutsche Family Investments’ (majority shareholders in Coca-Cola SABCO) bottling operations in Southern and East Africa to create Coca-Cola Beverages Africa, which will be the largest bottler of soft drinks in Africa; and the 10th largest in the world, with annual revenue of USD 2.9 billion • Brookside Dairy in Kenya, on the group restructuring and sale of 40 percent of its shares to Compagnie Gervais

Key Market Developments: Kenya 21 Kenya

Insurance and Intermediaries Counsel to: • Pan Africa Insurance Holdings in relation to its acquisition of a majority stake in Gateway Insurance • Swiss Re in relation to its USD 36 million acquisition of Apollo Investments, the holding company of Life & General Insurance Company in Kenya and the rest of East Africa • Metropolitan International, the international division of South African stock exchange-listed financial services group, MMI Holdings, in relation to its USD 31 million acquisition of Kenyan insurer, Cannon Assurance Oil and Gas We advised on USD 195 million multi-currency secured structured trade commodity financing which was advanced by Standard and Chartered Kenya to Gulf Energy in respect of heavy fuel oil and other petroleum products under fuel supply contracts, the open tender system and bilateral trade agreements. Retail and Consumer Goods Counsel to FTG Holdings in respect of its listing on the Growth Enterprise Market segment of the Nairobi Securities Exchange. FTG Holdings is the holding company of the Flame Tree Group, a manufacturing group with operations in Mauritius, Dubai, Kenya, Rwanda, Ethiopia and Mozambique. This is the first foreign firm listing in the GEMS market on the NSE. Mining A new mineral resources law has been issued, paving the way for new investments in the mining sector, through licensing and exploration activities. Telecommunications Counsel to: • Safaricom in respect of its USD 83 million acquisition of substantially all of the assets of Essar Telecom Kenya (Yu Mobile) • Eaton Towers in respect of its acquisition of the tower infrastructure segment of Bharti Airtel in six African countries

Lex Mundi Member Contact

Philip Coulson - [email protected] Richard Harney - [email protected] Coulson Harney Member firm for Kenya Tel: 254.20.289.9000

Prepared by Coulson Harney, Lex Mundi Member Firm for Kenya 22 Madagascar Prepared by John W. Ffooks & Co., a member of the Bowman Gilfillan Africa Group, established by Bowman Gilfillan, Member Firm for South Africa with office in Madagascar

Trends and Projects The world’s Energy and Power Fourth Madagascar is in a dire energy crisis. Only about 15 percent of the Malagasy people have access to electricity. Jirama (Jiro sy Rano Malagasy), which is the main provider Biggest Island of electricity in the country, struggles to satisfy the needs of the people living in after Greenland, Madagascar. The company relies heavily on fossil fuels for electricity generation, New Guinea and however, there is real potential for alternative sources of energy in Madagascar. In fact, there are currently 660 hydroelectric sites providing approximately 7,800 MW Borneo. of energy, and a number of small-scale hydropower projects planned in the country. Moreover, there are areas in Madagascar, where temperatures are high enough to consider geothermal energy. Biofuel is also on the rise in Madagascar. The creation of eight companies for the production of ethanol is in the pipeline. It is estimated that 75,000 hectares (ha) will be needed for the cultivation of the sugar cane required for the production of ethanol. The Malagasy government intends on producing 75 percent of their electricity from renewables by 2020. However, the Malagasy government still intends to continue its oil exploration with three onshore and up to 50 offshore exploration blocks being The world’s issued after the adoption of the new Petroleum Code throughout 2015. leading For households across Madagascar, the main energy source for cooking and heating is charcoal. There has been a recent increase with the price of charcoal in producer Madagascar due to deforestation. of Vanilla accounting Infrastructure for half of global Madagascar’s 2015 budget includes an allocation for infrastructure including production. improvement of the road network as well as water and sanitation facilities, and can be expected this year. Only five of the 17 airports in Madagascar are considered international. The length of the railroad network in Madagascar is approximately 895 km. Madagascar‘s electric infrastructure is particularly weak. Technology “Mobile Scanning” is emerging in Madagascar. This technology enables the localization of products and the progression of their delivery. This is possible France because of the 1D and 2D barcodes, otherwise known as tags. This technology is the main trading was introduced by a local company, DR Tech, in collaboration with the American partner, although company, Honeywell. Their principal targets are companies, professionals and individual operators. the United States, Because of the submarine fiber-optic cable EASSy (East Africa Submarine System), Japan and Madagascar is now linked to East Africa, the Indian Ocean and the rest of the Germany also world. The capacity of the cable can reach 8.3 Gigabytes per second (Gbps). have strong Establishment of another fiber-optic cable in the Northwestern part of Madagascar is planned and should cement its reputation as a well-connected country. economic ties to the country.

23 Madagascar

Finance The Malagasy finance sector has 40 credit institutions and 11 commercial banks with the banking sector dominating 80 percent of the Malagasy Financial System. Most of the banks are foreign-owned. It is estimated that a mere six percent of the Malagasy population has a bank account. There are 31 microfinance institutions in Madagascar which supply financial services to low-income households and this sector is expanding progressively. Mobile banking is regulated although improvements of the legislation governing mobile banking are expected in the near future. There are five major insurance companies in Madagascar, however life insurance is still in its infancy. Madagascar does not have a stock exchange. Legislative News New Petroleum Code A new petroleum code is being discussed and examined by the Malagasy Parliament, it is expected by mid-2015. The main changes that the new code is expected to contain are as follows: • Separation of roles in the Office des Mines Nationales et des Industries Stratégiques (OMNIS), which is the current regulatory body: The petroleum Code in its draft form intends to clarify the place of the OMNIS by distinguishing two regulatory bodies; The National Agency and the National Company. • Entry into the petroleum sector: Entry into the sector is made by way of tender which is open, transparent, non-discriminatory and competitive. • Environmental sector: The protection of the environment will be increased in order to ensure the cohabitation of petroleum activities and the conservation of biodiversity. For example, in the event of the creation of a protected area within the contractual perimeter of a contractor, the latter enjoys acquired rights and may carry on his petroleum activities subject to compliance with the law and the good practices of the petroleum industry. • Access to land: Authorization to occupy the public domain is granted by way of a decree taken by the council of ministers in order to raise the protection of the contractor. Occupation of private land is granted after the conclusion of an agreement with the owner of the land and the payment of an indemnity. • The State’s interest: The draft petroleum law allows the state to have a participation interest in the petroleum activities. Such interest cannot exceed a maximum rate set by the Ministry during the bidding process. Electronic Transactions and Electronic Signature Law based on UNCITRAL texts Law No 2014-024 on Electronic Transactions and Law No 2014-025 on Electronic Signatures were modeled on UNCITRAL texts, i.e. the Model Law on Electronic Commerce of the United Nations Commission on International Trade Law (UNCITRAL), the Model Law on Electronic Signatures and some provisions of the United Nations Convention on the use of electronic communications in international contracts. The adoption of the first law will increase legal predictability for electronic commerce in Madagascar. Furthermore, it will allow the use of paperless communication. As a result, international trade will be facilitated. The second law deals with electronic signatures and gives certainty to their status. These two laws and some of the provisions of the United Nations Convention on the Use of Electronic Communications in International Contracts give to Madagascar a modern uniform legislation in the field of electronic transactions. Law No. 2015-003 regarding the updated Malagasy Environment Charter (Loi No. 2015-003 portant Charte de l’Environnement Malagasy actualisée).

Prepared by John W. Ffooks & Co., a member of the Bowman Gilfillan Africa Group, established by Bowman Gilfillan, Member Firm for South Africa with office in Madagascar 24 Madagascar

New Petroleum Code (cont’d) The Malagasy National Assembly adopted Law No. 2015-003, updating the Malagasy Environment Charter, on January 20, 2015. The main amendments include: • The adoption of the Polluter Pays Principle • The Precaution Principle • The Prevention Principle • The participation of the public • The right of every individual to access information, which have the potential to affect the environment • The right to sue in case of a violation of said right to access information, and • The sanctions for infringements of the rules contained in the updated Malagasy Environment Charter Abolition of Capital Punishment The Malagasy Parliament adopted a law regarding the abolition of capital punishment. The only step left to take is the promulgation of this law by the President of the Malagasy Republic, Hery Rajaonarimampianina. In practice, capital punishment has not been applied since 1958. Law No. 2014-038 on the Protection of Personal Data Law No. 2014-038 on the Protection of Personal Data was adopted on January 9, 2015 and was largely inspired by the European Data Protection Directive (95/46/EC) and experiences of francophone countries, which are members of the Association of Francophone Personal Data Protection Authorities (AFAPDP). The law contains numerous provisions: foreign data transfer, data protection principles, rights of data subjects and sanctions. Furthermore, an independent data protection authority is expected to be established. It will be in charge of ensuring compliance with Law No. 2014-038 and enforcing the sanctions. After publication in the Official Journal of Madagascar, this law will take effect. There are five major insurance companies in Madagascar, however life insurance is still in its infancy. Madagascar does not have a stock exchange. John W. Ffooks’ Recent Activity

Key Market Developments: Madagascar 25 Madagascar

Banking and Finance We acted for: • A French corporate and investment bank and drafted the netting opinion in relation to the transactions by our client in Madagascar • A French multinational banking and financial services company by providing legal counsel to the client in relation to any potential issues before entering into any type of derivatives transactions in Madagascar Telecommunications We advised: • An American multinational corporation specializing in Internet-related services and products on the regulatory aspects of its project in Madagascar • A leading telecommunication tower company in Africa in relation to its projected acquisition of a telecommunication company in Madagascar Mining, Oil and Gas We acted for a major mining company on the acquisition of mining permits in Madagascar. We performed initial due diligence on mining assets and the corporate structure. Employment We advised an international global logistics and freight forwarding company on the closing of its branch in Madagascar and on the economic redundancy process of its employees.

