CONCESSÃO DO TERMINAL MULTIUSO DO PORTO DE LUANDA

Novembro 2019 VERSÃO PRELIMINAR

MULTIPURPOSE TERMINAL OF THE

PORT OF LUANDA

Concession of the Seaport Infrastructure

Investment Memorandum

December 2019

Page 1 of 65

Contents

1 INTRODUCTION .............................................................................................................. 5

2 ANGOLA’S SOCIAL AND ECONOMIC ENVIRONMENT ......................................................... 6

2.1 Social and Economic Development in Angola ............................................................... 6

2.2 Private Investment Framework ................................................................................... 12

2.3 Infrastructures National Development Plan ............................................................... 15

3 SEAPORTS SECTOR ........................................................................................................ 18

3.1 Seaport Activity in Sub-Saharan Africa ........................................................................ 18

3.2 Seaport Infrastructures in Angola ............................................................................... 20

3.3 Angolan Seaport Sector in Numbers ........................................................................... 28

3.4 Regulatory Framework of the Seaport Sector in Angola ............................................ 29

4 PORT OF LUANDA ......................................................................................................... 32

4.1 General Description..................................................................................................... 32

4.2 Main seaport infrastructures ...................................................................................... 33

4.3 Operational Activity Performance of the Port of Luanda ........................................... 37

5 MULTIPURPOSE TERMINAL OF THE PORT OF LUANDA ................................................... 46

5.1 Description of the different relevant activities developed in the Terminal ................ 46

5.2 Description of the main infrastructures and equipment ............................................ 46

5.3 Description of the current labour force ...................................................................... 52

5.4 Operational Activity Performance of the Multipurpose Terminal .............................. 55

5.5 Historical Economic Indicators of SOPORTOS ............................................................. 59

5.6 SWOT Analysis ............................................................................................................. 60

6 SUMMARY OF THE TENDERING PROCEDURE .................................................................. 60

7 SUMMARY OF THE SPECIFICATIONS .............................................................................. 62

Figures

Figure 1 – Development Areas ................................................................................................................... 12 Figure 2 – National Network of Seaports and Railways ............................................................................. 17 Figure 3 – Main Seaports and Railway Corridors in Africa ......................................................................... 19 Figure 4 – National Network of Seaports and Railways ............................................................................. 20 Figure 5 – Map of the Port of Lobito and its Existing Terminals ................................................................. 23 Figure 6 – Map of the Port of Cabinda ....................................................................................................... 24 Figure 7 – Layout of the First Stage of the Future Port of Caio .................................................................. 25 Figure 8 – Layout of the Second Stage of the Future Port of Caio ............................................................. 25 Figure 9 – Map of the Port of Namibe and Existing Terminals ................................................................... 26 Figure 10 – Map of the Port of Luanda and Terminals ............................................................................... 32 Figure 11 – Map of the Multipurpose Terminal ......................................................................................... 47 Figure 12 – LIEBHERR cranes and Pier Area ............................................................................................... 48

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Tables

Table 1 – Real GDP Growth Rates for Angola (2017-2020) .......................................................................... 9 Table 2 – Economic Indicators for Angola (2017-2020) ............................................................................... 9 Table 3 – Procedural Regimes for Private Investment Approval ................................................................ 13 Table 4 – Tax Incentives ............................................................................................................................. 13 Table 5 – List of Logistics Platforms planned for Angola ............................................................................ 16 Table 6 – List of Africa’s Largest Seaport Operators................................................................................... 19 Table 7 – Terminals and Concessionaires of the Port of Luanda ................................................................ 33 Table 8 – List of Existing Equipment in the General Cargo Terminal .......................................................... 34 Table 9 – List of Existing Equipment in the Multipurpose Terminal ........................................................... 34 Table 10 – List of Existing Equipment of the Container Terminal .............................................................. 35 Table 11 – Vessel traffic in the Port of Luanda (number of ships) ............................................................. 37 Table 12 – Traffic of Long-haul Vessels by Navigation Agency ................................................................... 38 Table 13 – Traffic of Long-haul Ships by Navigation Agency (1st Semester 2018 vs. 1st Semester 2019) ... 39 Table 14 – Cargo Volume Handled by Type of Goods (2016- 1st Semester 2019) ..................................... 41 Table 15 – Cargo Volume Handled by Type of Goods (1 Semester 2018 vs. 1 Semester 2019) ................. 42 Table 16 – Cargo Volume Handled by Terminal (2016 – 1 Semester 2019) ............................................... 42 Table 17 – Cargo Volume Handled by Terminal (1 Semester 2018 vs. 1 Semester 2019) .......................... 42 Table 18 – Container Traffic by Terminal and type of Container ............................................................... 45 Table 19 – List of existing Mobile Cranes in the Terminal .......................................................................... 49 Table 20 – List of existing Handling Equipment in the Terminal ................................................................ 49 Table 21 – List of existing Light Vehicles in the Terminal ........................................................................... 50 Table 22 – List of IT Equipment .................................................................................................................. 51 Table 23 – Vessel Traffic Performance in the Multipurpose Terminal ....................................................... 55 Table 24 – SWOT analysis of the Multipurpose Terminal .......................................................................... 60 Table 25 – Summary Table of the Tender Procedure ................................................................................. 61 Table 26 – Summary of the Specifications ................................................................................................. 62

Graphics

Graph 1 – Oil & Gas Production and Real GDP Growth ................................................................................ 6 Graph 2 – Evolution of BNA Rate.................................................................................................................. 7 Graph 3 – Real GDP Growth (Oil and Non-oil Sectors) ................................................................................. 8 Graph 4 – Primary Balance and Fiscal Balance (% of GDP) ......................................................................... 10 Graph 5 – Largest Seaports in Sub-Saharan Africa in 2017, thousand TEUs handled ................................ 18 Graph 6 – Average Stay (days) for Ships in selected African Seaports, 2017 ............................................. 22 Graph 7 – Cargo Volumes Handled in the Ports of Angola between 2012 and September 2019 .............. 28 Graph 8 – Vessel Traffic per Terminal (number of ships) ........................................................................... 37 Graph 9 – Vessel Traffic in the Port of Luanda by Navigation Agency (2016 – 1st Semester 2019) .......... 40 Graph 10 – Passenger Traffic in the Port of Luanda (2016 – 1st Semester 2019) ...................................... 41 Graph 11 – Container Traffic in units (2012 – 1st Semester 2019) ............................................................ 43 Graph 12 – Container Traffic in TEUs ......................................................................................................... 43 Graph 13 – Container Traffic in TEUs by Terminal ..................................................................................... 44 Graph 14 – Container Traffic in TEUs by Terminal (1st Sem. 2018 vs 1st Sem. 2019) .................................. 44 Graph 15 – Age and Gender Distribution of the Labour Force ................................................................... 52 Graph 16 – Literacy of the Labour Force .................................................................................................... 53 Graph 17 – Labour Force by Department ................................................................................................... 53 Graph 18 – Minimum and Maximum Monthly Salary, Base and Total, in Kwanzas ................................... 54 Graph 19 – Performance of Containers Handled in TEUs (2012 – 1st Semester 2019) ............................. 56 Graph 20 – Relative Performance of Unloading and Loading Operations in handling of Full Containers, in

% (2012 – 1st Semester 2019) .................................................................................................................... 56

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Graph 21 – Relative Performance of Unloading and Loading Operations in handling of Empty Containers,

in % (2012 – 1st Semester 2019) ................................................................................................................ 57 Graph 22 – Relative Performance of the Transhipment Operations in Cargo handling, in % (2012 – 1st

Semester 2019) .......................................................................................................................................... 57 Graph 23 – Performance of the Handling of Non-container Cargo in the Multipurpose Terminal (2012 –

1st Semester 2019) ..................................................................................................................................... 58 Graph 24 –Operating Revenue performance of SOPORTOS between 2013 and 2018 .............................. 59

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Important Note

This Investment Memorandum is an integral part of the Public Tender documents for the public

service concession of the management and operation of Luanda’s Port Multipurpose Terminal

(“Concession”), comprising the rights to use and operate the seaport public domain property of

the Empresa Portuária de Luanda (EPL), in a Landlord Port management regime.

This Memorandum was prepared with the aim of supplying Bidders with information to facilitate

the analysis of the Concession object and elaborate proposals (“Proposals”) to present in the

tender procedure framework. Despite its availability being integrated and subject to the

Concession tender procedure, this Memorandum is purely informative and non-binding.

The entities and/or individuals to whom this document is made available will be responsible for

the analysis, interpretation and utilization of the information herein, for the preparation of

Proposals that should be elaborated under their full responsibility, in accordance with the

technical, financial and legal criteria defined in the tender documents.

EPL and its related entities and/or consultants are not responsible for the accuracy of the data

that the current document is based on, nor it provides any assurance, either expressly or

implicitly, neither about the information herein, nor about the information in which it is based,

neither about the fact that this information remains unchanged after the delivery of the present

Investment Memorandum.

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1 INTRODUCTION

The Government of Angola launched an International Public Tender for the concession and

operation of the Multipurpose Terminal of the Port of Luanda (“Concession”) with the aim of

promoting the development and improvement of the efficiency of the seaport activity, through

the involvement of private operators with proven experience in the sector.

The tender procedure was launched on 16 December 2019 with the delivery of proposals to be

made until 30 March 2020. After the evaluation of proposals, one or more applicants will be

selected for the negotiation phase in order to award the Concession.

Angola is currently the 7th largest African economy and the 4th in Sub-Saharan Africa. Rich in

natural resources (oil and minerals), Angola provides significant development potential in terms

of agriculture, manufacturing and tourism. With a GDP per capita that is twice the average of

Sub-Saharan Africa, and a population of about 30 million, the Government of Angola has

implemented measures aimed at reducing inflation, promoting fiscal balance, developing

exports and replacing imports, as well as promoting private investment and a gradual

stabilization of the foreign exchange market.

In the seaport sector, the Port of Luanda is the largest seaport in the country in terms of cargo

movements, working in a Landlord Port regime with five concessioned terminals: four in public

service regime and one in private regime dedicated to supporting the oil industry. The Port of

Luanda is located in the natural bay of the city of Luanda, the country’s capital, providing

excellent navigation and operating conditions for sea transport vessels. In terms of regional

location, the Port of Luanda is located in the middle of the west coast of the African Continent,

making its seaport infrastructures a mandatory stop for the sea transport routes in the west of

the African Continent.

The Multipurpose Terminal of Luanda (“MT”) works simultaneously in the manoeuvre of general

and container cargo, covering an embankment area of 229,100 square meters, a dock of 610

meters, with an average depth of (-12.5 m) ZH. The terminal has one access to the sea, one

access to land that connects through a seaport hinterland and one access that connects to other

terminals.

In 2018, the MT handled nearly 312,000 TEUs (58% full and 42% empty) with average daily

terminal arrivals of 1.5 ships and an average staying time (loading/unloading) for the container

ships between 1 and 1.8 days. The MT’s container park has a maximum storage capacity of

15,000 TEUs simultaneously, allowing the stacking of fully loaded containers up to five levels.

Under the tender documents, the MT will have 725 workers that will be transfer to the future

concessionaire.

The MT has seven mobile seaport cranes of the German brand LIEBHERR, all of them fully

operational. Additionally, there are two more mobile seaport cranes of the brand Gottwald that

are currently inoperative.

The tender process for the concession of the MT represents an unique opportunity for

experienced private operators and investors to enter a key sector of one of Africa’s most

important economies, undertaking an operation with proven track-record (infrastructure,

equipment, personnel and reference client portfolio) and with an attractive outlook in terms of

return on investment.

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2 ANGOLA’S SOCIAL AND ECONOMIC ENVIRONMENT

2.1 Social and Economic Development in Angola

Angola was one of the world’s fastest growing economies during the years 2002-12, a period

that marked the end of decades of civil war in the country and led to the signing of peace

agreements in the province of Luena in 2002.

The country recorded an average annual real GDP growth rate of about 11% during this period,

supported by a stable political and social environment and largely boosted by the increase in oil

production.

The Angolan economy also benefitted from the Government’s efforts to (1) rebuild the country

and rehabilitate its infrastructures, (2) gradually open to private investment and (3) implement

policies to promote and increase production capacity.

According to data from the International Monetary Fund (IMF), the country’s GDP per capita

stood at around 7,000 USD at the end of 2012, nearly twice the average in Sub-Saharan Africa.

However, since 2016, Angola has faced a more adverse economic environment, in line with what

happened in other countries in the region such as Nigeria and South Africa.

Similarly to the oil crisis of 2008-09, the slowdown in economic activity in the country resulted

from the abrupt and prolonged decrease in oil prices since mid-2014 that led to significant

underinvestment in the oil and gas sector in recent years. This was eventually reflected in the

marked decline in oil production and, as a result, lower proceeds from the sector for the public

coffers.

Graph 1 – Oil & Gas Production and Real GDP Growth

Sources: INE and Ministry of Finance.

