Angola s Business Opportunities

Transcription

1 1 Angola s Business Opportunities Africa Australia Infrastructure Conference 3rd -4th September 2012 Presentation by: Maria Luisa Abrantes, PhD CEO Angola National Agency for Private Investment

2 2 Angola Geographical data location: Western Coast of Southern Africa Area: km² Marine frontier: 1650 km (Atlantic Ocean); Land frontier: km (Congo, DRC, Zambia and Namibia) Climate: Tropical Average Temperature : 30ºC (max) 17ºC (min) Inhabitants: (projection) Capital: Luanda (more than inhabitants) Administrative division: 18 Provinces Main cities: Luanda, Lobito and Namibe Main airport: The 4 de Fevereiro in Luanda Main Rivers: Kwanza, Cunene and Cubango Highest point: Moco Hill (2.620m) in Huambo Main Beaches: Ilha do Cabo, Palmeirinhas and Mussulo in Launda; Baía Azul, Cota and Caotinha (Benguela); Restinga (Lobito); Miragens, Azul (Namibe); Language: Portuguese (official) plus diverse local dialects such as Umbundu, Kimbundu, Kikongo, Fiote and Chokwé. Main religions: Catholic and Protestant Currency: Kwanza (AKZ) Head of the Estate: The President, José Eduardo dos Santos Government: Democracy led by MPLA

3 3 Introduction Angola is strategically located on the Atlantic Cost of west Africa, acting as a gateway to Southern and Central Africa by road and railroad networks; Angola has approximately 12% of Africa hydrographic network and 7.4 million ha of arable land; Angola is one of the fastest growing economies in the world expecting a GDP of 8% in 2012; The Angolan government main objectives are to revamp and develop the economy with its diversification prioritizing the rehabilitation and construction of the basic infrastructures, to allow the circulation of people and goods as result of the private investment in the agriculture, agro-business, industry and fisheries. The goal is to reduce poverty and the regional asymmetries;

4 4 From 2000 to 2011 the Angolan Government invested an average of USD 4.7 billions per year to the rehabilitation of infrastructures. From 2002 to 2012 the Government rehabilitated 11 Airports, has been building the new Luanda International Airport with an extension of hectares, rebuilt and built 400 bridges, 4000 km of roads and 2000 km of railroads. Five damns were rehabilitated, namely: Mabubas Gove Matala Lomaúm Capanda (1st phase).

5 5 1. Transportation Sector

6 6 Strategy -Privatization, to allow resources managed by the state could be transferred to the private sector; -Integration of Angolan transportation network into the SADC network; - Creation of authorities on an institutional level for the planning of the road network; -Creation of public institutes as regulatory bodies for different transportation subsectors; - Develop the 3 main corridors originating from ports by regenerating rail companies; - Revamp and modernize ports and the shipping sector, bringing in private enterprise and an adequate administration to re-establish the competitiveness of national companies; - Institutional reorganization and strengthening.

7 7 Areas of Investment Road Transportation -Inter-provincial and inter-municipal passenger transportation; - Medium and long haul transportation of goods; - The implementation of incentives for investments in personalized taxi system is being studied; a Railways - State ownership and operation, through the CFL, CFB and CFM; - Open to private investment in the concession process, arranging of funds, technical assistance and repairs, and supply of rolling stock, communications, etc; -The government has approved a preliminary study called Ango Ferro, to refurbish, upgrade, construct and extend the whole of Angola s rail network; Corridors - Malange, Lobito and Namibe; - It is the government s view that the 3 corridors warrant the same degree of priority and constitute an open area in which both public and private investment can operate, since they act as a support for the development of the national economic, access to the sea for land-locked countries, and stimulate regional development.