Lex Mundi Member Contact

John W Ffooks - [email protected] John W Ffooks & Co., a member of the Bowman Gilfillan Africa Group, established by Bowman Gilfillan Member firm for South Africa with office in Madagascar Tel: 261.33.126.3523

Prepared by John W. Ffooks & Co., a member of the Bowman Gilfillan Africa Group, established by Bowman Gilfillan, Member Firm for South Africa with office in Madagascar 26 Morocco Prepared by Gide Loyrette Nouel Lex Mundi Member Firm for France with office in Morocco

Legislative News Real Estate Investment Funds Economy supports “Organismes de Placement Collectif Immobilier” a population of The Draft Decree Number 70-14 relating to Real Estate Investment Funds “Organismes de Placement Collectif Immobilier” (OPCI), adopted by the government 32.6 on October 23, 2014. Decree 70-14 introduces OPCI as new investment tools meant to steer savings investment towards real estate as well as to provide institutional million. investors with a new high-quality and long-term investment vehicle. The legal framework introduced by Decree 70-14 is mainly inspired by French law. An OPCI may either be (i) a real estate investment company “société de placement immobilier” incorporated as a joint stock company, admitted to trading on the stock exchange and run by a managing company, in French, a “société de gestion”, or (ii) a real estate investment fund organized as a joint ownership devoid of legal personality “fonds de placement immobilier”. There are two categories of OPCI according to the Decree 70-14: (i) OPCIs which are Relies on meant to be public “OPCI destiné au grand public”, and (ii) OPCIs with simplified operating rules reserved for institutionals/qualified investors only “OPCI RFA”. The phosphate Decree 70-14 provides for a definition of eligible assets, i.e. assets which could be owned by an OPCI. rock Regarding liquidity: the Decree 70-14 further provides that the securities issued by an OPCI could be admitted to the Casablanca Stock Exchange. Besides, an mining OPCI which vests the form of a “société de placement immobilier” could itself be and processing, admitted to the Casablanca Stock Exchange. food processing, Finally, please note that the OPCI tax regime has not yet been finalized. The success of this new investment vehicle will directly depend on this tax regime. leather goods, textiles, Public Private Partnership construction, energy, and The new Moroccan Law Number 86-12 relating to public private partnerships tourism. promulgated by Dahir n°1-14-192 dated December 24, 2014 (Law 86-12) intends to (i) complement the current legal framework used to develop partnerships between the public and the private sectors (mainly the law on the delegated management of public services or infrastructure by municipalities or public enterprises) whose scope is too restrictive and which does not provide legal basis for the regulation of projects other than concessions, and (ii) reconcile the increasing demand for efficient and reliable public services with the limited budget resources available while sharing out the risks between the public and private entities entering into such agreements. Law 86-12 defines the Public Private Partnership (PPP) agreement as “a fixed-term contract whereby a public authority entrusts a private partner with the responsibility to carry out an overall mission of conception, financing, construction or rehabilitation, maintenance and/or operation of works or infrastructure or provision of services necessary for the provision of a public service”.

27 Morocco

Under Law 86-12, PPP agreements shall contain some provisions regarding the term of the partnership, the modalities to amend the PPP agreement, performance targets, modalities for subcontracting, etc. It further provides that the PPP contract shall allocate the risks between the contracting parties in light of their respective risk-management capacity. Law 86-12 provides that on the agreed term of the PPP agreement, all goods necessary to operate the concerned public service will be transferred to the public authority. Conditions to enter into a public private partnership (PPP): Law 86-12 provides that a prior assessment must be completed before any award procedure. This assessment aims at determining whether entering into a PPP is more advantageous than any other possible schemes for the contemplated project. Then, if the prior assessment reveals that the PPP is the most suitable scheme for the project, one of the hereinafter procedures must be followed: • The competitive dialogue procedure, which consists in inviting competitive bids while simultaneously initiating discussions with the competitors in order to identify solutions • The open call for tenders, which consists in publicly inviting competitive bids without restriction • The shortlisted call for tender, when only candidates which have been allowed to tender following a preselection process may tender • The negotiated procedure, which is a procedure whereby the public authority negotiates directly with one or several candidates without a competitive dialogue In all cases, the project must be awarded to the candidate who submits the most economically advantageous offer Islamic Banks The law number 103-12 relating to credit institutions and assimilated entities published on January 22, 2015 (Law 103-12) introduces a legal framework for Islamic banking in Morocco and intends to cater to high-potential Islamic banks, investments and financing. Law 103-12 introduces the concept of “participative banks”. Pursuant to Article 60 of Law 103-12, any legal entity regarded as a participative bank, should, before carrying out its activities, as any other credit institutions, obtain a license granted by Bank Al Maghrib (Moroccan Central Bank) after the prior consultation of the Credit Institutions Committee “comité des établissements de credits”. According to Law 103-12, participative banks are authorized to carry out, on a habitual basis, the following operations: • Receiving funds from the public, • Providing their clients with financing solutions via a new range of financial products (namely mourabaha, ijara, moucharaka, moudaraba, salam and istina’a); and • Carrying out commercial, financial and investment operations with the approval of the high Ulamas Council “Conseil supérieur des Oulémas”. It being specified that the activities and operations listed above shall not give rise to the payment of interests Law 103-12 further provides that participative banks shall provide the high Ulamas Council with a yearly assessment report on the compliance of their operations and activities with the prior approvals/opinions issued by the high Ulamas Council.

Prepared by Gide Loyrette Nouel, Lex Mundi Member Firm for France with office in Morocco 28 Morocco

Renewable Energies Law number 13-09 relating to renewable energies published on March 18, 2010 (Law 13-09) aims at promoting the production, sale and exportation of energy from renewable sources. From that perspective, Law 13-09 introduces a legal framework applicable to the construction and operation of plants producing electricity from renewable sources, with the following major changes: • Enabling private entities to produce and export electricity; previously, ONEE “office national de l’électricité” (the state-owned entity responsible for the provision of electricity and the operation of the distribution system) had the monopoly for the production of electricity; this market is now open to competition, however, the supply of electricity must still be carried out through the national electricity network and interconnections. The regime set forth in Law 13-09 is as follows: 1. An authorization regime for installations that produce renewable energy of more than 2 MW; 2. A preliminary statement regime (declaration to be filed with the Ministry of Energy) for installations that produce (i) renewable energy of more than 20 kW and less than 2 MW, or (ii) 8 MW or more of thermal energy; 3. When the installed capacity of the production plant per site is below 20 kW of renewable energy, no conditions apply; 4. Access to average voltage, high voltage and very high voltage grids by all developers of electricity produced from renewable sources; and 5. Possibility to export electricity produced from renewable sources by using the national network. In order to implement the government’s policy on renewable energies, Law Number 16-09 established the Energy Efficiency and the Development of Renewable Energy (ADEREE). The New Legal Framework Applicable to the Operation of Private Clinics The opening and operation of private clinics in Morocco was previously governed by Decree Number 1-96-123 dated August 21, 1996 promulgating Law Number 10-94 on the practice of medicine (PM Law), and by its implementing Decree Number 2-97-421 dated October 28, 1997. The new Law Number 131-13 (Law Number 131- 13) dated March 3, 2015 (only available in Arabic for the time being) reformed this legal framework to adapt the PM Law to the progress of medical practice and to make the Moroccan health system more attractive to national and foreign invest- mentors. The main developments and changes brought by Law number 131-13, specifically relating to the opening and operation of private clinics in Morocco, are the following: 1.1 Owning and operating a clinic Until now, only Moroccan physicians (or partnerships fully owned by licensed physicians) had the right to own and operate private clinics. The new legal framework liberalizes the ownership of private clinics. It is now possible for a clinic to be owned by: (i) An individual who must necessarily be a physician registered with the National Medical Association (Ordre des Médecins); (ii) a partnership, “association” (non-profit organization) or company owned by Moroccan licensed physicians; (iii) a commercial company incorporated under Moroccan law (with no restriction regarding its shareholders); (iv) a non-profit organization (i.e., “foundation” or “association”). 1.2 Opening and management of the clinic 1.2.1 Opening of the clinic

Key Market Developments: Morocco 29 Morocco

The provisions relating to opening and operating a clinic are not significantly altered in Law Number 131-13 (opening and operating are still subject to the authorization of the Ministry of Health after the prior consultation of the National Medical Association). Any changes in the initial situation (change in the legal form of the clinic, in the shareholding of the clinic, extension of the clinic, change in the activity of the clinic, etc.) are now subject to prior authorization. This mainly concerns changing the Medical Director, but also any project of alteration or extension of the premises, etc. 1.2.2 Management of the clinic Medical Director Law Number 131-13 makes a clear distinction between (i) the medical management of the establishment, to be carried out by a licensed physician, and (ii) the management of “non-medical activities” (administrative and financial affairs) which may be performed by a non physician. The independence of the medical management of the clinic is guaranteed namely by the prohibition for owners and/or managers of a clinic to interfere with the functions of the Medical Director, or give orders that would limit or affect the exercise of its functions. Special committees Law Number 131-13 introduces the requirement for the Medical Director of the clinic to set up (i) a medical committee composed of the doctors of the clinic, and (ii) an ethics committee. The medical committee shall be consulted on issues relating to the health care organization within the clinic, the recruitment of medical staff, the acquisition or renewal of medical equipment. The ethics committee is consulted on ethical issues that may arise in the provision of medical care, and monitors the compliance with deontological and ethical rules. Competition / Antitrust / Merger Control Law Number 104-12 relating to freedom of prices and competition adopted on June 30, 2014 and Law Number 20-13 relating to the Competition Council published on July 24, 2014, together with their implementing decrees, introduced significant changes in the Moroccan legal framework applicable to anti-competitive practices and merger control. The Competition Council has also been granted broader powers under this new legal framework. Anti-competitive practices The main changes are as follows: • Prohibition of agreements aiming at allocating contracts between a number of economic operators; • Introduction of a de minimis exemption concerning the agreements of minor importance which do not significantly restrict competition; and • Prohibition of sale prices that are deemed predatory compared to production, transformation and selling costs whenever such prices result in preventing a company or a product from accessing a market, or in eliminating all together a company or a product from a market. Merger Control Any contemplated merger - the latter now being defined according to EU standards - must be notified to the Competition Council (whereas the relevant authority under the previous legal framework was the Prime Minister) prior to its completion if one of the three following thresholds is met: • The combined worldwide turnover of all the parties amounts to or exceeds MAD 750 million, • The turnover generated in Morocco by at least two of the parties amounts to or exceeds MAD 250 million (provided that each of the two parties reaches this threshold), • The parties and/or their affiliates owned an aggregate market share of more than 40 percent of any given market of goods or services in Morocco (or a substantial part of such market) during the preceding year.