1,698

1,906

1,809

1,758

1,660

1,7351,716

1,672

1,7801,749

1,762

1,597

1,517

-5%

0%

5%

10%

15%

20%

25%

1,5

1,6

1,7

1,8

1,9

2,0

2007 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19P

Oil and Gas Production (mbpd) (LHS) Real GDP growth

Page 7 of 65

The need to secure some fiscal deficit adjustment led the Government to aggressively reduce

capex levels, which only exacerbated the downturn in activity. Indeed, public investment

remains a key source of growth of the non-oil sector, which now represents more than 65% of

the country’s GDP (vs. less than 45% a decade ago).

Economic activity in the country was also impacted by a tighter monetary policy followed by the

Banco Nacional de Angola (BNA), the central bank, in recent years. This policy aimed to contain

inflationary pressures that placed inflation at levels last seen more than a decade ago, above

41% at end-2016. It mostly reflected the impacts from the depreciation of the kwanza, the

reduction in fuel subsidies at the time and higher food prices.

Since 2014, the BNA lifted its benchmark interest rate once in 2014, five times in 2015, twice in

2016 and once in 2017 for a total increase of 925 basis points (“b.p.”). These increases placed

the BNA rate at 18%, a historical high.

Meanwhile, inflation has declined since end-2017, allowing the central bank to lower the BNA

rate by 150 b.p. in 2018 and 100 b.p. in 2019. The benchmark interest rate currently stands at

15.5%, which compares with 9.25% in mid-2014 before the oil crisis.

Graph 2 – Evolution of BNA Rate

Source: BNA.

According to data from the Instituto Nacional de Estatística (INE), real GDP contracted 2.6% in

2016, 0.1% in 2017 and 1.2% in 2018. Angola is expected to record its fourth consecutive year

of economic recession in 2019 as lackluster growth in the non-oil sector has been insufficient to

offset the impact from lower oil production. Current forecasts suggest a contraction of 1.1% in

economic activity this year, which compares with a lower decline expected by the IMF for the

period (-0.3%).

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

Oct14 Apr15 Oct15 Apr16 Oct16 Apr17 Oct17 Apr18 Oct18 Apr19 Oct19

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Graph 3 – Real GDP Growth (Oil and Non-oil Sectors)

Sources: INE and Ministry of Finance.

However, the economic recession that has hit Angola in the last four years is expected to come

to an end in 2020.

The Budget Proposal for 2020 recently presented to Parliament includes a forecast for real GDP

growth of 1.8%. This projection is based on a recovery in the oil sector (1.5%), after a very weak

performance recorded in recent years, and a slight acceleration in activity in the non-oil sector

(1.9% versus 0.6% expected in 2019).

The Budget Proposal also assumes a recovery of 3.4% in oil production to 1.4 million barrels per

day thanks, in part, to the stabilization in production in Total’s project in Kaombo Sul and an

average oil price of 50 USD per barrel. This is the same price projection included in the Revised

Budget for 2019, which, according to the performance recorded throughout the year, proved to

be somewhat conservative. In terms of the non-oil sector, the Government expects a more

pronounced improvement in the agriculture, fishing and retail sectors.

-5.2%

8.5%

-0.9%

-2.5%

11,1%

-2.7%

-5,3%

-9.5%

-5.2%

10.0%8.6% 8.7% 9.2%

-4.4%

-2.5%

1.2% 1.0% 0.6%

2011 2012 2013 2014 2015 2016 2017 2018 2019F

Oil & Gas Sector Non-oil Sector

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Table 1 – Real GDP Growth Rates for Angola (2017-2020)

Economic Activity

2017 2018 20191 20202

Real GDP Growth -0.1% -1.2% -1.1% 1.8% - Oil & Gas -5.3% -9.5% -5.2% 1.5%

Oil -5.2% -9.7% -6.1% 3.4% Gas 461.4% -5.3% 7.8% -21.8%

- Non-oil 1.2% 1.0% 0.6% 1.9% Agriculture 1.4% -2.0% 1.8% 3.1% Fishing -1.1% -17.1% -0.2% 4.0% Extractive Industry -0.8% -6.3% 17.9% 6.6% Manufacturing Industry 1.2% 4.6% 3.6% 1.2% Construction 2.5% 0.4% 3.5% 1.3% Energy -1.7% 22.3% 10.7% 0.5% Retail 1.5% -0.2% 0.5% 1.2% Others 0.3% 1.2% -3.1% 1.5%

(1) Revised Budget (2) Forecast; (3) Budget Proposal.

Source: Angolan Authorities.

The Government also anticipates inflation to increase to 25% in 2020 largely due to a gradual

adjustment in fuel prices. This projection is against the aim of inflation not increasing after the

year 2018 and for the increase in prices to gradually decline towards single figures until end-

2022. This forecast also compares with 17.7% expected in 2019 and is slightly above the 17.5%

initially foreseen. This results from adjustments made by the Government in electricity tariffs in

2019.

Table 2 – Economic Indicators for Angola (2017-2020)

Economic Indicators

2017 2018 20191 20192 20203

Inflation 23.7% 18.6% 17.5% 17.7% 25.0% Diamond Production (Thousand Carats) 8.964,1 8.096.5 9.547.3 9.547.3 10.175.0 Diamond Average Price (US$/Carat) 115.1 144.1 154.4 154.4 162.1 Annual Oil and LNG Production 643.2 583.0 571.7 553.6 560.9

Oil Production (MBbl) 597.6 539.8 523.7 507.1 524.5 LNG Production (MBOE) 45.6 43.2 48.0 46.5 36.4

Daily Oil Production (Million bpd) 1,637 1.479 1.435 1.389 1.437 Average Oil Price (US$/Bbl) 53.9 70.6 55.0 63.2 55.0 Average LNG Price (US$/BOE) 29.0 48.7 29.0 48.7 50.9

(1) Revised Budget; (2) Forecast; (3) Budget Proposal.

Source: Angolan Authorities.

In particular, the Budget Proposal for 2020 amounts to AKZ 15,971 billion, representing an

increase of 53.5% when compared with the 2019 Revised Budget figure of AKZ 10,407 billion. It

also foresees a fiscal surplus of 1.2% and a primary surplus of 7.1% of GDP. If confirmed, this

would mean that the country’s public accounts would reach a surplus for the third consecutive

year in 2020.

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Graph 4 – Primary Balance and Fiscal Balance (% of GDP)

(1) Revised Budget; (2) Budget Proposal. Source: Ministry of Finance.

The Budget Proposal for 2020 envisages gross financing needs of AKZ 7,879 billion (18.7% of

GDP) e net financing needs of AKZ 653 billion (1.6% of GDP). This represents an increase of 78.2%

in gross financing needs when compared with the Budget for 2019. This increase is due the

higher debt service in the period, which amounts to AKZ 9,699 billion (23% of GDP) when

compared with the Revised Budget figure of AKZ 5,333 billion (14.4% of GDP).

The Government is going to continue to allocate a significant part of expenditures to the social

sector (16% of total), mainly towards spending on education and healthcare as well as spending

related to defense, security and social order (7.6% of the total). Expenditures with the social

sector are expected to see an increase of 27.6% relatively to the forecast for 2019 while spending

on defense, security and social order are anticipated to increase 21.2%.

Meanwhile, the long-term growth outlook of the country will depend on the implementation of

structural reforms. These reforms will be very relevant in order to correct the imbalances that

still exist, namely reducing the persistently high dependency from the oil sector, and also

improve the business environment to attract more foreign direct investment to the country.

It is worth noting the new Private Investment Law introduced in June 2018 that establishes the

guidelines for private investment. This law is applicable to all investments in the country and,

contrary to the prior legislation, it does not include any minimum required amount or demand

for a local partner. Incentives will be granted depending on the sectors that the investment is

made (namely those sectors that contribute to import substitution, increase in exports and

economic diversification) and its location.

The Government also launched in 2019 a Privatization Program (PROPRIV) that aims to restart

activity in the private sector and reform public finances. In particular, the Government plans to

privatize 195 entities/assets in the next four years (2019-22) through the stock market or

competitive tenders. The aims of the PROPRIV include (1) promoting macroeconomic stability,

(2) improving the productivity of the local economy and (3) distributing in a more equitable

manner the income of the country.

7.6%

1.1%

-5.4%

-1.3% -1.7%

-3.0%

6.5%

5.2%

7.1%6.7%

0.3%

-6.6%

-3.3%

-4.5%

-6.3%

2.0%

0,0%

1.2%

2012 2013 2014 2015 2016 2017 2018 2019 (1) 2020 (2)

Primary Fiscal Balance Overall Fiscal Balance

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Moreover, BNA introduced in 2019 some key legislation aimed at increasing the amount of

credit granted to investment projects that contribute directly and indirectly to the national

production and, as a result, reduce the large import dependency. First, the central bank

announced that the banks operating in Angola will have to grant credit specifically for these

types of projects in an amount equivalent to 2% of their total assets (at the end of the previous

year) at a total cost (interest plus commissions) no greater than 7.5%. In addition, the Credit

Support Programme (PAC) for the period 2019-22 aims to make it easier to grant credit to the

companies operating in the production and commercialization of 54 essential goods for the

Angolan population. These goods are defined in the PRODESI program that aims to replace

imports with local production and diversify exports.

In sum, after the slight recovery expected in 2020, Angola’s real GDP growth could accelerate to

a level more in line with population growth while inflation could slow to single-digits in the next

few years. The evolution of economic activity will depend on the improvement in crude

production and a faster expansion in the non-oil sector.

Economic diversification remains a key priority for the Government in its strategic objective to

gradually replace imports with local production. Activity sectors like construction and public

works, financial services (banking and insurance) and other services (telecoms, hotels, retail and

distribution) as well as food and manufacturing, saw a rapid expansion some years ago and are

expected to return as key drivers for national growth.

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2.2 Private Investment Framework

The new Private Investment Law (“PIL”) was approved in June 2018 under Law n: 10/18. The

new PIL sets the guidelines for private investment and is applicable to all investments done in

Angola, either foreign or private, without any requirements in terms of minimum invested

amount or local partnership.

The new PIL is not applicable to sectors where the regulatory investment framework is governed

by a specific statutes (e.g., oil & gas, mineral exploration).

The granting of incentives depends on the activity sector in which the investment is made (i.e.,

sectors that lead to import substitution, increase in exports and economic diversification) and

the Development Areas in which it is located.

According to Presidential Decree n: 81/18, of 19 March 2018, the Agência de Investimento

Privado e Promoção das Exportações (Agency for Private Investment and Export Promotion) –

AIPEX was created, having the power to, among other things, approve private investment

projects.

The PIL sets several priority sectors, namely:

Education, Technical and Professional Training, Scientific Research and Innovation;

Agriculture, Food and Agro-Industry;

Specialized Health Units and Services;

Reforestation, Industrial Transformation of Forestry Resources and Forestry;

Textiles, Clothing and Footwear;

Hotels, Tourism and Leisure;

Construction, Public Works, Telecommunications and Information Technology, Seaport

and Railway infrastructures;

Electricity Production and Distribution;

Basic Sanitation, Solid Waste Collection and Treatment.

The PIL sets several development areas that are eligible for different tax incentives:

Figure 1 – Development Areas

Source: Law n:10/18.

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The investment projects are subject to two different procedure regimes for approval:

Table 3 – Procedural Regimes for Private Investment Approval

Source: Law n:10/18.

Investors can choose any of the investment regimes, although the Special Regime is limited to

investment projects in priority sectors.

Presidential Decree 250/18 sets up the regulation for the PIL, namely the procedures to access

each one of the two regimes.

The existing tax incentives for each regime cover several tax categories, also distinguishing

according to geographic zone where the investment project is expected to be undertaken:

Table 4 – Tax Incentives

Subject to the presentation of proof that the investment was undertaken, the new PIL ensures

that overseas investors have the right to repatriate:

Dividends and distributed profits;

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Proceeds from investment settlements and due compensations;

Royalties and other remunerations related with usage rights.

Foreign investment is also subject to the following rules:

Shareholders’ loans are limited to 30% of the total amount of the investment made by

the incorporated company and can only be reimbursed after three years

The sum of supplementary capital, shareholders’ loans, debt (e.g. bank loans and

DFI/ECA financing) and other forms of “indirect investment” are limited to 50% of the

total amount of the investment

Specific benefits for special purpose investment vehicles are also foreseen and they include,

amongst others:

Regular assistance in resolving problems which may arise with public authorities during

the implementation phase of the projects, regarding granting of visas and other

required documentation for the implementation of the private investments (namely,

construction and commercial licenses, environmental licenses and authorization's,

utilities supply, etc.);

Exemption from payment of fees and administrative costs due by any requested service

(including customs) provided by a public authority which is not a public company, for a

limited period of 5 (five) years.

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2.3 Infrastructures National Development Plan

The Transport and Logistics cluster plays vital importance in the future economic and social

development of Angola. This cluster lays upon the intermodality of various types of transport,

significantly wagering on a rail sector that connects seaport and airport infrastructures with a

vast road network that allows the coverage of the entire country. The interconnection points

between sea, rail and road transport take place in a vast national network of logistics platforms

that facilitate the transhipment of goods between the various modes of transportation.

Air and sea transportation play fundamental roles in the north-south relations in the Angolan

territory. They are equally important on the international front where Angola intends to have a

relevant role in the primary objective of reaching an “integral connectivity of infrastructures of

the African continent” set in the African Union’s Agenda 2063.