8 8 Areas of Investment Ports - Open to private investment in the concession process, arranging of funds,, technical assistance, supply of equipment, communications, etc. - Leasing port: Luanda; -Operating port: Lobito, Namibe, Cabinda, Soyo and Porto Amboim; Shipping -Both coastal shipping and international maritime transportation in Angola are liberalized activities; Aviation - Liberalized activity for domestic aviation; - International air transportation is an activity conditioned by the exercise of traffic rights to be negotiated with the national flag-carrier; - Private investment is possible in the infrastructurerefurbishment process and provision of service;

9 9 Projects Increase road-transportation capacity; Refurbishment of Luanda Railway (CFL), Benguela Railway (CFB) and Moçamedes Railway (CFM); Implementation of the SITLOB project; Refurbishment of the Port of Lobito, of Namibe, Amboim and Soyo; Construction of Viana Dry Dock; Acquisition of Marine Navigational Aid equipment; Regeneration of aeronautical infrastructure; Acquisition of Aviation Navigational Aid equipment; Profession Training;

10 10 2. The Telecommunications Sector

11 11 Delimitation of sectors of law Law number 5/02 of April 16th, 2002; Absolute Reserve of State: Basic telecommunications network; Relative Reserve of State: Telecommunications services for public use; and Economic activities liable to be engaged by entities not belonging to the public sector, by way of a concession agreement. Challenges Increase competition in telephony market; Improve internet services offer and universalize it; Improve corporate segment offer; Develop National and international backbone; Regulate pay-tv duopoly;

12 12 Major Liberalized Market Operators -Cellular Telephony Business: UNITEL and MOVICEL; -Landline Service Licenses: Mercury (Sonangol Subsidiary), Nexus, Wezacom and Mundo Startel; -Data communication licenses: Multitel and ACS; -Ten authorized ISPs;

13 13 Regulatory Framework Basic telecommunication law (law number 8/01 of May 11th, 2001); Regulations governing access to business of providing telecommunications services for public use, initially (Decree n 18/97 of March 27th, 1997 and updated by Decree n 44/02 of September 6th, 2002); Regulations governing telecommunications services for public use (Decree n 45/02 of September 10th, 2002); Regulations governing Prices of Telecommunications Services for public use (Decree n 03/04 of January 9th, 2004); General regulations governing interconnection (Decree n 13/04 of March 12th, 2004); National Numbering Plan; National Frequencies Plan (Decree n 10/03 of March 7th, 2003); Constitution of INACOM (Decree n 115/08 of October 7th, 2008); Foreign individual persons or corporate entities cannot be majority shareholders in the capital of public service telecommunications operators (Article 18 of Law n 8/01 of May 11th, 2001); The direct or indirect stake of a telecommunications operator in the capital of another to provide the same service cannot exceed 10% (Article 17, of the same law);

14 14 3. The Power Sector

15 15 Initiatives Upgrade, modernize and expand electricity production capacity; Promote development of the national electricity grid, including the Northern/Central and Central/Southern systems; Promote development of local sources, such as small hydroelectric power plants for electrification of rural zones; Start to put in place the national Electrification Program which includes the development of new sources of energy; Increase and diversify the production of electricity by using energy derived from water, solar, wind and biomass sources; Institutional reorganization of the electricity sector, with the possibility of creating private companies for the production and distribution of electricity;

16 16 Energy Production The sector is going from its current installed capacity of MW to reach MW within 5 years; The government plans to hand over to private operators, by means of public tenders, for construction and operation based on the BOT system; Public-Private Participation A review of the general Law on Electricity is currently underway to make it possible for private entities to engage in electricity sector-related activities. Those include the production and distribution of energy by private entities under Government concessions; Angolan Generation System The North system covers Luanda and provinces of Bengo, Malange, Kwanza Norte and Kwanza Sul; The centre system covers the provinces of Benguela and Huambo; The south system covers the provinces of Huila and Namibe;

17 17 Total Production Costs (USD/MWh) Investments needed by 2015 (billion USD) Angola LNG 2 Refining 8 Logistics 2 Retail 3 Total 15 Priority technologies (USD/Mwh) 65 CCGT 75 Gas 80 Coal 95 Hydro Complementary technologies (USD/Mwh) 140 Mini-hydro 155 Wind 170 Diesel 210 Biomass 320~425 Solar Source: Water and Energy Ministry Masterplan

18 18 4. The Water Sector

19 19 Angola is the second most endowed country in Africa in terms of water resources with intense rainfall in almost all the country; 60% of Angola records an average annual rain of about 1000mm. Only 50% of the population has access to potable water, but only 16% has piped water; It s worth to see the cities infrastructure, stretching grids, water treatment,supplies and the sewage system.