Prepared by Gide Loyrette Nouel, Lex Mundi Member Firm for France with office in Morocco 30 Morocco

Please note that the above thresholds should be read in combination with Article 1 of the Moroccan Competition Law which specifies that the law only applies to operations likely to have an effect on the Moroccan market. The Competition Council must decide within 60 days to either allow the merger, prohibit it or allow its completion subject to certain commitments to be made by the parties. The Competition Council may also conduct a further review for an additional 90 days in case of a persistent risk of competition distortion. Competition Council The Competition Council has been granted increased consultative powers as well as investigation and decision-making powers both for anti-competitive practices and merger controls. Regarding anti-competitive practices, the Competition Council may now: • Investigate suspected cartels or abuses of dominant positions, particularly resorting to dawn raids, seizure of documents and requests for information • Impose administrative financial penalties • Grant full immunity or partial fine reduction to the parties who help establishing the existence of an infringement and identifying the responsible parties Regarding merger control, the Competition Council has the power to impose a financial penalty on the parties in case of failure to notify, failure to wait for the decision of the Competition Council, failure to comply with commitments previously made, or in case of incomplete or inaccurate information provided in the notice sent to the Competition Council.

Lex Mundi Member Contact

Julien David - [email protected] Gide Loyrette Nouel Member firm for France with office in Morocco Tel: 212.5.22.27.46.28

Key Market Developments: Morocco 31 Mozambique Prepared by Mozambique Legal Circle Advogados, a member of the MLGTS Legal Circle, established by Morais Leitão, Galvão Teles, Soares da Silva & Associados, Member Firm for Portugal with office in Mozambique

Economy Trends and Projects thrives on Energy and Power Coal Mozambique is to produce the equivalent to 800,000 barrels of oil per day by 2025, with production starting in 2019. production and The environmental impact study for the construction of the second phase of Cahora implementation Bassa Hydroelectric Dam, in Tete, is at its final stage and the works will start in of infrastructure 2015. The North Central project is expected to complement the South Central, projects, which drives currently in full operation. credit. ENI and Anadarko have reached an agreement for the joint construction of a floating gas liquefaction platform for Liquefied Natural Gas (LNG) with two trains in the North of Mozambique. Recent Geological Discoveries Galp confirmed in May 2014 the existence of quality gas in the Rovuma Basin, located at Mozambique’s offshore. The discovery was made in Agulha, in the Southern part of Area four, uncovering a 25 meter reserve of good quality arenite. Mozambique has 200 trillion cubic feet of natural gas reserves. Commercial production in the Mozambique Basin started in 2004 through a partnership Main export between the National Hydro-Carbonate Company and the South African company Sasol. partners Financial Banking and Insurance are South Africa, The Mozambican Banking sector is growing exponentially. Six of the largest Belgium, China, Italy, banks in Mozambique have maintained a double digit expansion rate since 2013, as well as strong profits, showing a 19 percent growth in net assets. This rise Spain and India. is accompanied by better loanover deposit ratios 3.9 percent and profits of 13 percent. Infrastructure Transportation projects worth USD 17 billion are in the pipeline, including increased rail lines to ports and expanding port capacities to allow for increased exports. The works of the logistics base of Pemba were inaugurated in August. The facilities will include a pier, facilities for production and assembly of submarine equipment, construction of access roads, as well as equipment storage areas and mechanical workshops to support the oil and gas industry in the region. Construction is estimated to finalize in 2016. The construction of the Maputo Circular Road, a project budgeted at USD 315 million was officially launched in March 2013. Since then, the ring road which connects the cities of Maputo, Matola and the District of Marracuene, designed to relieve chronic traffic issues, has been slated for completion in September 2015. The Mozambican government budgeted USD 70.5 million for the rehabilitation project of the Maputo International Airport infrastructure. The two year project is in the last stage of the competitive tendering process and is expected to start this year. Mozambique

The Nacala International Airport, initiated in September 2011, is in its near final stages, and the airport shall be running by December 2014 with a capacity for 500,000 passengers per year. The executive project of the bridge linking Maputo and Catembe is now complete and works have already started with the performance of soil studies. The infrastructure, with just over three miles long, will cost about USD 700 million, including more than 200 kilometers of road to the border of Pontad’Ouro and Bela Vista-Boane. The work is expected for completion between 2017 and 2018, with high hopes for the operation of enterprizes and tourist areas around the southern province of Maputo. In addition, the Greater Maputo Water Supply Expansion Project for Mozambique is to increase access to clean water for residents in the Greater Maputo area. Vale and the public company Mozambique Ports and Railways (CFM) joined in on the Nacala Corridor Project. The project involves the construction of 912 kilometers (km) of rail line from Moatize, through Malawi and returning again to Mozambique through Niassa to Nacala-a-Velha, where a deepwater port is also being built to transport the coal from the Moatize coal basin. This investment is budgeted in at USD 4.3 billion. The project is designed to provide a logistics solution to the Moatize coal basin and as an alternative to the Sena line and the port of Beira. The rehabilitation and development of the Nacala’s Port was launched in early March. Budgeted at approximately USD 32 million and partially funded by Japan, the rehabilitation of the Nacala Port includes the rehabilitation and construction of new infrastructure scheduled for completion in 2017. The Nacala Port is of particular importance to Mozambique as a potential international corridor and an important gateway to the countries of the South Africa region. Private Investment The Fund for Business Environment (FBE) has made available approximately USD 2 billion to support private sector business associations, trade unions and confederations of different lines of business projects across the country to ensure their sustainability for the next five years. Legislative News Tax Legal Framework The legal regime setting forth measures for prevention and prosecution of money laundering, financing of terrorism and related crimes was approved this year. Oil and Gas Legal Framework Regulations establishing the Tariff Regime, applicable notably to renewable energies, were also recently approved. The Regulation of the Petroleum Law and Mining Law following pieces of legislation are expected to be revised and/or enacted and/or published in the Mozambican Official Gazette in 2015.

Prepared by Mozambique Legal Circle Advogados, a member of the MLGTS Legal Circle, established by Morais Leitão, Galvão Teles, Soares da Silva & Associados, 33 Member Firm for Portugal with office in Mozambique Mozambique

Mozambique Legal Circle’s Recent Activity

Mozambique Legal Circle‘s strengths lie in its strong professionals fully equipped to advise clients across the board but, particularly, in banking and finance, insurance, corporate and M&A and natural gas associated projects. A summary of recent M&A and firm highlights are as follows: We acted as: • Advisor to an insurance company in a suit brought by a public company following an airplane crash • Local counsel to several financial institutions, including in connection with an issue of bonds by a Mozambique- based entity and the structuring and securitization of a loan to a large cement company • Advisor on securitization related issues, a freight company in connection with security created over various locomotives to operate in Mozambique • Advisor in the drafting of a regulatory due diligence report in the context of the refinancing of existing facilities and of capital expenditure in respect of a wash-plant for a mine in Mozambique We are currently assisting: • A leading Engineering, Procurement, Construction and Installation company within the context of a bid for work on the North Mozambique natural gas project

Lex Mundi Member Contact Fabrícia de Almeida Henriques - [email protected] Mozambique Legal Circle Advogados, a member of the MLGTS Legal Circle, established by Morais Leitão, Galvão Teles, Soares da Silva & Associados Member firm for Portugal with office in Mozambique Tel: 258.21.344000

Key Market Developments: Mozambique 34 Nigeria Prepared by Udo Udoma & Belo-Osagie Lex Mundi Member Firm for Nigeria

