Collaborative projects: The government seeks partners for large developments

A push to realise infrastructure development and management has led the Gabonese government to sharpen its focus on public-private partnerships (PPPs) as a means of sharing the risks and cost of major development initiatives. The government’s plan for achieving emerging market status by 2025, “Emerging Gabon”, emphasises the importance of the private sector and prioritises PPPs as a key feature of the strategy.

The PPP format traditionally offers a big advantage in that it allows the government to play the role of regulator and partial financer, but let the private partner handle the operations and management. As Alain Rempanot Mepiat, general manager of the Chamber of Commerce, Agriculture, Mining, Industry and Crafts of Gabon, told OBG, “The government is good at launching projects, but it often experiences difficulties when it comes to maintaining them.” PPPs are an increasingly common feature Africa’s frontier and emerging markets, and Gabon has already seen some success with the programmes, with PPPs for utilities such as water, electricity, waste management and for the management of transport infrastructures. Now, the government is seeking to make PPPs in agriculture and fishing, mining, vocational training and telecoms.

Partnerships

In 1997, Gabon became one of the first sub-Saharan African countries to privatise a water and electricity utility when it transferred partial ownership of the Société d’Énergie et d’Eau du Gabon (SEEG) to France’s Veolia, which currently holds a 51% stake. Other PPPs in the agricultural sector are Singapore-based Olam International’s palm oil and rubber plantations, which will ultimately incorporate 50,000 ha of planted land. The Gabonese government originally entered the joint ventures with a minority 30:70 share for Olam Palm Gabon and 20:80 for Olam Rubber Gabon, but in March 2014, Olam announced that the government would inject an additional €42.4m in capital to the joint ventures, increasing its share to 40% in both. Another, separate joint venture shared 40:60 between the Gabonese government and Olam involves the establishment and management of the special economic zones (SEZs) at Nkok and Mandji Island. In the mining sector, Compagnie Minière de l’Ogooué (COMILOG) is a world leader in manganese mining with two major shareholders: the Gabonese state holds a 28.9% share, and the French company Eramet has a 63.7% stake. COMILOG additionally operates the Trans-Gabon railway via its subsidiary, Société d’Exploitation du Transgabonais (SETRAG).

Two new vocational institutes, the Mining School of Moanda (École des Mines et de Métallurgie de Moanda, E3M) and the Oil and Gas Institute (Institut de Petrol et Gas, IPG) are also covered by the PPP framework. E3M, which plans to welcome its first class of students in 2016, is a partnership with COMILOG, while the IPG is a partnership involving a number of major oil companies, including Total, Shell, Perenco, Addax and Eni. In the fisheries sector, a major PPP was signed in February 2013 with Mauritian company Ireland Blyth Limited (IBL) for the revitalisation of Société Industrielle Frigorifique du Gabon (SIFRIGAB).

Under the €100m deal, in which the government holds a 40% share and IBL a 60% share, IBL aims to develop the deep sea fishing sector through the opening of factories for tuna, fish meal, and fish oil and by building a shipyard. The government is currently seeking a PPP partner for the Gabon-Congo fibre-optic network, which is expected to provide low-cost internet access to communities along the Gabon-Congo border.

Legal Framework

As the government’s investment in PPPs increases, so does the urgency for the establishment of a clear legal framework that will underpin such partnerships. Rick Emery Tsouck Ibounde, principal economist at the World Bank in Gabon, told OBG, “The government has allocated funds to resolving the infrastructural deficit, but will need PPP financing to achieve its development programme. Investors, meanwhile, want to know which projects will be financed by what mechanisms – PPP or classic debt. Thus, there is a need to introduce a PPP institutional framework now.”