Today, the importance of having efficient logistics and transport services is widely recognized as

these allow the expansion of domestic and international trade, the diversification of exports and

imports and the capture of foreign investment. This will ultimately lead to faster growth as well

as greater economic and social development for a country. As a result, the new logistics

paradigm started to be focused on the end consumer, based on the construction of

interoperable and interconnected transportation networks that go beyond national borders and

allow the circulation of goods more efficiently and at lower costs.

In the African continent and, in particular, in Angola where the primary objectives continue to

be focused on combating hunger and poverty as well as ensuring food self-sufficiency, it is

important to proceed towards the ordering of logistical services and the transportation of goods

bearing in mind of the following:

1. Define the transport infrastructure network already existing and the one that is to

be projected bearing in mind the future network for the circulation of goods that

ensures the permanent nationwide supply. This would allow meeting the basic food

needs and improving economic activity in all of the 164 existing municipalities;

2. Ensure the different types and utilizations of the transportation network (sea, rail,

road and air) as strategic vectors for the future System for the Transportation of

Goods;

3. Encourage the partnership between public and private entities in order to promote

and manage new logistics spaces. This would be done by attracting investments

from well-known logistics operators that would promote Angola as a distributor of

goods in the domestic, SADC and world markets.

It is against this backdrop that the Angolan government set the following strategic objectives in

the transport sector for the period 2018-22:

Improve the service and comfort levels of the country’s airports in accordance with the

rules set by ICAO/IATA as well as expand, rehabilitate and construct new airports

(Luanda, Mbanza Congo, Cuíto-Bié, Cabinda, Lugango and Huambo);

Develop the necessary infrastructure to allow the transport and operation of other

maritime activities, promoting the construction and upgrade of seaport infrastructures

considered of priority intervention for the national development;

Develop urban, suburban and long-distance rail transportation, offering conditions that

will promote the competition between the different modes of transportation of goods;

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Endow the country with infrastructures that connect and promote the large axis and

national corridors through the National Network of Logistics Platforms.

Table 5 – List of Logistics Platforms planned for Angola

Platform Location Province Label

Logistics Platform of Soyo Zaire 1

Logistics Platform of Cabinda Cabinda 2

Logistics Platform of Huambo Huambo 3

Logistics Platform of Cuíto Bié 4

Logistics Platform of Lobito Benguela 5

Logistics Platform of Luanda Luanda 6

Logistics Platform of Luau Moxico 7

Logistics Platform of Lubango Huíla 8

Logistics Platform of Matala Huíla 9

Logistics Platform of Lucapa Lunda Norte 10

Logistics Platform of Luena Moxico 11

Logistics Platform of Mbanza Congo Zaire 12

Logistics Platform of Malange Malange 13

Logistics Platform of Menongue Cuando Cubango 14

Logistics Platform of Namibe Namibe 15

Logistics Platform of N´Dalatando Cuanza Norte 16

Logistics Platform of Sudeste Cuando Cubango 17

Logistics Platform of Ondjiva Cunene 18

Logistics Platform of Saurimo Lunda Sul 19

Logistics Platform of Benguela Benguela 20

Logistics Platform of Uíge Uíge 21

Source: National Director Plan for the Transport Sector, MINTRANS.

Page 17 of 65

Figure 2 – National Network of Seaports and Railways

Source: National Director Plan for the Transport Sector, MINTRANS.

The Angolan Government believes that the involvement of the private sector is essential for the

execution of the announced targets for the Transport Sector. The Government is focused on

attracting strategic investors with high financial capabilities and international experience in the

exploration and operation of large-sized transport infrastructures capable of generating value

for the national economies.

Page 18 of 65

3 SEAPORTS SECTOR

3.1 Seaport Activity in Sub-Saharan Africa

Countries in Sub-Saharan Africa (“SSA”) face considerable challenges in the development of their

seaports infrastructures. Africa has been a region that has mainly exported raw materials and

commodities such as oil, non-precious metals, rare minerals, cocoa, fruit and wood. The export

of these goods has been mainly done by sea transport due to the long-distance from the centres

where they are consumed.

As a result, seaport infrastructures play a very relevant part in the supply chains of the SSA

region. Indeed, the size of the region, coupled with the fact that a lot of countries are not

accessible by sea, means that a significant number of seaports have hinterlands, making them

critical for the economic development of the region.

Seaport activity in SSA faces challenges and restrictions that limit its normal functioning and the

economic contribution that it could generate, namely:

• Reduced efficiency in terms of stowage and storage;

• Public control of the companies/seaport management companies limits the

financing capabilities to upgrade/renovate infrastructures;

• Lower cargo volumes compared with other regions of the world;

• Deficiencies or absence of connectivity with other modes of transportation;

• Transport logistics hampered by the current state of road networks and large

distances;

• Need for greater development of road/rail corridors connecting seaports to

hinterlands to ease the transport of goods to other regions.

In terms of capacity, there are currently 10 seaports in SSA that handle volumes larger than

500,000 TEUs annually. The seaport of Durban is undoubtedly the one that handles the largest

volumes, exceeding 2.5 million TEUs per year. The other nine seaports, including Luanda, handle

between 500,000 and one million TEUs annually. It is worth noting that only a few seaports in

SSA are able to operate vessels of the Post-Panamax and Super Panamax categories.

Graph 5 – Largest Seaports in Sub-Saharan Africa in 2017, thousand TEUs handled

Source: Report “Strengthening Africa’s Gateways to Trade” from PwC, April 2018.

Information gathered according to the last information available from seaport authorities.

Another trend recently witnessed relates to the increased trade between China and countries

in SSA. China has been an important importer of commodities (oil, minerals and wood, among

710 690900

621940 860

2 600

520

1 030 910

Page 19 of 65

others) produced in Africa. On the other hand, China has exported manufactured goods to Africa

and has granted credit lines associated with the export of goods and services from China. These

trade transactions have contributed to the development of sea transportation and seaport

infrastructures in Africa.

Angola is the fourth largest economy in SSA, providing significant exporting potential that is yet

to be fully exploited. By other hand, due to its location, Angola could offer an entry point for

international transport to the southern region of the Democratic Republic of Congo (DRC),

Zambia and Botswana, as these countries do not have direct access to the sea.

Figure 3 – Main Seaports and Railway Corridors in Africa

Source: Report “Strengthening Africa’s Gateways to Trade” from PwC, April 2018.

It is against this backdrop that the IFC (from the World Bank group) recently recommended in a

diagnostic study about Angola’s private sector that private initiative should play a bigger role in

the country’s transport sector. In particular, the IFC suggested that the private sector should

have a more relevant presence in those areas that provide greater potential such as sea and air

transport, as these are the most important entry points to the country.

Indeed, there are already several international seaport operators in Africa, with APM Terminals

having a presence in Angola through the operations in the container terminal in the Port of

Luanda and another in the Port of Namibe (both through Sogester):

Table 6 – List of Africa’s Largest Seaport Operators

Operators Seaport Terminals under operation

APM Terminals 13 container terminal concessions: Angola (2), Benin (1), Cameroon (1), DR Congo (1), Egypt (1), Congo (1), Guinea (1), Ivory Coast (1), Liberia (1), Morocco (1) and Nigeria (2)

Page 20 of 65

Operators Seaport Terminals under operation

Bolloré 12 container terminal concessions: Ivory Coast (1), Cameroon (2), Ghana (1), Nigeria (1), Gabon (1), Congo (1), Benin (1), Sierra Leoe (1) , Togo (1), Guinea (1) and Comoros Islands (1)

Transnet Owner and operator of 16 terminals in 7 South African seaports

DP World 7 seaport concessions in Egypt (1), Djibouti (1), Argel (2), Somalia (1), Mozambique (1) and Senegal (1)

1 concession in the Rwanda logistics centre

ICTS 2 seaport concessions in Congo and Madagascar

Hutchinson Ports 3 seaport concessions in Egypt (2) and Tanzania (1)

COSCO 1 seaport concession in Egypt (20% of the container terminal in the Suez Channel, controlled by APM)

China Merchants Group 1 seaport concession in Togo

Source: Public Information.

3.2 Seaport Infrastructures in Angola

The National Network of Seaports in Angola is currently made of five seaports strategically

located from north to south along the Atlantic coast of the country.

Figure 4 – National Network of Seaports and Railways

Source: National Development Plan of Angola (“PND 18-22”)

The current seaports in Angola include: (1) Port of Luanda; (2) Port of Cabinda; (3) Port of Lobito;

(4) Port of Soyo; and (5) Port of Namibe.

Page 21 of 65

The country’s National Development Plan 2018-22 (“PND 18-22”) envisages the construction of

three additional seaports, namely the Port of Caio in Cabinda (6) (intended as a container

terminal), the Port of Barra do Dande (7) in Bengo and the Port in Porto Amboim (8).

The Port of Luanda is the seaport that records the largest cargo turnover yearly, as it serves the

most populated city and province of the country, Luanda. The second seaport is Port of Lobito,

which supplies Angola’s Planalto Central region along the Benguela railway.

The Port of Luanda has railway connection to the city of Malange, located inland of the country

at more than 380km from the capital. The PND 18-22 envisages the extension of the railway to

the city of Saurimo and the construction of a railway branch to the border city of Dundo, which

will allow the creation of another transport corridor to the DRC.

The Port of Lobito is nowadays the only seaport that has a railway connection with a border

country to Angola, namely the DRC, therefore offering potential to handle imports and exports

of goods and raw materials from the southern region of this neighbouring country. The PND 18-

22 includes plans to build a railway section that will also allow the connection to the actual

railway infrastructure (CFB) to Zambia.

The EN-100 is the road axis that crosses the length of Angola from north to south along the coast

line and provides access to all the major seaports of the country (Luanda, Lobito, Namibe, Soyo

and Cabinda).

3.2.1. Port of Luanda

The Port of Luanda is located in the bay of the city of Luanda, offering excellent navigability

conditions and for operating sea transport vessels. On the regional front, its location in the

middle of the west coast of the African continent makes the infrastructures of the Port of Luanda

a mandatory stop in the sea routes to the west of the continent.

The port is managed by Empresa Portuária de Luanda, E.P., a public company responsible for

granting concessions to operate the various existing cargo and passenger terminals. Currently,

it is the largest seaport infrastructure in the country, as it is responsible for more than 80% of

the turnover of the cargo transported by sea in the Angolan territory.

The government is considering reforming the Port of Luanda (where most of Angola’s trade

takes place) considering that:

• Stowage activities could be handled by private operators instead of public

companies in order to achieve productivity gains;

• A new master plan will be developed for the Port of Luanda with the aim of giving

more efficient use of the stowage activities and available storage space in order to

reinforce the overall cargo handling capabilities of the seaport infrastructure.

A diagnostic study about Angola’s private sector elaborated by the IFC shows that the average

number of days that a ship stays in Luanda (12) remains high comparing to best international

standards. However, it is in line with other seaports in Africa such as Dakar (13 days), Abidjan

(11 days) or Lome (9 days).

Page 22 of 65

Graph 6 – Average Stay (days) for Ships in selected African Seaports, 2017

Source: IFC diagnostic study on Angola’s private sector.

However, sea freight to Angola is significantly more expensive than to other seaports. For

instance, the sea freight from Le Havre (in northern France) to Abidjan or Dakar is half of the

amount that it is to Angola while for Lagos it is two-thirds of the amount. This is due to several

reasons, such as: (1) lower competition of alternative corridors (Lagos, for instance, competes

with Cotonou), (2) the local costs in Angola are higher, (3) the lower productivity of the stowage,

(4) the informal trade agreements among shipping lines and (5) own country risk.

As a result, there is great potential for improvement in terms of cost efficiency considering that

a significant number of the reasons aforementioned could be resolved with decisions taken by

the Angolan authorities and the involvement/investment of the private sector. These includes

measures to tackle (1) bottlenecks at the seaport, (2) decrease required time for cargo

unloading, provide solutions for the (3) lack of trucks to transport the cargo, (4) road and railway

traffic inland that lead to part of the port of Luanda being used as storage area and, as a result,

requiring the need to resort to dry ports in order to solve these bottlenecks (namely, in handling

empty containers).

Chapter 4 presents a more detailed description of the Port of Luanda.

3.2.2. Port of Lobito

The Port of Lobito is a deep-water seaport with five different types of terminals:

• General Cargo Terminal – not concessioned;

• Refrigerated Containers Terminal – not concessioned;

• Containers in Dry Port Terminal – not concessioned;

• Mining Terminal – not concessioned;

• Support Terminal.

1213

119

Luanda Dakar Abidjan Lomé

Page 23 of 65

Figure 5 – Map of the Port of Lobito and its Existing Terminals

Among the existing equipment in the Port of Lobito, the following standout:

• 25 lifting cranes with capacity from up 3 to 22 tons;

• One moving crane and 1 lifting crane;

• 44 forklifts;

• Six seaport trucks;

• Other equipment for general cargo handling.

The mining terminal has a railway connection to the Benguela railway linking Lobito to the

mining regions of the DRC and Zambia.