Economy & population of 166.6 Trends and Projects million Energy and Power The power sector, as part of the process of realizing uninterrupted power supply in is supported by Nigeria, witnessed various exciting developments this year. One notable acquisition the country’s rich was by Oando Plc through one of its upstream subsidiaries focused on oil and gas oil reserves & other exploration and production in Nigeria, Oando Energy Resources Limited, of 100 percent of the Nigerian upstream oil and gas business of ConocoPhillips for more industries including than USD 1.5 billion. This acquisition increased its crude oil production capacity from coal, tin, rubber, just about 4,500 up to 50,000 barrels per day. wood textiles, cement The Nigerian power sector, however, continues to face challenges such as & other construction insufficient gas supply to power electric plants due to frequent vandalization of gas pipelines and historical legacy gas debts of the federal government preceding materials. the privatization. In a bid to address this, the Central Bank of Nigeria (CBN) has established an N 213 billion intervention fund which, hopefully, will help to stabilize the sector, settle outstanding debts owed to market participants and position the electric power sector for the take-off of the Transitional Electricity Market (TEM). The International Finance Corporation (IFC), in partnership with the World Bank, has Main exports are launched a power project through its Lighting Africa Program aimed at providing Nigerians in rural areas with access to electricity. petroleum A number of gas projects are at various phases of completion and several projects have been commissioned and are currently in operation, such as the Odidi and Associated Gas Gathering Project (a Nigerian National Petroleum Corporation/Shell joint venture) that is being executed in SouthWest Nigeria. The objective of this petroleum products, project is to gather and inject gas into the Escravos-Lagos Pipeline. It is proposed which account for 95% that this pipeline should, in due course, form part of the West African Gas Pipeline which will supply gas to various West African countries. of exports. The first gas pipeline-fed electricity project in Nigeria has commenced. The Federal Government has signed a USD 1 billion memorandum of understanding with Strancton Limited for the construction of a 1,000 MW power plant in Katsina State and also with Greenville Oil and Gas Limited for the supply of liquefied natural gas to the Kaduna Power Plant. The Federal Government has restated its commitment to end gas flaring in Nigeria and indicated a deadline of 2015 for so doing. A gas flare tracking system, located at the National Oil Spill Detection and Response Agency (NOSDRA) has been introduced to aid regulators in detecting the quantity of gas flared by oil companies Exports in Nigeria. By ending gas flaring, it is hoped that the energy sector will be able to to the United generate sufficient quantities of gas to meet 40 percent of the energy requirement States, to generate power supply and to recover the USD 800 million lost every year due to India, gas flaring. Netherlands, Immigration Spain, Brazil, In February 2015, the Nigerian Immigration Service abolished the requirement United Kingdom, for expatriates with valid Combined Expatriate Residence Permit and Aliens Card Germany, Japan, (CERPAC) to obtain re-entry visas in order to return to Nigeria whenever they travel and France. out of the country.

35 Nigeria

Infrastructure The transportation network in Nigeria is being strengthened by the proposed reintroduction and expansion of train services in various parts of the country. Until now, the main form of transport was by road. The reawakening of the rail sector in Nigeria has been marked by the inauguration of the Gombe-Kafanchan-Kaduna Inter-City Train Services, the Enugu-Port Harcourt Train Services and the reconstruction of an additional 678 km rail line from Makurdi to Gombe, with a 179 km branch line from Kafanchan to Kaduna. The Lagos State Blue Line Rail Infrastructure is currently under construction. This line, which will run from Okokomaiko to Marina, is projected to carry an initial 400,000 passengers daily with an increased capacity of 700,000 passengers daily when the rail route becomes fully operational. Twenty-two airport terminals are also being refurbished, while five new international airport terminals are under construction in Lagos, Port Harcourt, Kano, Abuja and Enugu. Oil and Gas In 2014, a number of International Oil Companies (IOCs) in Nigeria divested their interests in some onshore oil and gas assets. These interests have been acquired mostly by indigenous Nigerian companies, some of which are in partnership with foreign investors who act as their financial and technical partners. Seplat Petroleum Development Company Plc, which recently carried out a dual listing in Nigeria and London, acquired Oil Mining Leases (OMLs) 4, 38 and 41 from Shell Petroleum Development Company of Nigeria Limited (SPDC). Oando Energy Resources Limited (Oando) acquired the interests of ConocoPhillips in OMLs 60, 61, 62, 63 and participating interests in the Okpai power plant located within OML 60. Oando also acquired ConocoPhillips’ interest in Oil Prospecting License 214. Oando Plc, through one of its upstream subsidiaries, focused on oil and gas exploration in Nigeria-Oando Energy Resources Limited, has acquired 100 percent of the Nigerian Upstream Oil and Gas Business of Conoco Phillips for more than USD 1.5 billion. This acquisition has increased its crude oil production from about 4,500 to 50,000 bpd. The Nigerian Content Development Board (NCDMB) has increased its efforts in implementing the provisions of the Oil and Gas Industry Content Development Act of 2010 (Local Content Act). The goal of the Local Content Act is to ensure continuous growth of Nigerian content and the development of indigenous skills in all oil and gas projects, operations and transactions. These efforts have included setting the ownership requirement for drilling rigs deployed for work in offshore areas of Nigeria, the Nigerian shareholding threshold for oil and gas service companies operating in Nigeria and the requirement for companies to retain a minimum of 10 percent of total revenues accruing from their Nigerian operations into Nigerian banks. In April 2014, President Goodluck Ebele Jonathan approved the appointment of Ikechukwu Oguine as the new coordinator of legal services and secretary to the NNPC. Mr. Oguine, a former general counsel of Chevron Nigeria Limited, replaced Anthony Madichie, who had occupied the position since February 2011. Pension A new Pension Reform Act (the PRA 2014) was passed in 2014. Under the PRA 2014, both the employers’ and employees’ contributions were increased with the employers contributing a minimum of 10 percent of an employee’s monthly emoluments while the employees contribute eight percent, respectively. As with the repealed Pension Reform Act of 2004, the PRA 2014 retained the provisions which allowed an employer elects to bear the full responsibility of contributions to the pension scheme but stipulated that where an employer exercised this option, such employer would be required to contribute a minimum of 20 percent, as opposed to 18 percent, of its employees’ monthly emoluments. Although the National Pension Commission (Pencom) published clarifying that any employer that elects to bear the full responsibility for the contributory pension scheme shall only be required to pay a total of 18 percent of its employees’ monthly emoluments, it is unclear how the courts would interpret such publication in the event of a dispute. Under the repealed act, the obligation to open a retirement savings account (RSA) was vested in the employee, and an employer could only remit contributions to the RSA after the employee had notified the employer of the

Prepared by Udo Udoma & Belo-Osagie, Lex Mundi Member Firm for Nigeria 36 Nigeria

the details of his/her RSA. It was not unusual for employees not to open an RSA, and therefore, a number of employers were unable to remit the contributions, and as a result were in breach of their obligation under the repealed act. In a bid to redress the situation, the Pencom issued the Guidelines for Transitional Contributions Fund, which provided a mechanism for the administration of the contributions of employees that had failed to open RSAs with pension fund administrators (PFAs) of their choice. Section 11(5) of the PRA of 2014, by authorizing employers to open nominal RSAs, subject to such guidelines as may be issued by Pencom, on behalf of employees who fail to do so within six months of the commencement of employment, has definitely resolved this concern. Prior to the enactment of the PRA 2014, the entitlements of a life insurance policy maintained on behalf of an employee (which still remains at a minimum of three times the total annual emoluments of an employee), were required to be paid into such employee’s RSA; and the amounts administered by the PFA in favor of the beneficiary under the deceased employee’s will, or paid to the deceased’s spouse and children, and in the absence of the spouse and child, to the recorded next-of-kin or any person designated by him/her during his/her lifetime, or in the absence of such designation, to any person appointed by the Probate Registry as the administrator of the estate of the deceased. This process was complicated, and appeared to defeat the purpose of the life insurance policy which was meant to ameliorate the consequences of the death of an employee. The PRA 2014 has simplified this process and provides in section 8, that the underwriter shall pay the deceased employee’s entitlements to the employee’s named beneficiary, in accordance with the provisions of Section 57 of the Insurance Act, Chapter 17, Laws of the Federation of Nigeria 2004. Real Property In January 2015, the Governor of Lagos State signed into law an executive order reducing the cost of land transactions within the state. The order, which took immediate effect, reduces consent fees from six to 1.5 percent, while Capital Gains Tax, which was previously two percent, is reduced to 0.5 percent. Also the cost of Stamp Duty (that is payable to the Lagos State Internal Revenue Service) has been reduced from two to 0.5 percent. while registration fees have been reduced from three to 0.5 percent. It is expected that all other states of the federation will follow suit in due course, especially as the Federal Government has indicated its desire to lobby other state governments to ensure a reduction of Perfection Fees to amounts less than three percent of the consideration for purchase of the relevant property. Regulatory and Compliance In 2014, the Nigerian Copyright Commission (NCC) commenced its electronic copyright registration system, Nigerian Electronic Copyright Registration System (NeCRS). The effect of this initiative is that the NCC has observed a significant increase in the number of copyright notifications lodged with it. The NeCRS is aimed at improving the existing copyright notification system by allowing the creators of works eligible for copyright to register their interests through an online platform. A major advantage of this system is that it allows searches to be conducted on the NeCRS database. The Standards Organization of Nigeria (SON) recently joined the Nigerian Single Window Trade Portal, with other agencies in Nigeria, in a bid to promote and facilitate trade. This trade portal is a government website that offers a single portal for both Nigerian and international investors to access information concerning regulatory guidelines in relation to their proposed business/trading activities in Nigeria. The other agencies on the Portal include the Nigerian Customs Service and the National Agency for Food and Drug Administration and Control (NAFDAC). In January 2015, the NAFDAC, the agency responsible for regulating food, drugs, cosmetics, medical devices, chemicals and packaged water (regulated products) in Nigeria, increased its registration fees by 30 percent. It must be noted that the registration of Regulated Products is compulsory for the manufacture, import, export, advertisement, distribution, sale and use of such products in Nigeria. Tax In October 2014, the Nigerian Stock Exchange waived the payment of Value Added Tax on commissions applicable to capital market transactions. These commissions include those earned on traded values of shares and payable to the Securities and Exchange Commission, the Nigerian Stock Exchange and the Central Securities Clearing System.