20 20 Summary of Hydro Capacity Scheme Location River Nº of Groups Installed Power Present Situation Capanda Malanje Kwanza MW Operational Cambambe K. North Kwanza MW Matala Huíla Cunene 3 40,8 MW Lomaum Benguela Catumbela 3 35 MW Mabubas Bengo Dande 4 17,8 MW Biópio Benguela Catumbela 4 14,4 MW Chicapa L. South Chicapa 4 20 MW Operational for reabilitation 2 Operational in reabilitation Not Operational for reabilitation Not Operational for reabilitation 3 Operational in reabilitation About to built Source: ENE (2001) In 2001 hydropower generation represented 62% (1,017 Gwh) of ENE total power generation

21 21 Biopio and Chicapa damns need to be rebuilt; There s a regional project related to the Okavango river with an area of 323 square kilometers which has an water volume of 94,5% in Angola, 2.9% in Namibia and 2.6% in Botswana.

22 22 Tax Incentives Development Zones From USD 1 million up to USD 10 million, transfer of dividends at the 3rd year; Zone A: From USD 10 million up to 50 million, Luanda, principal municipalities of transfer of dividends at the 2nd year; Benguela, Lobito, Huila and Cabinda The rates of the dividends to be From USD 50 million, transfer of transferred are dividends at the first year. negotiated on a From Usd 5 million dividends transfer at case by case base Zone B: and must be part of Remaining municipalities of Benguela, the 1st year; the investment Cabinda, Huíla, Kwanza Norte, Kwanza articles of From USD 1 million to 5 million Sul, Bengo, Uíge, Lunda Norte and incorporation. dividend transfer at the 2nd year; Lunda Sul Zone C: Huambo, Bié, Moxico, Kuando Kubango, Cunene, Namibe, Malange and Zaire To be Negotiated

23 23 Tax Incentives Economic Zones Zone A Zone B Zone C Industrial Tax 1 to 5 years 1 to 8 years 1 to 10 years Capital Investment Tax Conveyance Tax Criteria for Applying Maximum Limits Up to 3 years For the acquisition of land and real estate connected to the project Investments USD 50 million; Investments which generate 500 jobs; Up to 6 years For the acquisition of land and real estate connected to the project Up to 9 years For the acquisition of land and real estate connected to the project Investments USD 20 million; Investments which generate 500 jobs; In Zone C the subcontracts could also be eligible for tax exemption and reduction. The tax incentive is granted after the implementation of the project and at least 90% of the estimated work force being in place. The reduction in the percentage of the rate of tax may not exceed 50%.

24 24 Tax Incentives Tax incentives and benefits do not constitute a rule; They are not automatically granted, nor for an indeterminate period of time. When considering the proportion and scaling of tax and customs incentives and benefits to be granted, the criteria must take in account: a) The type and value of investment; b) The investment insertion into the country s economic development strategy; c) Perception of direct and indirect capital gains; d) Complexity of investment; e) Estimated time required for a return on capital; f) Type of technology to be utilized; g) Commitment to reinvestment of profits; h) Volume of goods or services to be produced; i) Creation of production lines.

25 25 Tax Incentives Tax incentives or tax reduction are granted after a negotiation case by case. An extraordinary tax incentive could be granted to: a) Investments declared highly relevant for strategic development; b) Investments capable of creating at least 500 jobs; c) Investment capable of contributing to a major boost in technological innovation and scientific research; d) Annual export that could exceed USD 50 million; e) Investment projects evaluated at above USD 50 million.

26 26 Thank you! Invest in the future, Invest in Angola! PowerPoint by: Maria Luísa Abrantes & Ana Karina Silva Translation by: Lynn de Albuquerque