3.2.3. Port of Cabinda

The Port of Cabinda is located 400km north of Luanda, 220km southwest of Matadi and 200km north of the city of Ponta Negra. It has a population of more than 15 million. The seaport was built back in 1953 while in 1962 it was upgraded to the commercial seaport category. The main cargo handled in the Port of Cabinda after 1953 includes wood, coconut, coffee and minerals. The port also have a passenger terminal. The Port of Cabinda includes the following infrastructures and equipment:

• Two storage facilities of 1,000 squared-meters; • Storage area of 24,357 squared-meters with capacity of 8,000 TEUs, with reinforced

concrete (5,170 squared-meters) and cement (19,187 squared-meters) pavements; • New pier bridge: dock with 110 meters length, 32 meters wide and 5 meters high;

total length of 319 meters (fixed and mobile bridge); pneumatic rubber defenses; gross/net tonnage of 5,017/1,500 tons, dynamic strength capacity of 4,800 tons; 8 bollards, 4 bow anchors of 28 tons, 2 lateral edge anchors of 14 tons and 2 tail anchors of 28 tons;

• Sea access: 2,400 meters long, 80 meters wide and 7.5 meters ZH deep.

Page 24 of 65

Figure 6 – Map of the Port of Cabinda

The Port of Cabinda welcomed 388 vessels (long-haul, coasting and oil tankers) during 2018,

processing 17,552 containers and 256 thousand tons of cargo.

In 2012, Caioporto SA was founded as a specific vehicle for the development and construction

of the new Port of Caio, with an estimated investment amounting to US$ 800 million. The

company was awarded the financing, planning, projecting, building and management of the port

of Caio under the terms and conditions of the concession agreement signed between a private

entity and the Angola’s Ministry of Transports. Caioporto SA is currently held by the country’s

Sovereign Wealth Fund (Fundo Soberano de Angola).

The project is being developed in two stages, with the first stage of the Port of Caio (located 8

km from the Port of Cabinda) expected to be ready in 2020 in an area of 150 hectares with the

following characteristics:

Page 25 of 65

Figure 7 – Layout of the First Stage of the Future Port of Caio

Length of the wall of the commercial seaport: 630 meters;

Bridge and access pier to the seaport terminal with 2km length;

Access channel: 180 meters high; 15.5 meters deep;

Handling capacity of 60 containers/hour per docking pier;

Docking basin: 200 meters wide; 14 meters deep.

The second stage of development of this project will require the following characteristics: • Docking pier of 1.130 meters long and 16 meters deep (docking of 4 large ships

simultaneously) with capacity to welcome some of the world’s largest ships; • Access channel: 200 meters wide; 18 meters deep.

Figure 8 – Layout of the Second Stage of the Future Port of Caio

Page 26 of 65

3.2.4. Port of Namibe

The Port of Namibe includes two terminals with the following characteristics:

• Container Terminal:

- Total area of 135 thousand square meters and 875 meters of continuous pier;

- Container storage area of 12,150 square meters;

- Electric cranes throughout the pier;

- Connection to Moçâmedes railway through the mining terminal Saco-Mar

• Mining Terminal: this infrastructure currently works as the main fuel and lubricant

terminal for Sonangol in the southern part of the country. The terminal has a pier

that is 525 meters long and 19 meters deep. It currently handles cargo consisting of

fuel and its derivatives weighing about 300 thousand tons.

Figure 9 – Map of the Port of Namibe and Existing Terminals

Page 27 of 65

This port was recently subjected to modernization works that will allow 30 to 35 movements per

hour. Its standstill capacity was increased from 1,700 to 2,700 TEUs and its refrigeration

connections from 25 to 100 power plugs. These works also included the rehabilitation of 240

meters of the pier and paving the existing container park.

Page 28 of 65

3.3 Angolan Seaport Sector in Numbers

The volume of cargo handled in the ports of Angola has been gradually decreasing since the year

2014 at an average annual rate of -13.9%.

In recent years, the volume of cargo handled in the ports of Angola reached its peak in 2014,

reaching 18,289 thousand tons, of which 71% were handled in the Port of Luanda, 16% in the

Port of Lobito, 7% in the Port of Namibe and the remaining 6% handled between the Ports of

Cabinda, Soyo and Amboim.

Graph 7 – Cargo Volumes Handled in the Ports of Angola between 2012 and September 2019

Source: Research and Strategic Planning Bureau, Ministry of Transports of Angola

In 2018, the total volume of cargo handled in Angola reached 10,042 thousand tons. Although

the drop in cargo handled was witnessed in all of the country’s seaports, the decreasing trend

was more pronounced in the largest seaport, Luanda (CAGR -14.6%) and in the smaller seaports

such as Cabinda, Soyo and Amboim (combined, CAGR -27.2%). The declines were not as

significant in the Port of Lobito (CAGR -10.9%) and in the Port of Namibe (CAGR -7.4%).

This performance meant that the Port of Luanda, which clearly remains as the main seaport for

entry and exit of cargo in Angola, had a lower share of the total cargo handled in the country

(69% in 2018). It also meant that the smaller seaports reached a combined total of less than 3%

of the handled cargo. On the other hand, the Ports of Lobito and Namibe, which in 2014

accounted for 23% of the total goods handled in the ports of Angola, were responsible for 28%

of the total goods handled by Angolan seaports.

Between January and September 2019, 7,311 thousand tons were handled in the ports of

Angola, with 71% handled in the Port of Luanda.

54% 56%

71%

65%67%

71% 69,3%71%

24%23%

16%

16%

16%

16% 18%

19%

12%

13%

7%

11%

9%

8% 10%

8%

3%3%

2%

3%

3%

3%3%

2%

5%

4%3%

2%

2%1%

2%2%

1%

3%

3%

2%

11,638

13,078

18,289

11,852

9,36610,717

10,042

7,311

2012 2013 2014 2015 2016 2017 2018 Jan. - Sept.2019

Luanda Lobito Namibe Cabinda Amboim Soyo

Page 29 of 65

3.4 Regulatory Framework of the Seaport Sector in Angola

The maritime-seaport sector in Angola is governed by Law 27/12 of 28 August, denominated

“Lei da Marinha Mercante, Portos e Actividades Conexas” (“Law of Merchant Navy, Seaports and

related Activities”). This law regulates all activities developed in the maritime and seaport

jurisdiction areas, in the scope of the sectors of the merchant navy, recreational maritime

activities and nautical sports and of seaports, in connection and integrated with transports and

logistics activities.

The Instituto Marítimo e Portuário de Angola (IMPA) (or Maritime and Seaport Institute of

Angola), with its Organic Statute approved under Presidential Decree n: 328/14, 29 December,

acts as sector regulator, under the supervision of the Ministry of Transports. It exercises its

competences in the fields of merchant navy, recreational navy and nautical sports, seaports,

navigation and maritime security, economic activities in the scope of marine sectors, rivers, lakes

and seaports, as well as supervises and regulates activities developed in this sector.

It is also worth highlighting Law n: 9/98, 18 September, of the Seaport Domain, that aims to

define the framework of the seaport public domain, establishing the need to elaborate a Master

plan for Seaport Management, as well as a legal framework of the works and activities of

individuals in the areas of seaport jurisdiction.

Decree n: 53/03, of 11 July, approves, the Seaport Exploration Regulations, containing the

fundamental rules to be observed in the management/utilization of Seaports in Angola.

3.4.1 Regulatory Framework of Seaport Concessions

Under Law n: 11/13 of 3 September – Lei de Bases do Sector Empresarial Público (Basic Law for

Public Sector Enterprise), the Ports in Angola are formed of Public Enterprises governed by their

own legislation, with patrimonial, administrative and financial autonomy. Their revenues are

collected through the implementation of the Seaport Tariff Regulation (Combined Executive

Decree n: 323/08 of 16 December, complementing Combined Executive Decree n: 19/09 of 12

March) to the services provided to the clients involved in the transport and logistics chain.

In the case of Luanda, the Empresa Portuária de Luanda, E.P. (EPL), in the exercise of its

competences in the management, administration and seaport authority (Decree n: 26/98, of 14

August, that approves the Organic Statute of the EPL), acts as Licensing Entity, in the scope of

signing of seaport Concession Contracts. EPL also grants other legal and private entities the

exploration of the activity area and associated services with seaport activity, always under the

applicable legislation, namely the Lei dos Contratos Públicos (Law of Public Contracts), Law n:

9/16, of 16 June, that sets the legal regime for the elaboration and execution of those contracts,

and Decree n: 52/97, of 18 July, about the General Basis for Seaport Concessions, that defines

the general regime applicable to concessions of this nature.

3.4.2 Others

Legislation about environmental matters in the exploration of seaport infrastructures:

a) Law n.º 5/98, of 19 June –Lei de Bases do Ambiente (Environmental Law);

Page 30 of 65

b) Decree n: 51/04, of 23 July – about Environment Impact Assessment;

c) Decree n: 59/07, of 13 July – about Environment Licensing;

d) Presidential Decree n: 194/11, of 7 July – Regulations about Environmental Damage

Responsibilities;

e) Presidential Decree n: 141/12, of 21 June – Regulations to Prevent and Control Pollution

of National Waters;

f) Presidential Decree n: 190/12, of 24 August – Regulations about Waste Management;

g) Decree n: 1/10, of 13 January – about Environmental Audits;

h) Resolution n: 49/ 05, of 3 October – Stockholm Convention about Solid Organic

Pollutants;

i) Resolution n: 14/17, of 28 March – United Nations Convention about Climatic Changes

(Kyoto Protocol);

j) Resolution n: 41/01, 21 December – Membership to the International Convention for

the Prevention of Pollution by Ships (Convention MARPOL 73-78).

International Conventions about Maritime Security and Seaport Management prevailing in Angola:

a) African Charter on Maritime Transportation;

b) United Nations Convention on Sea Law;

c) International Convention of 1952 for the unification of certain rules relating to Arrest of

Sea-going Ships;

d) International Convention of 1969 on Civil Liability for Oil Pollution Damage;

e) International Convention of 1971 for the Prevention of Pollution from Ships and Protocol

of 1978 ­MARPOL­1978

f) International Convention of 1972 about Container Security, amended CSC-72;

g) International Convention of 1990 on Oil Pollution Preparedness (OPRC90);

h) International Convention of 1990 on Oil Pollution Response and Cooperation (OPRC90);

i) International Convention of 1992 on Civil Liability for Oil Pollution Damage;

j) International Convention of 1992 on the Establishment of an International Fund for

Compensation for Oil Pollution Damage ­FUND PROT 92 or FUND­92;

k) International Convention of 1996 on Liability and Compensation for Damage in

Connection with the Carriage of Hazardous and Noxious Substances by Sea;

l) International Convention of 1973 for the Prevention of Pollution from Ships (“MARPOL

73/78”);

m) International Convention to Safeguard Human Life at Sea (SOLAS­1974 and respective

protocols);

n) International Convention for the Unification of Certain Rules of Law with respect to

Collisions between Vessels;

o) International Convention on Maritime Search and Rescue - SAR­79;

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p) Convention on the International Regulations for Preventing Collisions at Sea

(COLREG­1972 and respective amendments from 1981);

q) International Convention for the Unification of Certain Rules of Law with respect to

Collisions between Vessels (1910);

r) Protocol of 1992 that amends the International Convention on Civil Liability for Oil

Pollution Damage (“CLC1969”);

s) Protocol of 1992 that amends the International Convention on the Establishment of an

International Fund for Compensation for Oil Pollution Damage (“FUNDO”);

t) Protocol of 1996 that amends the Convention on the Prevention of Marine Pollution by

Dumping of Wastes and Other Matter;

u) International Regulations of 1972 for Preventing Collisions at Sea (“COLREGS”),

amended in 1981.

Page 32 of 65

4 PORT OF LUANDA

4.1 General Description

The Port of Luanda is located in the harboured bay of Luanda under the coordinates: 8º 47’ S

latitude and 13º 14’ E longitude. The existence of Ilha do Cabo provides natural and excellent

protection against maritime tides and swells in the region, allowing the bay to have optimal

conditions to manoeuvre and dock vessels.

The port has 2,738 meters of docking pier. The maximum draft of the approach channel is 9.5

meters. The depth is bigger along the quay, varying between 10.5 meters and 12.5 meters,

except in the cabotage terminal, where the draft ranges from 3.5 meters to 5.5 meters.

The docking pier is split into 7 terminals and a logistics platform that supports the oil industry:

Figure 10 – Map of the Port of Luanda and Terminals1

The seaport infrastructures in Luanda are under the responsibility of Empresa Portuária de

Luanda E.P. (“EPL”). EPL is a public company whose mission is to plan, manage, regulate, oversee

and promote the Port of Luanda ensuring (1) the security of people and goods, (2) economic,

social and environmental sustainability and (3) seaport infrastructure services in Luanda.

The social objective of EPL includes:

International trade and cabotage services in the country;

Loading and unloading of goods and respective storage;

Ancillary service provider to the cargo and navigation operations;

1 Does not include Shipping Terminal

Page 33 of 65

Control and supervision of installed or to be installed industries within the port

area, in all that is related with the security and efficiency of port operations;

Environmental protection.

The Port of Luanda is managed under a Landlord Port regime. The EPL currently has five

concessioned Terminals, with four of them in public service regime and one in private regime

dedicated to supporting the oil industry, all of them operating 24/24 hours per day.