Key Market Developments: Nigeria 37 Nigeria

The withholding tax rate on all aspects of building, construction and related activities (excluding survey, design and deliveries) provided by the Companies Income Tax Regulation has been reduced from five percent to 2.5 percent, however, survey, design and deliveries have all been explicitly excluded from the reduced rate. The Federal Inland Revenue Service (FIRS) has questioned the eligibility of some companies that were granted pioneer status incentive (i.e. exemption from corporate income tax of 32 percent). Some companies were granted the incentive for a straight five year period but the law does not provide for this, rather it provides three years, then an additional and final one year, subject to satisfactory performance. The FIRS has consequently raised additional assessments on some of the companies for the final two of their five year pioneer status. Udo Udoma & Belo-Osagie’s Recent Activity Banking and Finance We advised: • Rand Merchant Bank Nigeria Limited on an N 12.95 million facility from African Development Bank facility • Syndicated lenders on a USD 3.2 billion facility to MTN Communications Limited • The International Finance Corporation in relation to its N 650 million Grooming Center facility; a USD 280 million IHS facility; a USD 10.6 million Primera Food Nigeria Limited facility and a USD 19.8 million Natural Prime Resources Nigeria Limited facility • FMO/Proparco on their USD 40 million Access Bank plc facility and their USD 60 million First City Monument Bank facility • SABMiller plc on a syndicated USD 40 million financing • Syndicated lenders on a USD 680,625,000 facility to UNICEM • Proparco on its USD 40 million Fidelity Bank plc facility • Hongkong & Shanghai Banking Corporation Limited (HSBC) in connection with a loan of USD 125 million that was provided by HSBC to Airtel Networks Limited • Standard Chartered Bank/First Rand Bank Limited (through Rand Merchant Bank) on their USD 85 million AOSOrwell Limited loan refinancing Corporate, Mergers and Acquisitions We advised: • On acquisition by Lafarge Cement WAPCO (Nigeria) plc (now Lafarge Africa plc) of approximately USD 1.35 billion interests in Lafarge South Africa Holdings (Proprietary) Limited, Atlas Cement Company Limited, AshakaCem plc and UNICEM • Sahara Energy Group/Rak Unity Petroleum plc on the latter’s restructuring • First Bank of Nigeria Limited on its First Registrars Limited divestment • Consol Glass Proprietary Limited on its acquisition of Glassforce Limited • Dangote Flour Mills on its Dangote Agrosacks Limited divestment • Tiger Brands on a post-acquisition tender offer in Dangote Flour Mills • UAC of Nigeria plc on post acquisition tender offer in Portland Paints and Products plc • UAC of Nigeria plc on 49% divestment to Famous Brands Management Company (Proprietary) Limited • A global aviation company on leasing and registration of three aircraft in Nigeria • Merchant Bank on the winding up of its representative office in Nigeria

Prepared by Udo Udoma & Belo-Osagie, Lex Mundi Member Firm for Nigeria 38 Nigeria

Infrastructure and Natural Resources We are currently advising: • A developer of two hydropower projects on the River Ndugutu and the River Sindila • A developer of a proposed hydropower project on the River Nyamagasani • One of the bidders for the construction of the Uganda National Oil Refinery • CNOOC Uganda Limited on the legal and regulatory aspects regarding the development and establishment of a Central Processing Facility, a Liquefied Petroleum Gas processing facility, as stipulated in its field development plan • EleQtra, a leading player in the development, investment, management and operation of private infrastructure in emerging economies, in the construction of a solar park in Eastern Uganda • One of the leading premium international hotel brands on the establishment and construction of a five star hotel in Kampala Capital Markets and Regulatory We advised: • Citibank, on a USD 200 million Diamond Bank plc subordinated note offering • Citibank/Goldman Sachs on a USD 450 million FBN Finance B.V. subordinated note offering • Citibank/Goldman Sachs on a USD 1 billion Zenith Bank plc global medium term note program and offering of USD500 million notes • Deutsche Bank/Standard Chartered on an EBN Finance Company B.V USD 250 million subordinated note offering • Citibank/Standard Chartered Bank/Stanbic IBTC Bank plc on an N 8.7 billion federal government bond issued as Citibank N.A. global depositary notes • Stanbic IBTC Bank plc on an N 150 billion note issuance program • African Development Bank’s N 160 billion medium term note issuance program • UBA Trustees Limited on Kogi State’s N 20 billion fixed rate bond issuance program; and the restructuring of the Kaduna State N 8.5 million bond payment • As joint solicitors on a state government’s N 15 billion bond issue • Trustees of a state government’s N 20 billion bond issue • FSDH Merchant Bank Limited on an N 100 billion bond issuance • On restructuring of Stanbic IBTC Bank plc as a holding company under Central Bank of Nigeria regulations • Standard Bank/BNP Paribas/Renaissance Capital on dual listing of Seplat Petroleum Development Company plc shares on the Nigerian and London Stock Exchanges Litigation We represented: • Lafarge Nigeria (UK) Ltd and AshakaCem plc in proceedings to prevent the transfer of 1,312,444,260 shares in AshakaCem plc to Lafarge Africa plc • Transocean Support Services in claims arising from drilling rig fatalities and injuries

Key Market Developments: Nigeria 39 Nigeria

We are currently representing: • Fernbach Financial Software S.A. in an action in relation to the termination of Banking Software Reseller Contract with a Nigerian agent • Cotecna SA and Cotecna Destination Inspection Limited in an action against NICON Insurance Ltd and for indemnity in relation to the fire incident at Cotecna’s scanning facility at Ashaye Port • Ogilvy and Mather Africa B.V. in an action by Prima Garnet Communications Limited concerning a media communications affiliation agreement • International Finance Corporation in suits by DSNL Offshore Limited, Adamac Industries Limited and others on financing facility • Mobil Producing Nigeria Unlimited in compensation claim and action for N 1 billion for alleged environmental damage • Mobil Producing Nigeria Unlimited in multi-billion Naira compensation claims arising from the Idoho Oil spill in Nigeria • Ikeja Electricity Distribution Company Limited (IKEDC) in actions relating to electricity power contracts, actions by former employees, electricity consumers and contractors of the Power Holding Company of Nigeria plc • Transocean Drilling (UK) Ltd and Sedco Forex International Inc. in actions on the constitutionality of the Tax Appeal Tribunal • Schlumberger Anadril Nigeria Limited in an appeal at the Supreme Court on rights of appeal against National Industrial Court judgments • SIA Smartlynx Airlines on the enforcement of a foreign judgment for breach of aircraft lease agreement against AirNigeria Development Ltd • Bank PHB plc in a suit by shareholders against it, CBN and others, regarding CBN’s regulatory intervention • General Electric Company in an action arising from alleged breach of agency agreement • Daniel Power Plants Company Nig. Limited in an action against the Bureau of Public Enterprises and Niger Delta • Power Holding Company Limited in relation to the Federal Government of Nigeria’s privatization of the power sector and the acquisition of 80 percent shares in the Ogorode Generation Company Limited (owners of the Sapele IINIPP Power Plant in Sapele) Oil and Gas We advised: • Rosetti Marino SpA on its joint venture with PIVOT-GIS Limited • TGS NOPEC on a Nigerian joint venture • A foreign consortium on acquiring onshore OML interests from Shell Petroleum Development Company, National Agip Oil Company and Total E&P Limited • A UK company’s subsidiary on the acquisition of gas pipeline rights of way • Petrobras on restructuring its Nigerian subsidiaries as part of a global exercise Power and Infrastructure We advised on acquisitions of controlling interests by: • Kepco Energy Resources Limited in Egbin Power plc (1,320 MW power plant) and a syndicated USD 414.9 million asset financing • New Electricity Development Company Limited in Ikeja Electricity Distribution Plc and a syndicated USD 105 million asset financing

Prepared by Udo Udoma & Belo-Osagie, Lex Mundi Member Firm for Nigeria 40 Nigeria

Power and Infrastructure (cont’d) • NG Power-HPS Limited in First Independent Power Limited for five power stations with 721 MW aggregate installed capacity, and a syndicated USD 311.20 million asset facility • Seven Energy International Limited, for USD 100 million of Oando plc’s East Horizon Gas Company Limited and the syndicated USD 170 million asset financing We advised: • UAC Property Development Company plc on the construction, operation and maintenance of a combined cycle power plant for its Golden Tulip Hotel Lagos and a mixed use development • The President Obama Power Africa Initiative, working with the U.S. Department of Commerce’s Commercial Law Development Program on a model power purchase agreement for African power transactions • The Eko Rail consortium on operating Lagos State Mass Transit Rail System’s Blueline Private Equity We advised: • Actis on its disposal of a 14.78 percent in Diamond Bank plc • CAPE III Limited on its acquisition of UBN Insurance Brokers Limited and its investment in Wakanow Nigeria Ltd • Korean Investment Corporation on its indirect investment in IHS Nigeria plc • African Infrastructure Investment Fund on its indirect investment in IHS Nigeria plc • Emerging Capital Partners on the restructuring of IHS Nigeria plc • Abraaj on its acquisition of Fan Milk plc • Actis on its investment in Upstream Systems Limited (mobile monetization). • Cape II Limited on proposed divestment from Bevpak Nigeria Limited and divestment from Gas Terminalling Limited • ACA Holdings Limited on acquiring SIM Capital Alliance Limited • Actis on its First Concept & Properties Limited investment • African Development Bank and certain PFAs on a proposed investment in ARM-Harith Infrastructure Fund Real Estate We advised: • Duval Properties Limited on 27,000 square meter Jabi Lake Abuja mixed use development • Sanlam Africa Core Real Estate Investments Limited on the acquisition of a first class commercial office building • First Concept & Properties Limited on a USD 65 million construction financing development • Lousol Properties Limited on a USD 50 million commercial real estate finance facility Telecommunications, Media and Technology We advised: • Nokia Corporation on the global sale of Nokia’s Device & Services Business to Microsoft Mobile Oy in Nigeria • Swift Networks Limited on a sale by Monarch Communications Limited of its private network links license • Adlevo Capital LLC on its USD 2.3 million investment in Solo Phones Nigeria Limited • Emerging Capital Partners on the restructuring of IHS Nigeria plc • Smile Telecommunications on Nigerian aspects of multijurisdictional financing • Swift Networks Nigeria Limited on proposed divestments by CAPE II and others

