CEDA Presentation

Role of PPPs, JV Partnerships, in fast tracking FDI attraction and growth of

exports by Botswana as well as financing and JV Partnerships

Overview

• Public Private Partnerships Defined• Public Private Partnerships – Exclusions• Attractiveness of Botswana Infrastructure• Francistown City Council Objectives• FCC PPP Pipeline Projects - Opportunities• Importance of JVs• Associated Risks of JVs• Key Players

Public Private Partnerships Defined

• Public Private Partnerships (“PPPs”) are (as defined by World Bank):– Between the public and private sectors

– Includes the provision services that fall under the responsibilities of the public sector that are provided by the private sector

– With a clear agreement on shared objectives for delivery of public infrastructure and / or public services

Low High

Extent of Private Sector Participation

Public Private Partnerships - Exclusions

• PPPs typically do not include – Service contracts or – Turnkey construction contracts

• These are deemed public procurement projects, or the privatization of utilities where there is a limited on-going role for the public sector

Risk / Reward Attractiveness of Botswana Infrastructure Sector in SSA

for DFI SSA INFRASTRUCTURE RISK REWARD RATINGS

Industry Rewards

Country Reward

Reward Industry Risks

Country Risk

Risks Infrastructure Risks R/R

Regional Ranking

Botswana 62.5 43 55.7 45 61.4 54.8 55.4 1Ghana 60 46.5 55.3 50 49.7 49.8 53.7 2South Africa 42.5 62.7 49.6 57.5 57.9 57.7 52 3Namibia 60 40.2 53.1 42.5 53.3 49 51.8 4Zambia 60 32.1 50.2 40 52.4 47.4 49.4 5Kenya 47.5 42.8 45.8 45 49.5 47.7 46.4 6Tanzania 57.5 33 48.9 25 47.5 38.5 45.8 7Mozambique 60 23 47 35 41.5 38.9 44.6 8Nigeria 35 57.8 43 35 52.6 45.6 43.7 9Cameroon 47.5 29.9 41.3 50 45.4 47.3 43.1 10Angola 55 12.8 40.2 30 51.3 42.8 41 11Uganda 42.5 25.6 36.6 32.5 52 44.2 38.9 12Cote d'Ivoire 42.5 22.4 35.5 40 42.2 41.3 37.2 13Zimbabwe 45 26.9 38.7 26 25.4 25.7 34.8 14Gabo n 32.5 29.9 31.6 27.5 48.7 40.2 34.2 15Sudan & South 10 19.2 13.2 15 23.5 20.1 15.3 16Sudan Regional Average

51.7 36.3 46.3 40.6 50.5 46.5 46.4

Francistown City Council Objectives

Vision 2022 highlights that Francistown aims to be a vibrant Investment Centre

The FCC has since formed a company that will be going into business partnerships

The FCC has created partnerships focus on Local Economic Development (LED) with the following:

Genk City in Belgium

City of Taiwan in China

Daven Port - USA

Bulawayo in Zimbabwe

FCC PPP Pipeline Projects

The city owns a number of plots that its aims to develop through LED partnerships

The City intends to consider the following business opportunities:

Downstream road development from the Tonota-Francistown road ( e.g. parking facilities-metered parking

Transport and logistics (e.g. shuttles )

Mining(explorations indicate large coal reserves around Francistown)

Green electricity production

Compacting the city to curb land shortage (PPP)

Infrastructural development to handle expected increase in flow of international freight upon completion of the Kazungula bridge.

Francistown has water advantage but limited land and the City plans to liberate growth of Francistown into the Central district

Importance of JVs

Foster accelerated growth

Access to funding

Access to new markets and new distribution networks

Greater profit potential

Increased productivity

Increased capacity

Increased risk and cost sharing

Access to greater resources

Flexibility in terms of areas covered by the JV

Associated Risks to JVs

Divergent goals between partners

Communication: objectives not clearly communicated by both partners could result in challenges to the partnership later on

Imbalance in the levels of expertise & investments

Differing cultures and management styles

Disputes

Insufficient leadership and support in the early stages of the JVs

External market factors

Changing needs / requirements in markets

Key Facilitators within the PPP Sector

• Municipal authorities• Funding partners – Commercial Banks, Development

Funding Institutions, Institutional Investors • Regulatory Authorities – Ministries, NBFIRA, Competition

Authority, BOBS

Thank you