Table 7 – Terminals and Concessionaires of the Port of Luanda

Quay Area Concessionaire Concession

Deadline

Passenger Terminal

46.15 meters 4,090 sqm IMPA n.a.

General Cargo Terminal

(GCT)

900 meters (depth: 5.5m-10m)

80,000 sqm Multiterminais 20 years

(2005-2025)

Multivalent Terminal

(MVT)

536 meters (depth: 10m)

178,641 sqm Unicargas EP 20 years

(2005-2025)

Container Terminal (CT)

550 meters (depth: 10.5m-12.5m)

142,467 sqm Sogester SA 20 years

(2007-2027)

Multipurpose Terminal (MT)

610 meters (depth: 12.5m)

229,100 sqm Concession terminated

(Soportos SA)

Cabotage Terminal

7.80 meters (depth: 3.5m)

n.a. Inoperative Terminal

Oil & Gas Terminal

2.064 meters (depth: 12.5 m)

1,597,544 sqm

Sonangol EP 25 years

(1995-2020) Source: EPL.

4.2 Main seaport infrastructures

4.2.1 Passenger Terminal

The passenger terminal is managed by Instituto Marítimo e Portuário de Angola (Maritime and

Seaport Institute of Angola). It has an area of 4,090 sqm and three pier bridges with each having

docking capacity of two ships such as catamaran.

4.2.2 General Cargo Terminal (GCT)

The General Cargo Terminal (GCT), concessioned to Multiterminais, is intended to handle liquid

and solid bulk and cereals. It has an embankment area of 80,000 sqm and a coasting pier of 900

meters with depths that vary between (-5.50 m) ZH and (-10.50 m) ZH. A mill industry was built

inside terminal facilities.

The terminal has capacity to handle cargo in bulk or bagged from vessels that have their own

crane. It does not have its own storage facilities, except for cereals, meaning that the cargo

loading and unloading operations have to be done directly from and to the trucks.

Page 34 of 65

Table 8 – List of Existing Equipment in the General Cargo Terminal

Existing Equipment in the Terminal Qty Maximum Capacity

Mobile Crane 1 30 tons

Mobile Crane 1 40 tons

Mobile Crane 1 80 tons

Reach Stacker 4 45 tons

Gooseneck 4 60 tons

Tugmaster 8 40 tons

Forklift 11 3 to 37 tons Source: Logistics Capacity Assessment (LCA), World Food Programe.

Multiterminais is the company responsible for operating the GCT and results from a partnership

between the Angolan company Copinol and NileDutch Africa Line.

The company employs a total of 527 workers. It has one maritime access and three land

accesses.

4.2.3 Multivalent Terminal (MVT)

The Multivalent Terminal is intended to operate simultaneously general and container cargo.

The terminal has an area of 178,641 sqm of embankments and a coasting dock of 536 m. It has

depths of (- 10,00 m) ZH and the quay is adapted for stowage operations from RO-RO ships.

Table 9 – List of Existing Equipment in the Multipurpose Terminal

Existing Equipment in the Terminal Qty Maximum Capacity

Reach Stackers (Kalmar;Terex) 13 45 tons

Tugmaster 15 30 tons

Trailers 6 30 tons

Semi-Automatic Spreaders 19 20 a 40 tons

Forklift 6 30 tons

Source: Logistics Capacity Assessment (LCA), World Food Programe.

The terminal has a covered area of 10,500 sqm for storing palletized cargo and 60 electric plugs

for refrigerated containers. The outside embankment has a storage capacity up to 3,000 TEUs

(full) and also has a car park with maximum capacity of 600 units.

The average productivity of the terminal is 13 TEUs/hour.

It has one maritime access, one emergency access and one land access that connects with the

port hinterland.

Unicargas is the concessionary company of the MVT and it is a public entity that is under the

supervision of the Ministry of Transports of Angola. Besides the seaport operation, Unicargas

also provides road transport services through its own fleet.

This terminal employs a total of 325 workers.

Page 35 of 65

4.2.4 Container Terminal (CT)

The Container Terminal is intended to handle only goods that are inside containers. This terminal

is concessioned to Sogester and occupies an area of 142,467m2 of embankments and a coasting

dock of 550 meters with depths that vary between (-10,50 m) ZH and (-12,50 m) ZH.

The terminal has an average productivity of 50 containers/hour and a storage capacity of 4,620

TEUs (full) and 5,000 TEUs (empty), with 400 electric plugs for refrigerated containers.

It has one maritime access, one emergency access that connects to other terminals and two land

accesses.

Table 10 – List of Existing Equipment of the Container Terminal

Existing Equipment in the Terminal Qty Maximum Capacity

Mobile Crane 3 104 tons

Tugmaster 17 50 tons

Reach Stacker 5 45 tons

Empty Container Handler 3 n.a.

Forklift 1 n.a.

Spreaders 10 n.a.

Source: Logistics Capacity Assessment (LCA), World Food Programme

Sogester also has two second-line terminals located in Panguila and Via Expresso. The Panguila

terminal has an area of 45 hectares with 400 electric plugs for refrigerated containers. The Via

Expresso terminal has 14 hectares and 380 plugs for refrigerated containers.

Sogester is a partnership between the multinational company APM Terminals (51%) and GEFI

S.A (49%).

The terminal employs a total of 752 workers.

4.2.5 Multipurpose Terminal (MT)

The Multipurpose Terminal is intended to simultaneously operate general and container cargo.

Concessioned to Soportos until recently, it occupies an area of 229,100 m2 of embankments,

with a coasting dock of 610 m with an average depth of (-12,50 m) ZH.

The terminal has one sea access, one land access that connects with the hinterland of the port

and one access that connects to the Oil & Gas Terminal.

This terminal employs 725 workers.

More details about the Multipurpose Terminal will be provided in Chapter 5.

4.2.6 Cabotage Terminal

This terminal is intended for commercial cabotage activities, as soon as the construction and

equipment works to support its operations are concluded. The Cabotage Terminal has the

following premises:

A coastal front of 260 meters long (under construction);

An embankment of 27,650 m2;

Page 36 of 65

Premises for Piloting, Towing and Mooring services with 1,080 sqm (EPIBAL and

EPINOSUL);

A warehouse with an area of 2,250 sqm (half concessioned to Logistics).

Page 37 of 65

4.3 Operational Activity Performance of the Port of Luanda

4.3.1 Vessel Traffic in the Port of Luanda

Throughout 2018, 3,719 vessels docked in the Port of Luanda, with 555 of these being long-haul

vessels and 3,164 supply boats mostly related to the oil industry. Relatively to the previous year

of 2017, the total number of vessels docking in the Port of Luanda fell by 422 while, since 2015,

the number of vessels dropped by an average annual rate of 17%.

Table 11 – Vessel traffic in the Port of Luanda (number of ships)

Type of Vessel 2015 2016 2017 2018 1st S 2019 CAGR (15-18)

Long-haul 900 732 633 555 302 -15%

Cabotage 5,662 3,890 3,511 3,164 1,726 -18%

Total 6,562 4,622 4,144 3,719 2,028 -17% Source: EPL.

The frequency of arrivals of long-haul vessels in 2018 stood at 1.5 vessels/day, which

represented a decline of 12% relatively to the previous year.

In terms of cabotage vessels, the frequency of arrivals was 10% lower in relation to 2017, with

the number of arrivals standing at 8.7 ships/day.

The lower frequency of vessels arrivals to the terminals of the Port of Luanda was largely justified

by the slowdown in the Angolan economy and the decreasing activity in the oil sector that

followed the sharp drop in international oil prices. This led to a strong reduction in the level of

imported goods and the transport of oil and its by-products by sea.

The terminal that supports activity in the oil sector is the main responsible for the vessel traffic

in the Port of Luanda, accounting for 85% of total traffic in the port in the last four years.

Graph 8 – Vessel Traffic per Terminal (number of ships)

Source: EPL.

Excluding the terminal that supports activity in the oil sector, the terminal with the most vessel

traffic in the last two years was the Multipurpose Terminal, with 297 and 246 vessels in 2017

and 2018, respectively.

The Navigation Agencies with the highest traffic of long-haul vessels in 2018 were Niledutch with

68 vessels, Maersk with 63 vessels and Panalpina with 49 vessels. In the previous year (2017),

102 198186

5,752

306 1853106

163

3,963

316

2162 102 99

3,572

2971252 99 75

3,232

246 1530 66 52

1,758

121 1

GCT MVT CT MT Oil & GasTerminal

Cimangola

2015 2016 2017 2018 1st Sem. 2019

Page 38 of 65

Niledtuch was again the Navigation Agency with the largest traffic of long-haul vessels (134

container vessels), followed by Maersk with 82 vessels and MSC with 72 vessels.

Table 12 – Traffic of Long-haul Vessels by Navigation Agency

Agents

General Cargo

Container Vessels

Ro-Ro Vessels

Other Vessels

TOTAL

2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

All Brokerage 0 0 0 1 0 0 0 0 0 1

AMT 2 0 0 0 0 0 0 0 2 0

ANNA 14 4 2 1 0 0 0 0 16 5

Bolloré Ports 14 12 20 7 13 9 2 1 49 29

CMA CGM 0 5 64 37 0 6 0 0 64 48

GAC 8 3 0 40 2 0 1 0 11 43

GARI 0 0 0 0 0 0 0 1 0 1

GETMA Shipping 25 12 0 0 0 0 0 0 25 12

Grimaldi 0 0 0 0 31 11 0 0 31 11

Hull Blyth 12 24 0 0 4 2 0 1 16 27

Kuena + Nagel 7 4 0 0 0 10 0 0 7 14

Kremlin 1 7 0 0 0 2 0 0 1 9

Leman 0 3 0 0 0 0 1 1 1 4

Maersk 0 0 82 63 0 0 0 0 82 63

Manubito 0 0 0 2 0 0 0 10 0 12

Marine Serv 0 0 0 0 0 0 0 0 0 0

Megalog 0 0 0 0 0 0 0 0 0 0

MSC 0 0 72 31 0 0 0 0 72 31

Naiber 5 2 19 11 0 0 0 0 24 13

Niledutch 0 4 134 64 0 0 0 0 134 68

Orey 26 21 3 14 10 2 0 0 39 37

Panalpina 0 3 0 46 0 0 0 0 0 49

Prodiaman TNB 0 17 0 3 0 6 0 2 0 28

Secil Marítima 1 0 0 0 3 0 0 0 4 0

Seatrade 24 6 2 0 0 0 6 2 32 8

Senamar 4 1 0 0 0 0 0 0 4 1

Sharaf 0 11 0 0 2 6 3 3 5 20

Supermaritime 3 4 0 0 0 0 5 5 8 9

Strurrock 1 1 0 0 0 4 0 1 1 6

SNMA 0 0 0 0 0 0 1 0 1 0

TLC 4 5 0 0 0 0 0 1 4 6

Total 151 149 398 320 65 58 19 28 633 555 Source: EPL.

Page 39 of 65

Table 13 – Traffic of Long-haul Ships by Navigation Agency (1st Semester 2018 vs. 1st Semester 2019)

Agents

General Cargo

Container Vessels

Ro-Ro Vessels

Other Vessels

TOTAL

1S 18 1S 19 1S 18 1S 19 1S 18 1S 19 1S 18 1S 19 1S 18 1S 19

All Brokerage 0 0 0 0 0 0 0 0 0 0

AMT 0 0 0 0 0 0 0 0 0 0

ANNA 4 5 1 0 0 0 0 0 5 5

Bolloré Ports 6 7 7 2 9 5 0 1 22 15

CMA CGM 0 0 34 41 0 0 0 0 34 41

GAC 3 0 0 0 0 0 0 0 3 0

GARI 0 0 0 0 0 0 0 1 0 1

GETMA Shipping 12 10 0 1 0 0 0 0 12 11

Grimaldi 0 0 0 0 11 8 0 0 11 8

Hull Blyth 7 1 0 0 2 2 0 1 9 4

Kuena + Nagel 4 2 0 0 0 0 0 0 4 2

Kremlin 0 0 0 0 0 0 0 0 0 0

Leman 0 0 0 0 0 0 1 26 1 26

Maersk 0 0 26 35 0 0 0 0 26 35

Manubito 0 0 0 0 0 0 0 0 0 0

Marine Serv 0 0 0 0 0 0 0 0 0 0

Megalog 0 0 0 0 0 0 0 0 0 0

MSC 0 0 31 24 0 0 0 0 31 24

Naiber 2 1 12 15 0 0 0 0 14 16

Niledutch 4 0 37 53 0 0 0 0 41 53

Orey 20 18 2 2 2 5 0 0 24 25

Panalpina 0 0 0 0 0 0 0 3 0 3

Prodiaman TNB 0 0 0 0 0 0 0 0 0 0

Secil Marítima 0 0 0 0 0 0 0 0 0 0

Seatrade 7 14 2 0 0 0 2 0 9 15

Senamar 1 4 0 0 0 0 0 0 1 4

Sharaf 0 0 0 0 6 3 2 1 8 4

Sontrânsitos 0 1 0 0 0 0 0 0 0 1

Supermaritime 1 1 0 1 0 0 3 4 4 6

Strurrock 0 0 0 0 0 0 0 0 0 0

SNMA 0 0 0 0 0 0 0 0 1 0

TLC 2 3 0 0 0 0 0 0 2 3

Total 73 67 150 174 30 23 8 38 261 302 Source: EPL.