Key Market Developments: Nigeria 41 Nigeria

Lex Mundi Member Contact

Daniel Agbor - [email protected] Myma Belo-Osagie - [email protected] Udoma Udo Udoma - [email protected] Udo Udoma & Belo-Osagie, Member firm for Nigeria Tel: 234.1.4622307.10/8970622

Prepared by Udo Udoma & Belo-Osagie, Lex Mundi Member Firm for Nigeria 42 South Africa Prepared by Bowman Gilfillan Lex Mundi Member Firm for South Africa

Trends and Projects Exports its Energy and Power Gold South Africa’s power supply constraints, arising from ongoing maintenance diamonds and outages on its aging coal-fired generation fleet, which constitutes just over 88 platinum percent of its total power generation mix of approximately 40 gigawatts (GW), reached a crisis point during December 2014. In response, the National Cabinet as well as other instructed the establishment of an “Energy War Room” to identify and oversee the minerals, machinery implementation of emergency and short-to-medium term supply options that will and equipment. complement the longer term options the government has already committed to in the Integrated Resource Plan for 2010-2030, which is the country’s plan for new generation supplies based on predicted demand over the next 20 years. This is likely to focus governmental efforts on the procurement of faster technology options such as cogeneration and thermal power generation using gas and heavy fuel oils, along with demand side management initiatives that may be somewhat less voluntary. In the longer term, the Department of Energy (DOE) issued its request for qualification and proposals for the much anticipated coal-fired, baseload, Independent Power Producer (IPP) program in December 2014. The program seeks to allocate 2.5 GW to IPPs which can commit to coming onto grid by December 2021. Top export Carbon Tax partners In terms of the annual budget speech, the Minister of Finance stated that the are China, Germany, introduction of a Carbon Tax in 2016 will provide an additional tool to deal more sustainably with the current electricity shortage, while lowering the electricity levy. the United States, Saudi A draft Carbon Tax Bill will likely be introduced in late 2015 to allow for more public Arabia, India and Japan. consultation. Shale Gas The government has recently placed significant emphasis on the development of a framework to facilitate further development of shale gas. The DoE released the Gas Utilisation Master Plan (GUMP) for public comment which is intended to provide a framework for investment in gas supporting infrastructure and to outline the role that gas can play in the electricity, transport, domestic, commercial and industrial sectors. Further, the Minister of Energy, in her 2014 Policy Budget Speech, indicated that the gas infrastructure development effort is premised on regional integration with Mozambique to the East, the importation of liquefied natural gas and the networking of various load centers for transporting and storing shale gas from the Karoo. This is in line with the requirements of the integrated resource plan (IRP) 2010 which targets 2,500 MW of new gas-fired power generation capacity. PetroSA has a dedicated focus on gas resource and has established a unit to ensure it is prepared for shale gas activities. Infrastructure Depressed coal prices do not to seem to have put a damper on coal terminal development in Richards Bay. Richards Bay Coal Terminal (RBCT) exported a record 71.3 million tons of coal in 2014, most of which was shipped by its shareholders. Its

43 South Africa

stated capacity is 90 million tons, which capacity is largely constrained by Transnet Freight Rail’s ability to provide wagons for delivery of the coal to the Terminal. Nonetheless, RBCT is likely to increase its capacity significantly (rumored as much as 115 million tons) in order to provide more capacity for junior miners. Also in 2014, Oiltanking MOGS Saldanha (RF)(Pty) Ltd (OTMS), a joint venture between OTGC Holdings (Pty) Ltd and MOGS (Pty) Ltd, accomplished a milestone in its development of an oil-blending and storage terminal in Saldanha Bay as its environmental impact assessments were approved by the Department of Environmental Affairs (DEA). Saldanha’s location gives the joint venture a strategic advantage in respect of promoting the development as a future oil transhipment hub. The port of Ngqura appears set to continue consolidating its position as a transhipment hub as, since its opening in 2009, it has shown steady growth in its container throughput - mostly transhipments. There are various infrastructure development plans in place for the port, including the construction of a new manganese terminal by the first quarter of 2019 as well as a proposed liquid bulk storage tank farm. Legislative News The B-BBEE Act and Codes of Good Practice Broad-Based Black Economic Empowerment (B-BBEE) is a central part of the South African Government’s Economic Transformation Strategy. The formulation of policy and legislation to achieve B-BBEE has been driven by the Office of the president, together with the Department of Trade and Industry (DTI). A multi-faceted approach to B-BBEE has been adopted which aims to increase the numbers of black people, specifically South African citizens who have been racially classified as African, Indian or Colored, that manage, own and control the country’s economy, and to decrease racially-based income inequalities. The Broad-Based Black Economic Empowerment Amendment Act 46 of 2013 (the Amendment Act), which amends the Broad-Based Black Economic Empowerment Act 53 of 2003 (B-BBEE Act), went into effect in October 2014. Importantly, for sectors such as mining and petroleum in which legislated charters govern B-BBEE at the moment, Section 3(b) of the Amendment Act will only come into effect in October 2015. This section provides that the Amendment Act prevails over any other act in force before its commencement if the conflict specifically relates to B-BBEE. This now places a definite deadline on the much spoken of alignment of such charters, which is underway at present. The Amendment Act makes it a criminal offense to engage in fronting or to make deliberate misrepresentations in relation to an enterprise’s true B-BBEE status, i.e. where enterprises, for example, make representations that they have adopted particular B-BBEE initiatives in order to score points when, in substance, these initiatives have not been adopted. The Amendment Act provides for fines for fronting which may be up to 10 percent of a company’s annual turnover. The Amendment Act creates a Broad-Based Black Economic Empowerment Commission (the Commission), which is responsible for overseeing and promoting adherence to the B-BBEE Act, and investigating any B-BBEE matter after receiving a complaint or on its own initiative. For example, the Commission may investigate alleged “fronting” practices and refer those practices for prosecution. The Commission is to be established by March 31, 2015. In terms of the Amendment Act, listed companies are required to report annually on their compliance with B-BBEE and transactions that are above a certain level, yet to be determined must be reported to the Commission. In addition, changes to the B-BBEE Codes of Good Practice were published by the Minister of Trade and Industry for public comment in the Government Gazette. The proposed changes take effect on April 30, 2015.

Prepared by Bowman Gilfillan,Lex Mundi Member Firm for South Africa 44 South Africa

Mineral and Petroleum Resources Development Act The Mineral and Petroleum Resources Development Amendment Bill 2013 (the MPRDA Bill) was approved by the National Assembly and by the National Council of Provinces on March 27, 2014. The purpose of the MPRDA Bill was, amongst other things, to amend the Mineral and Petroleum Development Resources Act 28 of 2002 (MPRDA) to remove ambiguities that exist within the MPRDA, and to provide for the regulation of associated minerals, partitioning of rights and enhance provisions relating to the regulation of the mining industry through benneficiation of minerals or mineral products. However, in early 2015, the President referred the proposed amendments to the MPRDA back to the National Assembly due to constitutional concerns including the apparent imposition of quantitative restrictions on exports, which seem to contravene international agreements, such as the General Agreement on Trade and Tariffs and the Trade Development and Cooperation Agreement. Also up for reconsideration are the Oil and Gas Provisions. Environmental Legal Framework There have been a number of changes to South African environmental law. The recent amendments to environmental legislation (including water, waste, air quality and general environmental legislation) purport to integrate the Environmental Management Provisions for the mining industry into general environmental legislation and align the processes in obtaining environmental approvals for mining projects. Further regulatory amendments (including to the regulations under the mining legislation) are anticipated in order to provide more comprehensively for, and further align, the proposed “one environmental system.” In addition, the much delayed Contaminated Land Provisions in the National Environment Management: Waste Act 59 of 2008 (the Waste Act) were enacted May 2, 2014, with final norms and standards for remediation of contaminated land and soil quality also being published at this time. With the enactment of the Contaminated Land Provisions, it is advisable that in the context of a transfer of land, one undertakes a comprehensive due diligence investigation to assess the possible contamination, determine the liabilities of the parties and alert a potential purchaser to future obligations in respect of that land. Further to the Contaminated Land Provisions mentioned above, amendments to the Waste Act in 2014 resulted in residue stockpiles and residue deposits in the mining sector now being regulated in terms of the Waste Act, where it previously had been excluded from the ambit. The 2014 amendments also set in motion mechanisms for the introduction of a draft pricing strategy for waste management charges being published, although further legislation will be required in order for such charges to be imposed. Insurance The proposed Governance and Risk Framework Management for Insurers (the Proposed Framework) published by the Registrar of Long and Short-Term Insurance (the Registrar) in terms of the Long-Term Insurance Act, No. 52 of 1998 (the LTIA) and the Short-Term Insurance Act, No. 53 of 1998 (the STIA) was published by the Registrar in the Government Gazette for public commentary and will be implemented by April 2015. The Proposed Framework intends to: • Give effect to the governance, risk management and internal control measures mooted in the Insurance Laws Amendment Bill, 2013 (the Bill) which was withdrawn by the Minister of Finance • Take into account public comments submitted by the National Treasury on the Bill • Give effect to international standards as set out in the Insurance Core Principles of the International Association of Insurance Supervisors (October 2013) Insurers will be required to implement and document an effective governance framework that provides for the prudent management and oversight of its insurance business and adequately protects the interests of its policy holders. The governance framework must be proportionate to the nature, scale and complexity of the insurer’s business and risks.