Comparing the first semester of 2019 with the homologous period leads to the conclusion that traffic increased by 41 vessels, representing an increase of 15.7%. This resulted from the 25 increase in the number of refrigerated vessels from Leman, 12 more vessels from Niledutch and the 9 additional vessels from Maersk. On the other hand, the biggest drops in the arrival of vessels were from Bolloré, CMA CGM and MSC Shipping (a drop of 7 vessels each).

Page 40 of 65

Graph 9 – Vessel Traffic in the Port of Luanda by Navigation Agency (2016 – 1st Semester 2019)

Source: EPL.

4.3.2 Passenger Traffic

In 2018, the number of passengers registered in the Port of Luanda reached 85,415 passengers,

of which 84,098 were transported in vessels related to the oil & gas industry and only 1,317

passengers were related to long-haul vessels.

Data from the last three years shows that the number of passengers dropped 6% in 2017 from

the previous year, but recovered significantly following an increase of 31% in 2018. It is worth

noting that the 2017 drop was essentially due to the marked fall in the number of passengers

from cruise ships, as these dropped from 13,539 passengers to only 456 passengers.

The number of passengers related to activity supporting the oil industry is still the main reason

behind the passenger traffic in the Port of Luanda. This number has been increasing in the last

three years, rising from 55,738 passengers in 2016 to 84,098 passengers in 2018. This represents

an increase of about 150% in two years.

During the first half of 2019, the number of passengers stood at 47,302, of which 98% relate to

operations in the oil sector and only 2% were passengers from cruise ships.

15

41

35

24

16

53

25

3

90

29

48

63

31

13

68

37

49

217

49

64

82

72

24

134

39

169

57

110

118

78

31

123

35

180

0 50 100 150 200 250

Bolloré

CMA CGM

Maersk

MSC

Naiber

Niledutch

Orey

Panalpina

Other Agents

2016

2017

2018

1st Sem.2019

Page 41 of 65

Graph 10 – Passenger Traffic in the Port of Luanda (2016 – 1st Semester 2019)

Source: EPL.

4.3.3 Cargo Traffic

The total volume of cargo handled in the Port of Luanda reached 7,081 thousand tons in 2018,

representing a decline of 8% relatively to 2017. This drop completely offset the 7% growth

recorded in 2017 when it reached 7,703 thousand tons.

Table 14 – Cargo Volume Handled by Type of Goods (2016- 1st Semester 2019)

(thousand tons)

Type of Good 2016 2017 2018 1st Sem. 2019

Liquid Bulk 17 0 2 8

Solid Bulk 820 501 741 269

Fractioned General Cargo 881 801 715 279

Container General Cargo 5,471 6,400 5,624 3,112

Total 7,190 7,703 7,081 3,669 Source: EPL.

The container general cargo is the type of cargo more typically handled in the Port of Luanda,

accounting on average for 80% of the total cargo handled in the port. As was the case with the

total volume of cargo, the amount of container general cargo also recorded an increase in 2017

(+17%), followed by a decline in 2018 (-12%), although not completely offsetting the growth

recorded in 2017.

In terms of the other goods, the volume of cargo handled posted a decline of about 15%

between 2016 and 2018.

When comparing the first half of 2019 with the homologous period, the total volume of cargo

handled saw a 15% increase on the back of the robust performance in container cargo (+25%).

55,738

64,905

84,096

46,476

13,539

456 1,317 826

2016 2017 2018 1st Sem. 2019

Cabotage (Support Oil Industry) Cruises (Long-haul)

Page 42 of 65

Table 15 – Cargo Volume Handled by Type of Goods (1 Semester 2018 vs. 1 Semester 2019)

(thousand tons)

1st Sem. 2018 1st Sem. 2019 Var. (%)

Liquid Bulk 0 8 100%

Solid Bulk 363 269 -26%

Fractioned General Cargo 323 279 -13%

Container General Cargo 2,495 3,112 25%

Total 3,180 3,669 15% Source: EPL.

In terms of the goods handled by seaport terminal, the Multipurpose Terminal has been the one

that has handled the largest volume of cargo, namely 3,044 thousand tons in 2018. The

Container Terminal came in second, with 2,500 thousand tons handled in 2018. The combined

volume for the two types of terminals (Multipurpose and Container) stood at 5,544 thousand

tons, accounting for 78% of the total cargo handled.

Table 16 – Cargo Volume Handled by Terminal (2016 – 1 Semester 2019)

(thousand tons)

Terminal 2016 2017 2018 1 Sem. 2019

GCT (Multiterminais) 443 658 521 234

MVT (Unicargas) 299 222 349 193

CT (Sogester) 2,058 2,697 2,500 1,374

MT (Soportos) 3,196 3,572 3,044 1,679

Support Base to Oil Industry 188 151 154 65

Cimangola 1,006 403 513 33

Total 7,190 7,703 7,081 Source: EPL.

The cargo volume handled in the Multipurpose and Container Terminals declined 12% during

2018 from the previous year. However, it stood 6% above the level recorded in 2016.

In terms of the first half of 2019 and its homologous period, the Multipurpose Terminal recorded

the highest nominal increase (an additional 373 thousand tons handled) while the Multivalent

Terminal saw the largest percentage increase (53%).

Table 17 – Cargo Volume Handled by Terminal (1 Semester 2018 vs. 1 Semester 2019)

(thousand tons)

1st Sem. 2018 1st Sem. 2019 Var. (%)

GCT (Multiterminais) 262 324 24%

MVT (Unicargas) 126 193 53%

CT (Sogester) 1,156 1,374 19%

MT (Soportos) 1,306 1,679 29%

Support Base to Oil Industry 75 65 -14%

Cimangola 254 33 -87%

Total 3,180 3,669 15% Source: EPL.

Page 43 of 65

4.3.4 Container Traffic

In the last seven years, container traffic reached its peak in 2014 with a total of 743,976

containers handled in the Port of Luanda. Since then, and due to the crisis that has affected the

Angolan economy in following years, the number of containers handled in the Port of Luanda

has been declining, reaching its lowest level in 2016 with 401,894 containers (-49% comparing

to 2014 numbers).

In 2018, the number of containers handled reached 445,357 units, representing an increase of

15% from 2016, but nearly 40% below the level recorded in 2014.

Graph 11 – Container Traffic in units (2012 – 1st Semester 2019)

Source: EPL.

A similar evolution took place when analysing the performance in terms of container traffic

measured in TEUs during the same period. The year of 2014 saw the peak in terms of container

handling with 1,055,302 TEUs. In 2018, the containers handled stood at 620,054 TEUs, about

41% lower than in 2014. The lowest level, however, occurred in 2012 with 378,872 TEUs.

Graph 12 – Container Traffic in TEUs

Source: EPL.

Just as was the case in terms of goods handled, the Multipurpose Terminal was also the one that

recorded the highest reading in terms of TEUs. In 2018, the Multipurpose Terminal handled

312,910 TEUs and was the only one that saw a decline from 2017 (-19%).

378,872

912,898

1,055,302

753,286

541,346

683,548620,054

331,161

2012 2013 2014 2015 2016 2017 2018 1st Sem.2019

Page 44 of 65

The second largest terminal in terms of container handling in the Port of Luanda is the Container

Terminal that handled 268 thousand TEUs in the last two years.

In total, the Multipurpose and Container Terminals accounted for more than 90% of the

containers handled in terms of TEUs in the Port of Luanda.

Graph 13 – Container Traffic in TEUs by Terminal

Source: EPL.

The total number of containers handled in 2018 reached 445,357 units, nearly 9% below the

491,675 units recorded in 2017.

In terms of the relative performance during the first half of 2019 and its homologous period,

there was an increase of 24.1% and 16.8% in the Multipurpose Terminal and Container Terminal,

respectively. Both account for 95% of the total number of containers handled in the Port of

Luanda during the first half of 2019.

Graph 14 – Container Traffic in TEUs by Terminal (1st Sem. 2018 vs 1st Sem. 2019)

Source: EPL.

27,525 31,264 14,700

267,057 268,910

144,803

385,382

312,910

170,062

3,584 7,446 1,596

2017 2018 1st Sem. 2019

MVT CT MT Oil & Gas Terminal

15,349 14,700

123,933

144,803137,084

170,062

1,764 1,596

1st Sem. 2018 1st Sem. 2019

MVT CT MT Oil & Gas Terminal

Page 45 of 65

Table 18 – Container Traffic by Terminal and type of Container

Source: EPL.

Full Empty Total Full Empty Total

10 0 0 0 0 0 0 -

20 6,818 6,203 13,021 8,451 7,975 16,426 26%

40 3,864 3,388 7,252 3,966 3,453 7,419 2%

Sub-total 10,682 9,591 20,273 12,417 11,428 23,845 18%

10 0 0 0 0 0 0 -

20 53,681 46,440 100,121 54,508 48,680 103,188 3%

40 47,977 35,491 83,468 46,225 36,636 82,861 -1%

Sub-total 101,658 81,931 183,589 100,733 85,316 186,049 1%

10 0 0 0 0 0 0 -

20 110,279 71,005 181,284 90,681 55,687 146,368 -19%

40 57,205 44,844 102,049 44,694 38,339 83,033 -19%

Sub-total 167,484 115,849 283,333 135,375 94,026 229,401 -19%

10 1,621 988 2,609 1,619 808 2,427 -7%

20 1,332 296 1,628 749 289 1,038 -36%

40 161 82 243 1,991 606 2,597 969%

Sub-total 3,114 1,366 4,480 4,359 1,703 6,062 35%

10 1,621 988 2,609 1,619 808 2,427 -7%

20 172,110 123,944 296,054 154,389 112,631 267,020 -10%

40 109,207 83,805 193,012 96,876 79,034 175,910 -9%

Total 282,938 208,737 491,675 252,884 192,473 445,357 -9%

Container

Year 2018

Total (Load + Unload)Total

Change

Year 2017

Total (Load + Unload)Terminals

MVT

CT

MT

Oil & Gas

Terminal

Total

Full Empty Total Full Empty Total

10 0 0 0 0 0 0 -

20 9,309 5,336 14,645 6,818 6,203 13,021 -11%

40 4,609 2,820 7,429 3,864 3,388 7,252 -2%

Sub-total 13,918 8,156 22,074 10,682 9,591 20,273 -8%

10 0 0 0 0 0 0 -

20 48,787 33,037 81,824 53,681 46,440 100,121 22%

40 31,447 21,276 52,723 47,977 35,491 83,468 58%

Sub-total 80,234 54,313 134,547 101,658 81,931 183,589 36%

10 0 0 0 0 0 0 -

20 92,216 68,680 160,896 110,279 71,005 181,284 13%

40 44,673 35,243 79,916 57,205 44,844 102,049 28%

Sub-total 136,889 103,923 240,812 167,484 115,849 283,333 18%

10 1,365 739 2,104 1,621 988 2,609 24%

20 1,486 440 1,926 1,332 296 1,628 -15%

40 334 97 431 161 82 243 -44%

Sub-total 3,185 1,276 4,461 3,114 1,366 4,480 0%

10 1,365 739 2,104 1,621 988 2,609 24%

20 151,798 107,493 259,291 172,110 123,944 296,054 14%

40 81,063 59,436 140,499 109,207 83,805 193,012 37%

Total 234,226 167,668 401,894 282,938 208,737 491,675 22%

Total

ChangeContainer

Year 2016 Year 2017

Total (Load + Unload) Total (Load + Unload)

Total

MVT

CT

MT

Oil & Gas

Terminal

Terminals

Page 46 of 65

5 MULTIPURPOSE TERMINAL OF THE PORT OF LUANDA

5.1 Description of the different relevant activities developed in the Terminal

Historically, the technical and commercial exploration of the MT has been developed in the

scope of a concessioned public service. This means that the Seaport Operator (Concessionaire)

explores the seaport infrastructure by providing general and non-discriminatory services to all

potential users, subject to the respective regulatory control by the EPL (Grantor) and other

seaport authorities.

The public service exploration (according to the wording of the latest Concession Contract)

includes the following activities:

a. Execution of all loading, unloading, maintenance and storage operations, related to

docked vessels and respective cargo, providing all technical and human means;

b. Maintenance of embankments, facilities and equipment of the MT;

c. Ensure the compliance of existing legal and regulatory provisions in the premises of the

MT, in what concerns the preservation of the premises, water management and

environmental protection.

The concession of public service excludes those activities related with movement and security

(docking, mooring, unberthing), which are of the sole responsibility of EPL.

It is worth noting that the MT has been used mostly for containerized cargo handling operations,

although it is also authorized and able to operate simultaneously both general cargo and

containerized cargo.

5.2 Description of the main infrastructures and equipment

The MT is inserted in a piece of land with a total area of 229,100 sqm, that is an integral part of

the seaport complex of the Port of Luanda. The MT is delimited in the north by the Atlantic

Ocean, in the south, east and west by the Oil & Gas Terminal, explored by SONILS – Sonangol

Integrated Logistics Services, Lda.

The total area of the MT is divided into the manoeuvre zone (next to the docking pier), the

container storage area, a workshop area and the truck manoeuvre and parking area.

Access to the Terminal is made through the public road (Estrada do Cacuaco), which is asphalted

and in good conditions.

Page 47 of 65

Figure 11 – Map of the Multipurpose Terminal

5.2.1 Docking pier

The docking pier of the MT is 610 meters long, with an average depth of (-12,50m) ZH, that

allows the docking of large-scaled vessels, such as container carriers like Panamax. The pier is

currently in a good structural situation.

The pier protective fenders installed on the wall of the pier are cone-shaped with a steel panel

covered with high density polyethylene (UHMWPE) on the outside that reduces traction when

touching the hull of the vessels. These fenders currently present some signs of wear and tear

that is recoverable.

The docking pier of the MT has installed TEE-HEAD pier heads, all of which are operational and

only need protective painting. The service ladders of the pier are destroyed.

5.2.2 Embankment

The embankment of the MT covers 229,100.00 sqm that includes an area continuous to the

docking pier that is reserved for ship stowage operations (manoeuvre zone), a reserved area for

container storage and a third manoeuvre and parking zone for trucks with about 17 thousand

square-meters.

The MT container park has a maximum simultaneously storage capacity of 15,000 TEUs, allowing

the stacking of full containers up to five levels. It is also equipped with a fuel pump with a

maximum storage capacity of 128 thousand litres of diesel.

In the manoeuvre zone next to the docking pier, the embankment’s approach slab presents

gradual flattening. There were 24 large-sized holes located in the container storage area that

are clearly signalled, which hampers cargo handling operations.

5.2.3 Dry Port of Mulemba

The Dry Port of Mulemba (DPM) will not be an asset to include in the framework of the future

Concession. This is an asset held by the old concessionaire Soportos in partnership with an

Angolan group, Grupo GEMA. In case the future operator wants to keep using this terminal as a

support to the seaport operation of the Multipurpose Terminal, it will have to negotiate the

commercial terms and conditions with its current proprietor.

Page 48 of 65

The DPM is located 16km from the MT and there is an asphalted road connection in good

conditions between the MT and Bairro da Uíge that is 6 km away from the second-line terminal.

Accesses from here are not asphalted and require recurrent maintenance works.

The DPM has a storage capacity of 14,000 TEUs, with 286 connections for reefers containers.

The supply of electricity is done through the public network and the supply of water through the

transport of water containers.

The second-line terminal of Mulemba is equipped with a fuel supply pump with a storage

capacity of 123 thousand litres of diesel.

5.2.4 Equipment

Cargo Handling Equipment

The MT has seven mobile seaport cranes of the German brand LIEBHERR, all operational and

fully functional. The LIEBHERR cranes have existing maintenance contracts with the brand, in

which was not set up a deadline for termination. Instead, these contracts can be terminated

upon a three-month prior notice.

Figure 12 – LIEBHERR cranes and Pier Area

Source: CAC.

Moreover, there are two more seaport mobile cranes of the brand Gottwald that are currently

broken down and inoperative, without a set timeframe or expectation of recovery following the

diagnosis that was made.

The table below presents a summary of some of the technical characteristics of the existing

mobile cranes of the MT:

Page 49 of 65

Table 19 – List of existing Mobile Cranes in the Terminal

# Brand Model Maximum Capacity

Manufacture Year

Current Condition

1 LIEBHERR LHM 400 104 ton 2006 Operational

2 LIEBHERR LHM 400 104 ton 2012 Operational

3 LIEBHERR LHM 400 104 ton 2012 Operational

4 LIEBHERR LHM 550 144 ton 2013 Operational

5 LIEBHERR LHM 550 144 ton 2013 Operational

6 LIEBHERR LHM 550 144 ton 2014 Operational

7 LIEBHERR LHM 550 144 ton 2014 Operational

8 GOTTWALD Inoperational

9 GOTTWALD Inoperational

Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

The equipment used to handle the containers inside the terminal (designated as “handling

equipment”) include mostly reach stackers, tractors and respective trailers and forklifts. It is

worth noting that, in general, all of this equipment is currently in good technical conditions with

the exception of the seaport tractors fleet that show significant signs of wear and tear.

The table below presents the existing equipment in each of the locations:

Table 20 – List of existing Handling Equipment in the Terminal

Type of Equipment

Brand Qty Maximum Capacity

Manufacture Year

Location Current

Condition

Reach Stacker TEREX 16 45 tons [2008-2017] Multipurp. Terminal

2 broken-down

Automatic Spreaders

BROMMA / STINNIS

29 50 a 60 tons [2007-2015] Multipurp. Terminal

9 broken-down

Seaport Tractors

SINOTRUCK 20 [2007-2012] Multipurp. Terminal

2 broken-down

Trailers CIMIC/QT 31 [2007-2012] Multipurp. Terminal

6 broken-down

Empty Forklift SANY 3 Multipurp. Terminal

All broken-down

Telescopic Forklift

MANITOU 1 Multipurp. Terminal

Broken-down

Forklift 3 Ton. MANITOU 1 3 tons Multipurp. Terminal

Operational

Forklift 5 Ton MANITOU 1 5 ton

Multipurp. Terminal

Operational

Forklift 8 Ton BERGMAN 1 8 ton

Multipurp. Terminal

Operational

Forklift 16 Ton BERGMAN 1 16 ton

Multipurp. Terminal

Operational

Reach Stacker TEREX 8 45 ton [2008-2017] Dry Port

Mulemba 1 broken-

down

Page 50 of 65

Type of Equipment

Brand Qty Maximum Capacity

Manufacture Year

Location Current

Condition

Telescopic Forklift

MANITOU 1 Dry Port

Mulemba Operational

Trailers CIMIC/QT 2 Dry Port

Mulemba Operational

Empty Forklift SANY 1 45 Ton BCA - Kikolo

Operational

Reach Stacker TEREX 1 45 Ton [2008-2017] BCA - Kikolo

Operational

Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

Fleet of Light Vehicles

The fleet of light vehicles includes 57 units, as detailed in the table below:

Table 21 – List of existing Light Vehicles in the Terminal

Vehicle Description Qty Current

Condition

TOYOTA COASTER (mini-bus) 1 Operational

TOYOTA Land Cruiser 13 Operational

TOYOTA Land Cruiser Prado 1 Operational

TOYOTA Prado 7 Operational

TOYOTA Hilux 6 Operational

TOYOTA RAV 4 5 Operational

CHEVROLET-N300 4 Operational

HYUNDAI Tucson 8 Operational

MITSHUBISHI Pajero 2 Operational

TOYOTA Fortuner 1 Operational

HYUNDAI Santa Fe 1 Operational

MITSHUBITSHI Canter 2 Operational

ISUZU Plateau 1 Operational

NISSAN Hardbody 1 Operational

RANGE ROVER 1 Operational

Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

Electricity generators

The MT also includes several diesel-electric generators. Eight diesel-electric generators of

several brands (DEMO, MILLER, and PERKINS-2500) are located in the Multipurpose Terminal

and are operational.

Four generators of the brand CATERPILLAR, two generators of the brand SDM and one of the

brand MILLER are located in the Dry Port of Mulemba. There is only one generator that is

inoperative of the brand CWOERMAN that is located in the second-line terminal. These

equipment are not included in the set of assets to be transferred to the Concessionaire.

Page 51 of 65

Information Technology

The existing seaport management software in the MT is Winport, where the management of the

loading and unloading of cargo from container ships is made, as well as the entry and exit of

registered containers in the terminal concierge, temperature monitoring of reefers containers

and other physical devices, such as weighing equipment and equipment to control the access of

people to the terminal (tourniquets).

Table 22 – List of IT Equipment

IT Equipment

Multipurp.T. D.P.Mulemba Terra Verde Total

Computers 152 31 42 225

Printers 73 15 22 110

Telephones 58 14 25 97

Servers 14 7 6 27

Switches 23 3 6 32

Routers 3 2 0 5 Source: Technical Reports of the Management Committee of the Multipurpose Terminal.

5.2.5 Water and Electricity Supply

The supply of water is ensured by the extension located in the adjacent terminal belonging to

SONILS. The supply of electricity is ensured by a group of generators located in the SONILS

terminal, although these are managed by a third party.

The process of installing the connection of water and electricity supply to the public network in

the MT is currently ongoing and will be done through the respective installing entity, namely

EPAL and ENDE. The Grantor will be responsible for this process.

5.2.6 Security and CCTV Equipment

The MT has 16 qualified security personnel from Direcção de Segurança e Ambiente (Security

and Environment Department) that have security and supervision roles in all the perimeter of

the premises, such as monitoring the CCTV equipment, verifying documentation in the entry and

exit of goods to and from the terminal, control the access of terminal personnel and third parties

and intervention in case of entry of non-authorized persons.

The CCTV system is operational and includes 36 cameras (30 fixed and 6 mobile) located in

strategic locations of the terminal that allow the permanent monitorization of the premises.

There is also a system to control the access of people to the terminal (tourniquets), but it is

currently inoperative. The security personnel also have 28 communication radios and 11 mobile

phones, all of which are operational.

The terminal premises is not fenced in all of its perimeter, with some locations being fenceless.

Page 52 of 65

5.3 Description of the current labour force

The labour force of the MT has a total of 725 employees, according to information disclosed in

the payroll map from October 2019. The Grantor plans to transfer these employees to the future

Concessionaire Company.

The labour force structure includes mostly men (676 men and 47 women) and the average age

is 39 years.

Graph 15 – Age and Gender Distribution of the Labour Force

Source: CAC.

Regarding the work experience of the labour force, the average number of years of experience

in the company is 6.2 years with a significant number of employees being affiliated since the

start of operations of Soportos.

The majority of workers in the MT finished Secondary School (59%) followed by High School

(23%). It is worth noting that 40 employees have an academic degree (Bachelors or College

Degree) and 79 employees do not have any literary (“unspecified”).

6

27

14

1

0

60

368

186

55

7

20-30

31-40

41-50

51-60

+60

Male Female

Page 53 of 65

Graph 16 – Literacy of the Labour Force

Source: CAC.

In terms of organizational structure, the labour force is currently organized as follows:

Graph 17 – Labour Force by Department

Source: CAC.

The monthly cost of the current labour force reached 266,122 thousand kwanzas, with 60% of

these representing base salaries paid to employees and the remaining 40% representing

subsidies. The subsidies paid include mainly those for transportation, food, attendance and

related with performance.

79

16

163

427

436

0

50

100

150

200

250

300

350

400

450

Undefined PrimarySchool

High School SecondarySchool

BachelorDegree

GraduateDegree

2

3

3

4

6

7

8

11

13

15

16

19

20

20

22

25

31

32

41

47

49

88

90

153

Container Maintenance, Repair and Cleaning Dep.

Litigation Dep.

Projects & Comercial Dep.

Insurance Dep.

Treasury Dep.

Human Resources Dep.

Accounting Dep.

Tugboat Sector Dep.

Stationery and Heritage Dep.

Baplie/Baypan Dep.

ICT Dep.

Health & Safety Dep.

Private Institutions Comercial Dep.

Transhipment Dep.

Supervision Container Tracking Dep.

Internal Works Dep.

Operations & Supervision Dep.

Equipment & Machine Dep.

Mangement Board Secretariat

Security Dep.

Craine Operations Dep.

TEREX Operations Dep.

General Maintenance and Technical Assistance Dep.

Container Tracking Dep.

Page 54 of 65

The monthly base salary varies between a minimum of 128,139 kwanzas and a maximum of

804,083 kwanzas. Including subsidies, total remuneration ranges between 199,851 kwanzas and

1,078,411 kwanzas.

Graph 18 – Minimum and Maximum Monthly Salary, Base and Total, in Kwanzas

Source: CAC.

128,139199,851

804,03

1,078,411

Base Monthly Remuneration Total Monthly Remuneration

Min Max

Page 55 of 65

5.4 Operational Activity Performance of the Multipurpose Terminal

Vessel traffic in the MT recorded significant growth between 2013 and 2015, with an average

annual growth rate of 19.9%. This growth was largely due to the start of the concession contract

with SOPORTOS, that required the execution of investments for the expansion of the handling

and storage capacity in the Multipurpose Terminal. It is worth noting that, during this period,

the seaport operation turned out to be more efficient with an average ship stopover declining

from 3.73 days in 2012 to 1.32 days recorded in 2015.

Table 23 – Vessel Traffic Performance in the Multipurpose Terminal

Vessel Traffic 2012 2013 2014 2015 2016 2017 2018 1S 19

CMA CGM 0 0 5 1 35 51 72 40

Maersk 0 0 0 0 3 10 11 7

MSC 0 0 11 14 56 70 58 24

Niledutch 40 61 57 44 26 56 75 52

Other Agents 108 121 199 247 207 134 37 13

Total 148 182 272 306 327 321 253 136

Growth Rate 23.0% 49.5% 12.5% 6.9% -1.8% -21.2%

Avg. Stopover (days)1 3.73 3.14 2.16 1.32 1.35 1.79 1.41 1.99 1The calculation for the average stopover took into consideration the vessel arrival and departure dates.