Key Market Developments: South Africa 45 South Africa

POPIA In April 2014, the President set the commencement date for certain sections of the Protection of Personal Information Act No 4 of 2013 (POPIA) by proclamation in the Government Gazette. In terms of this proclamation, the following sections of POPIA commenced with immediate effect: • Section 1 (the definitions section) • Part A of Chapter 5 (regarding the office of the Information Regulator including, amongst other things, the establishment and powers, duties and functions of the Information Regulator) • Sections 112 and 113 (regarding the regulations that may be made under POPIA, and the procedure for making those regulations) The remaining sections of POPIA will commence on a date yet to be determined by the President. Bowman Gilfillan’s Recent Activity

Bowman Gilfillan Africa Group is one of Africa’s premier corporate law firms. The Group is well represented in what are considered to be the hub jurisdictions in the key regions of the African continent. Through these offices, we are able to coordinate advice on transactions, and offer a seamless service to our clients, making the execution of cross border transactions less cumbersome, time-consuming and costly and hence more efficient. Our 400 lawyers are some of the best practitioners in their respective jurisdictions, with significant “on-the-ground” understanding of the business environment in the jurisdictions in which they operate. This year, our South African office was involved in a number of noteworthy mergers and acquisitions and equity capital market transactions. A summary of recent highlights is set out below: Financial Services Sector Counsel to Standard Bank Group in relation to its USD 27.3 million disposal of 10 percent of its shares in Standard Bank Namibia to employees of Standard Bank Namibia and a community trust, in compliance with regulatory requirements to increase local participation in the financial sector. Food and Beverage Counsel to: • SABMiller in respect of the proposed combination of The Coca-Cola Company, SABMiller and Gutsche Family Investments’ (majority shareholders in Coca-Cola SABCO) bottling operations in Southern and East Africa to create Coca-Cola Beverages Africa, which will be the largest bottler of soft drinks in Africa and the 10th largest in the world, with annual revenue of USD 2.9 billion • COFCO (Hong Kong) in relation to South African competition approvals which are required in respect of its USD 1.5 billion acquisition of 51 percent of the agricultural business of Noble AgriInsurance and Intermediaries • Alexander Forbes Group Holdings in its dual track ZAR 4 billion M&A, and ZAR 9.768 billion IPO process, which resulted in Alexander Forbes Group Holdings listing on the JSE. After announcing its intention to float, the company launched an offer for subscription and a concurrent offer for sale by certain of its existing shareholders to institutional investors and, by invitation, to other selected investors to subscribe for the offer shares in Alexander Forbes Group Holdings. The offer shares comprise, in aggregate, 33.4 percent of the total issued share capital of the company at listing.

Prepared by Bowman Gilfillan,Lex Mundi Member Firm for South Africa 46 South Africa

Mining Counsel to: • Northam Platinum in relation to the establishment of a broad-based consortium of Historically Disadvantaged South Africans, which will hold 31.4 percent of Northam’s issued shares through a combination of a subscription for new ordinary shares and the acquisition of ordinary shares from the Public Investment Corporation. Upon implementation of this ZAR 6.6 billion transaction, Northam’s total effective HDSA ownership level will increase to approximately 35.4 percent. • Shanduka Group and the majority shareholders in relation to the restructuring of Shanduka Group. The proposed transaction will enable Mr. Cyril Ramaphosa, the Deputy President of South Africa, to exit his business interest in Shanduka to focus on his responsibilities in government and to ensure that his family’s business interests do not conflict with his functions in the government. Oil and Gas Counsel to BP in relation to its black economic empowerment transaction in terms of which: (i) Kapela Investments will acquire 20 percent, plus one share; and (ii) the BPSA Education Foundation will acquire 5 percent of the entire issued share capital of BP Southern Africa. Retail and Consumer Goods Counsel to: • RCS Cards in respect of its acquisition of the JD Group consumer finance business operated by JDG Trading and JD Consumer Finance in South Africa and other smaller JD Group entities excluding its insurance operations, in Namibia, Swaziland and Botswana • Platform Speciality Products Corporation in respect of its USD 3.5 billion acquisition of 100 percent of the issued share capital of Arysta LifeScience, a global provider of crop protection and life science products • The Standard Bank of South Africa Ltd, Citigroup Global Markets and J.P Morgan Securities (as underwriters and joint bookrunners) in a ZAR 10 billion rights offer by Woolworths Holdings of ordinary shares in relation to the David Jones acquisition • Barclays Capital and ABSA Capital (as joint bookrunners) in a ZAR 18.2 billion rights offer by Steinhoff International Holdings in relation to its listing in Frankfurt • TRW Automotive Holdings Corporation in relation to competition approvals which are required to implement this global transaction involving its USD 11.7 billion disposal of the entire issued share capital of TRW Automotive Holdings Corporation to ZF Friedrichshafen (through ZF North America) • Continental in relation to South African competition approvals which are required in respect of its USD 1.9 billion acquisition of Veyance Technologies (manufacturer of Goodyear engineered products) Telecommunications Counsel to: • The shareholders of Neotel in respect of their ZAR 7 billion disposal of 100 percent of the issued share capital in Neotel to Vodacom Group • French telecoms multinational, Orange, in relation to the disposal of its entire stake in Orange Uganda to Lebanese telecoms operator, Africell Holding

Key Market Developments: South Africa 47 South Africa

Lex Mundi Member Contact Jonathan Lang - [email protected] Jonathan H. Schlosberg - [email protected] Peter Whelan - [email protected] Bowman Gilfillan Member firm for South Africa Tel: 27.11.669.9000

Prepared by Bowman Gilfillan,Lex Mundi Member Firm for South Africa 48 Uganda Prepared by AF Mpanga Lex Mundi Member Firm for Uganda

Trends and Projects Oil and Gas Uganda’s oil and gas resources are estimated to exceed 1 billion barrels of oil equivalent. We expect that plateau production from Uganda’s four licences will average 200,000 to 230,000 barrels per day. In 2012, Tullow Oil PLC signed two Production Sharing Agreements (PSAs) relating to the Lake Albert Rift Basin with the government enabling Tullow and its new partners to complete the farm-down for a consideration of USD 2.9 billion. Ownership and operatorship responsibilities within the basin have been divided between the partners. Total E&P Uganda BV operates Exploration Area-1 (EA-1) with Tullow operating Exploration Area-2 (EA-2). In the former Exploration Area-3A, CNOOC Uganda Limited operates the new Kanywataba license and the Kingfisher production licence. The Ugandan government granted its first oil production licence to CNOOC in September of last year and output from the 635 million barrel oil field is expected to begin by 2017, supplying a planned 30,000 barrel per day oil refinery. The government’s main focus is on the establishment of the necessary regulatory Main exports framework to ensure that the resources of oil and gas are used for the development of national infrastructure, agricultural productivity, science and technology. include Development of the petroleum refinery will also be fast-tracked. Government will continue to develop local capacity in the management of oil resources through coffee, training. Other priorities will include further exploration, development of petroleum facility standards and product specification, monitoring of the petroleum supply fish, fish products, industry, maintaining the National Petroleum Information System, enforcing tea, cotton, flowers, operational standards and carrying out laboratory testing of petroleum products, accelerating the construction of the Kenya-Uganda Oil Pipeline, and undertaking and gold. the feasibility study for the Uganda-Rwanda Oil Pipeline. Hydroelectric power The Government of Uganda has commenced the construction of the Karuma Hydropower Project, estimated at USX 4.3 trillion (USD 1.7 billion). The 600 MW dam was commissioned by President Yoweri Museveni in August 2013. Eighty-five percent of the funding will be procured by Sinohydro Corporation Ltd., a Chinese firm with a soft loan from the China Exim Bank, and the Uganda government will cater for the remaining 15 percent. In addition, the preliminary works for the construction of the 183 MW Isimba Hydropower Project located in the Kamuli District along the River Nile has started. The project construction contract had been awarded to the China International Water and Electric Corporation, a Chinese government-owned firm. Construction began in October 2013 and is expected to end in 2017 at a cost of USD 415 million from the China Exim Bank. The Ayago Power Station is a 600 MW hydroelectric power plant that will be constructed on the Victoria Nile, downstream of the Karuma Power Station but upstream of Murchison Falls. The project will be developed in two simultaneous phases, known as Ayago North (estimated capacity: 350 MW) and Ayago South (estimated capacity: 250 MW). In August 2013, that award was rescinded, and the

49 Uganda

construction contract was awarded to China Gezhouba Construction Company. On the public stand, the government’s emphasis is directed towards the continuation to pursue the interventions aimed at increasing electricity generation, supply and access throughout the country. A large part of the 2013-2014 national budget was allocated to the Rural Electrification Program. Finance, Banking and Insurance The Ugandan Banking sector has seen a number of developments in the last year. From the legislative side, the Anti-Money Laundering Act 2013 was finally enacted bringing into play several checks and balances of banking transactions within the industry as well as an increase in accountability. Further, the Central Bank instituted Mobile Money Guidelines which pave the way to the regulation of the buoyant mobile money segment that recorded UGX 18.6 trillion last year, increased 40 percent from 2013. To put this into perspective, in the 2014-2015 financial year, Uganda’s economy is expected to run on a UGX 14 trillion purse. The Bank of Uganda in its regulatory role closed two banks, the National Bank of Commerce and the Global Trust Bank. The minimum capital requirements were revised for life insurers, non-life insurers and reinsurance firms, increasing to UGX 4 billion, UGX 3 billion and UGX 10 billion, respectively, all of whom had to comply by October 2014. This increase has been predicted to lead to a number of mergers and acquisitions within the industry with many local players pooling resources in order to stay in the market. Infrastructure The key road projects to be undertaken as a priority by the Government of Uganda include the Northern Transport Corridor, Kampala-Entebbe Expressway, rehabilitation of Kampala city roads, the Hoima-Kaiso-Tonya road, bridge construction including the second Jinja Nile Bridge and the rehabilitation of district roads. Emphasis will also be placed on strengthening contract management to improve absorption of the budgeted resources and ensure the timely completion of road projects. In the water transport subsector, the government has continued to prioritize the improvement of inland water facilities through the provision of ferry services and construction of landing sites on Uganda’s major water bodies. In the railway subsector, emphasis is mainly placed on accelerating the implementation of the interventions to revitalize railway transport. These will include the design for the construction of the Tanga-Arusha-Musoma Railway Line and the Kampala Port, accelerating the rehabilitation of Tororo-Packwach and Kampala Kasese Railway Lines, fast-tracking the implementation of the joint Memorandum of Understanding signed between the Government of Uganda, Sudan and South Sudan for the joint design studies to construct Gulu-Atiak-Nimule-Juba Railway Line, and completing the redesign of the 251 km Kampala–Malaba Railway Line into standard gauge. Telecommunications In the telecommunications industry, the Ugandan market has registered many developments in recent years; it is filled with vibrant players such as MTN Uganda Limited and Airtel Uganda, the two largest companies, along with Africell, Smile Telecom and Eaton Towers. Recent transactions saw the acquisitions of Orange Uganda by Africell Holdings of Lebanon, and Bharti Airtel of Warid Telecom. With regard to digital television, Uganda is on track to achieve its digital migration target of December 2015.

Prepared by AF Mpanga, Lex Mundi Member Firm for Uganda 50 Uganda

Legislative News

Outside the recurring and ever changing Stamps and Tax Laws, the only significant commercial related legislation, which was enacted in 2014, was the Industrial Property Act of 2014, which caters for the regulation of the promotion of inventive and innovative activities, facilitation of the acquisition of technology through the grant and regulation of patents, utility models, industrial designs and ‘technovations’. Other legislation passed in 2014 were the Anti-Homosexuality Act of 2014 and the Anti-Pornography Act of 2014. AF Mpanga’s Recent Activity

Bowman Gilfillan Africa Group is one of Africa’s premier corporate law firms. The Group is well represented in what are considered to be the hub jurisdictions in the key regions of the African continent. Through these offices, we are able to co-ordinate advice on transactions and offer a seamless service to our clients, making the execution of cross border transactions less cumbersome, time-consuming and costly, and hence more efficient. Our 400 lawyers are some of the best practitioners in their respective jurisdictions, with significant “on-the-ground” understanding of the business environment in the jurisdictions in which they operate. At the recent Cell C Deal Makers Annual Awards held in Johannesburg, Bowman Gilfillan Africa Group won the Africa Legal Advisers category by both deal value and number of transactions in Africa (excluding South Africa). BGAG’s total deal value in this category of USD 4.627 million constitutes 14.84 percent of the market share while the 41 reported transactions equals 36.61 percent of market share. Group member, AF Mpanga, has a proven track record which has enabled it to build a reputable clientele, which includes the top tier of local and international financial institutions, private equity funds, leading manufacturers and industrialists, international oil companies, international investors, print and electronic media houses, international and local non-governmental organizations as well as high net worth individuals. Recently, AF Mpanga has been involved in a number of matters which demonstrate our depth of expertise and ability to provide flexible, solutions-orientated and strategic advice. A summary of recent firm highlights is set out below: Banking and Finance We are currently advising: • A client in relation to a USD 600 million financing of the 600 MW Karuma Hydropower Project • The leading manufacturer of corrugated packaging products in Uganda on a USD 32 million financing deal from Standard Chartered Bank (London) • Wananchi (Group) Holdings Limited on the Ugandan law aspects of an additional USD 100 million investment from Helios Investment Partners • The East African Development Bank, as lender on the construction of a commercial office development in Kampala • The East African Development Bank, as lender on the construction of a shopping and commercial retail development complex in Entebbe • The National Development Bank of Sri Lanka on the legal and regulatory regime governing financial institutions in regards to Islamic Banking

Key Market Developments: Uganda 51 Uganda

Corporate, Mergers and Acquisitions We are currently advising: • Orange SA (previously known as France Telecom) in the disposal to Africell of its majority shareholding held by Atlas Services Belgium in its Ugandan subsidiary, Orange Uganda Limited • Eaton Towers, a leading independent towers company in Uganda, in the acquisition of the tower infrastructure segment of Bharti Airtel in Uganda • Harvard Management Company on the acquisition of shares and the assets of two agro-forestry companies in Uganda • The China Africa Development Fund (CADF) on its acquisition of shares in Guangzhou Dongsong Energy Group, a local incorporated company with an exploration license for phosphates, base metals, and uranium covering 26 km² in Tororo District • A Canadian Trust company on the sale and deregistration of three aircraft sub-leased to a Ugandan aircraft operator • Ascent Capital on its USD 15 million private equity investment in the largest fast moving consumer goods company in Uganda We advised: • A South African insurance company on its proposed acquisition of a stake in an insurance company in Uganda following the increase of the statutory minimum capital requirement of all insurance companies in Uganda • Lion Assurance Company on the funding and increase of its capital following the increase of the statutory minimum capital requirement of all insurance companies in Uganda • Alexander Forbes Equity Holdings Proprietary Limited and its subsidiaries on the Ugandan law aspects regarding the restructuring of its capital structure, involving, inter alia, various debt to equity conversions, preference share redemptions, share buy backs and acquisitions of loans outstanding as well as the entry into of a new term loan agreement, revolving credit facility agreement and two sets of preference share funding instruments issued by shareholders in Alexander Forbes Equity Holdings Proprietary Limited in connection with the restructure Infrastructure and Natural Resources We are currently advising: • A developer of two hydropower projects on the River Ndugutu and the River Sindila • A developer of a proposed hydropower project on the River Nyamagasani • One of the bidders for the construction of the Uganda National Oil Refinery • CNOOC Uganda Limited on the legal and regulatory aspects regarding the development and establishment of a central processing facility, a liquefied petroleum gas processing facility as stipulated in its field development plan • EleQtra, a leading player in the development, investment, management and operation of private infrastructure in emerging economies, in the construction of a solar park in Eastern Uganda • One of the leading premium international hotel brands on the establishment and construction of a five star hotel in Kampala

Prepared by AF Mpanga, Lex Mundi Member Firm for Uganda 52 Uganda

Capital Markets and Regulatory We are currently advising: • Prudential Investment Management Inc. on the regulatory aspects for the provision of investment management services in Uganda • Noor Bank on the legal and regulatory aspects of the capital markets regime in Uganda • Barclays Wealth Management on the licensing and other regulatory aspects of the capital markets regime in Uganda • Standard Chartered Bank Singapore on the regulatory aspects of cross-border investment activities in Uganda • Facebook Inc. on the telecommunication and competition law regime applicable to the introduction of certain products with a leading mobile network operator in Uganda We advised: • Orange SA on the application and approval of the competition/anti-trust law aspects during its disposal to Africell, of its Ugandan subsidiary, Orange Uganda Limited. This was the very first approval from the Uganda Communication Commission (the industry regulator) under the newly-established Competition Secretariat. Litigation and Arbitration We are currently representing: • Reynolds Construction Company (RCC) in a suit against the government objecting to the irregularities in the tendering process in regards to a project for the completion of the Northern Bypass in Kampala amounting to EUR 65 million • One of the leading financial institutions in Uganda in class action against 12 banks concerning the legality of the levying of bank charges on certain transactions in Uganda • Ezee Money Limited against one of the leading mobile telecommunication operators in Uganda under the ant • TOTAL E&P, one of the licensed oil & gas exploration and production companies in Uganda, in a suit concerning the disposal of its waste products • The Nation Media Group on its challenge of the constitutionality of certain provisions of the Press and Journalists Act Cap.105

Lex Mundi Member Contact

David Mpanga - [email protected]

AF Mpanga

Member firm for Uganda

Tel: 256.41.425.4540

Key Market Developments: Uganda 53 About Lex Mundi

Lex Mundi is the world’s leading network of independent law firms with in-depth experience in 100+ countries. Lex Mundi member firms offer clients preferred access to more than 21,000 lawyers worldwide – a global resource of unmatched breadth and depth. Each member firm is selected on the basis of its leadership in – and continued commitment to – its local market, and each brings comprehensive knowledge and understanding of the business climate, laws, culture, politics and economy of its respective jurisdiction. Working with Lex Mundi member firms you can be assured that you will be connected to: • Premier member firms vetted for their leadership, expertise and capabilities for handling complex matters and disputes • Global reach of unmatched breadth and depth • Market- and industry-specific knowledge and strong connections to decision makers and influencers at the local, national and global levels • Seamless client service for cross-border matters • Legal resources to effectively and confidently deal with legal issues virtually anywhere in the world Through close collaboration, information-sharing, training and inter-firm initiatives, the Lex Mundi network is an assurance of connected, on-the-ground expertise in every market in which a client needs to operate. Working together, Lex Mundi members are able to seamlessly handle their clients’ most challenging cross-border transactions and disputes. Member law firms are located throughout Europe, the Middle East, Africa, Asia and the Pacific, Latin America and the Caribbean and North America. Through our non-profit affiliate, the Lex Mundi Pro Bono Foundation, members also provide pro bono legal assistance to social entrepreneurs around the globe. For more information, please visit www.lexmundi.com and www.lexmundiprobono.org.

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