Source: Statistics supplied by SOPORTOS. CAC Analysis.

In the period between 2016 and 2017, vessel traffic in the MT remained stable (between 320

and 330 vessels welcomed annually), despite the increase in demand for seaport services from

internationally renowned navigation agents such as CMA, Maersk and MSC. Niledutch has been

a regular client of the seaport services provided by the MT, since 2012.

The year 2018 saw a significant decline of 21% in vessel traffic in the MT relatively to the previous

year. This was due to the marked drop in oil prices that negatively impacted the performance of

the Angolan economy and, as a result, the amount of imported goods.

Considering the data reported for 2018 alone, it is worth noting that the average daily arrivals

to the terminal stood at 1.5 vessels. The average stopover time (loading/unloading) for the

container vessels stood between 1 and 1.8 days.

Page 56 of 65

5.4.1 Container Cargo

The performance of container cargo handled from 2012 to the end of the first half of 2019 is

displayed in the graph below:

Graph 19 – Performance of Containers Handled in TEUs (2012 – 1st Semester 2019)

Source: CAC.

Historically, the handling of full containers is mostly performed in the unloading operations of

the vessels, with this cargo classified as imports in Angola.

Graph 20 – Relative Performance of Unloading and Loading Operations in handling of Full Containers, in % (2012 – 1st Semester 2019)

Source: CAC.

On the other hand, the handling of empty containers is mostly done in loading operations,

despite the increasing importance in terms of unloading operations witnessed in recent years.

54.2% 53.0%

60.0%55.2% 56.6%

58.3%57.6%

61.3%

45.8% 47.0%

40.0%

44.8%43.4%

41.7%

42,4%

38.7%

281,751298,732

460,557

361,449320,778

385,382

312,434

170,062

2012 2013 2014 2015 2016 2017 2018 1º S. 2019

Full Empty

Page 57 of 65

Graph 21 – Relative Performance of Unloading and Loading Operations in handling of Empty Containers, in % (2012 – 1st Semester 2019)

Source: CAC.

It is worth noting that the Transhipment (“TBT”) operations have represented on average

(between 2012 and 2018) 27.7% of the handling of full containers, 0.2% of the handling of empty

containers and, on aggregate, 16% of the total handling of containers. The annual performance

of this data is described in the graph below.

Graph 22 – Relative Performance of the Transhipment Operations in Cargo handling, in % (2012 – 1st Semester 2019)

Source: CAC.

During the year 2018, the average productivity ratio for stowage operations (loading and

unloading) of containers ships stood at 70 TEUs/hour.

Page 58 of 65

5.4.2 Non-container Cargo

The handling of non-container cargo has been residual during the last years of operation of the

MT when compared with the annual volume of container cargo. The handling of solid bulk was

recorded at an early stage of the previous concession, but these were discontinued after the

third quarter of 2014.

Graph 23 – Performance of the Handling of Non-container Cargo in the Multipurpose Terminal (2012 – 1st Semester 2019)

Source: CAC.

341

43

0 0 0 0 0

199

48

125

72

n.d. n.d.

77

2013 2014 2015 2016 2017 2018 1º S. 2019

tho

usa

nd

s o

f To

ns

Bulk Cargo General Cargo

Page 59 of 65

5.5 Historical Economic Indicators of SOPORTOS

The exploration of the Multipurpose Terminal during the period 2013-2018 was concessioned

to SOPORTOS S.A. The economic indicators of the activity developed by SOPORTOS is presented

below. However, it is worth noting that this data represent not only the exploration of the

Multipurpose Terminal, but also other activities related to the seaport activity of the

Multipurpose Terminal.

Graph 24 –Operating Revenue performance of SOPORTOS between 2013 and 2018

Source: SOPORTOS Annual Reports, between 2013 and 2018.

Page 60 of 65

5.6 SWOT Analysis

In terms of a SWOT analysis, the following aspects standout that may impact the Multipurpose

Terminal:

Table 24 – SWOT analysis of the Multipurpose Terminal

Opportunities Threats

Geographic location of Angola as a potential gateway to the DRC, Zambia and Botswana

Commitment of the State in modernizing seaports and improving seaports infrastructures

Export development plan (PRODESI), covering sectors like agribusiness and manufacturing that will generate more traffic in seaports

Development of intermodal logistics platforms should benefit seaport activity

Population growth (3% yearly) and development of a middle class will benefit trading and transportation flows in the medium/long-term

Recovery of the Angolan economy should increase seaport activity

Import reduction plan (PRODESI)

Competition/reaction from other terminals

Masterplan of the Port of Luanda and new land-use plan of the city of Luanda

Lack of dredging of the port by EPL prevents traffic of large-scale vessels

Existing foreign exchange restrictions (but in the process of being resolved)

Strengths Weaknesses

Financially well balanced conditions of the MT (infrastructure, workforce and equipment)

Established and regular contact with client portfolio (overseas and domestic)

Structure of the labour force / experienced management team of the MT (ex-Soportos)

Own maintenance and technical assistance

Potential for expanding the concessioned area (adjoining areas to Sonils)

Seaport tariffs USD denominated

Need for infrastructure investment (slab, holes, fenders) and equipment renewal (tractors and trailers)

Lack of container gantry cranes

Lack of scale does not allow economies of scale and efficiency gains

Difficulties in managing stock of consumables and spares

Future concessionaire may have to find a solution for a dry port alternatively to the Dry Port of Mulemba.

Considering the external backdrop and internal aspects, the Multipurpose Terminal operation is

globally an attractive investment opportunity, with potential to overcome risks/threats that may

be presented.

6 SUMMARY OF THE TENDERING PROCEDURE

The main terms of the tender procedure are the following:

Page 61 of 65

Table 25 – Summary Table of the Tender Procedure

Item Description

Adjudicator Entity Empresa Portuária de Luanda, E.P.

Type of Tender The tender is public, intended for companies or group of

companies with proven experience in the activity subject to the

tender

The start of the Public Tendering Procedure was formalized

through Presidential Order n: 164/19 of 27 September

Tendering Objective Adjudicate, by celebrating a concession contract for the public

service of managing and exploring the Multipurpose Terminal of

the Port of Luanda

Proposals Delivery Date

30 March 2020

Clarifications Deadline

Request: until the last third of the deadline granted for the

presentation of proposals

Answer: until the end of the second third of the deadline

granted for the presentation of proposals

Provisional Bond USD 250,000.00

Appraisal Criteria Current Value of the Grantor Remuneration calculated in

accordance with paragraph a) of article 17 of the Tendering

Program (70%)

Technical Appraisal elements (30%):

o Investment plans to be done by the Concessionaire (50%)

considering the following criteria:

Total investment in projects/works and equipment

proposed by the bidders, to be done during the

Concession period

Percentage of local content of the proposed

investments

Adequacy of the proposed investment plan to the

expected traffic volume

o Adequacy of the terminal organization plan (25%)

o Adequacy of the training and professional development of

the human resources allocated to the Concession (25%)

Negotiation and Award of the Proposals

The bidders whose proposals are ranked first and second shall

be selected for the negotiation phase

Following the negotiation phase the selected bidders shall

present their final proposals.

Page 62 of 65

7 SUMMARY OF THE SPECIFICATIONS

The main terms of the specifications are the following:

Table 26 – Summary of the Specifications

Item Description

Grantor Empresa Portuária de Luanda, E.P.

Concession Term 20 years

Guarantee Equivalent to two years of Fixed Rent

Tariff Regulation The Concessionaire will charge, for payment of the uses and

services that it is authorized to provide, tariffs to be fixed within

the maximum tariffs limit established in the Port Tariff

Regulation of Angola, the Concessionaire being allowed to make

commercial discounts

In accordance with the current legislation the tariffs are fixed in

USD

Rents of the

Concession and

Payments to the

Grantor

The Concessionaire shall pay to the Grantor the following rents:

o On the date of signature of the Concession Agreement, the

Concessionaire shall pay to the Grantor the amount defined

in point 1 of the annex to Appendix VI of the Tender

Program which cannot be lower than of USD 100 million nor

higher than USD 150million

o A Fixed Annual Rent of USD 3 million

o Variable rent calculated by the product of the application

of the containerized unit rates of each echelon in the

submitted proposal, which may not be lower than the

minimum unit rates for each echelon in Appendix VI, Table

A of the Tender Program, by the number of TEUs handled

listed in Table B of that Appendix and which may not be less

than 300,000 TEUs per year. The overall amount of TEUs

allocated to each echelon shall be divided between overfill

and outbound or inbound cargo, for the respective unit

rates given in Table A. This distribution shall be based on

the respective ratio of each category to overall amount

observed each year; plus

o Variable rent calculated by the product of application of the

general or special unit load rates, by the respective annual

quantities moved in tons, both of which appear in Table C

of Appendix VI of the Tender Program; plus

Page 63 of 65

Item Description

o Variable rent determined by the product of applying the

special rate unit rates set out in Table D of Appendix VI of

the Tender Program, by the amount of general cargo

moved annually in number of vehicles

Both fixed and variable rents will be updated annually based on

American CPI

Assets assigned to the

Concession

Assets assigned to the Concession are considered to be the port

infrastructure and port equipment, as well as all rights related

directly or indirectly to the Concession, all being identified,

including their status, in Appendix VII of the Tender Program

Conservation,

Maintenance and

Development of The

Concession

The Concessionaire shall comply with the Concession

Investment Plan, submitted with the Tender

The Concessionaire is responsible for the construction, repair

and conservation of the works that make up the establishment,

as well as the installation and/ or repair of the equipment

necessary for the execution of the Concession Contract

Concession’s

Personnel

The Concessionaire shall assume the integration of all Workers

identified in Appendix VIII to the Tender Program and which will

constitute Appendix to the Concession Agreement. The

Concessionaire shall also ensure the seniority of the

workstations of each of the Workers concerned and all other

rights and obligations that fall under the terms of the

employment contracts currently in force between them and the

Grantor

Restoring the

financial balance

The Concessionaire shall be entitled to the restoring of the

financial balance of the contract only in the following cases:

o Modification imposed by the Grantor of the

Concessionaire's obligations that directly results in an

increase in expenses or a loss of the Concessionaire's

revenues;

o Causes of force majeure as defined in the concession

agreement, unless the contract terminates as a result

thereof;

o Legislative changes of a specific nature that directly result

in an increase in expenses or a loss of revenue from the

Concessionaire;

o When the right to the restoration of the financial balance is

expressly provided for.

Page 64 of 65

Item Description

Force Majeure Events Acts of war, hostilities, riots, civil war, rebellion or terrorism,

blockades, embargoes, strikes and labour conflicts

Blockade of access to the Multipurpose Terminal that extends

for more than 30 consecutive days

Pests, epidemics, earthquakes, severe floods, fire, storms or

other natural cataclysms

Any legislative change introduced in Angola that prevents the

Concessionaire from fulfilling obligations under the Concession

Concessionaire’s

Events of Default

Non-compliance with public service obligations under the terms

of the contract

Repeated disobedience to the Grantor's determinations in the

exercise of its supervisory function

Transfer, subcontracting or assignment of the Concessionaire's

contractual position without prior authorization from the

Grantor

Failure to comply with judicial or arbitration decisions related to

the concession

Failure to provide or replenish deposits within the terms and

time limits provided for

Failure to provide the information required by the

Concessionaire

Non-payment of fines

Obstruction of sequestration or intervention in case of serious

emergency

Delay in fulfilling assumed investment obligations for a period

exceeding one year

Non-replacement of the amount of the deposit by the

Concessionaire

Presentation of the Concessionaire to insolvency or declaration

of the Insolvency of the Concessionaire by the Court

Deviation from the object of the Concession

Abandonment of the construction, conservation or operation of

the Concession

Obstruction to Sequestration

Sequestration of the concession for the maximum period legally

provided for

Refusal or impossibility of the Concessionaire to resume the

Concession following sequestration

Repetition, after the resumption of the Concession, of the

situations that motivated the sequestration

Occurrence of serious deficiency in the organization and

development by the Concessionaire of the activities

Page 65 of 65

Item Description

concessioned, in terms that may compromise their continuity or

regularity under the conditions required by law and the

Concession Agreement

Failure to comply with or seriously defect the Concessionaire's

human resources obligations, in particular the obligations

regarding safety, health and hygiene at work

Condemnation of the Concessionaire for any offense that

seriously affects its professional reputation or prevents it from

engaging in any of the activities concessioned

Any fraudulent activity intended to harm the public interest

Redemption The Concession may be redeemed when justified in the public

interest, provided that one third of the term of the concession

has elapsed, upon written notice to the Concessionaire with at

least 6 months advance notice.

Sequestration The Grantor may assume the management of the Concession if,

due to the fact attributable to the Concessionaire, the cessation

of the activity is imminent or occurs a serious disruption that

jeopardizes the operation of the concession.

Contractual Fines The concession agreement will set out contractual fines in case

of failure by the Concessionaire to comply with or defective

fulfilment of any of their obligations arising from the concession

agreement or from determinations issued by the Grantor

Settlement of

Disputes

Negotiations

Arbitration

Applicable Law Angolan