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Introduction to the Country

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Government type
Guinea is a secular State independent since 02 October 1958. It has a pluralist presidential regime since 1991. The President of the Republic is elected by universal suffrage and for a 5-year mandate renewable once. He is the head of the Executive.

The National Assembly with 114 deputies elected by universal suffrage for 4 years holds legislative power. The Supreme Court and the Economic and Social Council complete the great democratic and republican institutions. Guinea is organized into 8 administrative entities headed each by 1 Governor.
Currently Guinea is under transition period from the death of the President Lansana CONTE in December 2008.

Legal system
Based on French civil law system, customary law, and decree; accepts compulsory ICJ jurisdiction with reservations.

Economy overview
Guinea possesses major mineral, hydropower, and agricultural resources; yet remains a poor underdeveloped country. The agricultural sector employs 80% of the work force. Guinea has half of the world's bauxite reserves and is the second largest bauxite producer. The country's economy is heavily dependent on the mining sector which contributes 19% of exports earnings, 29% of the State's own earnings and 40,000 jobs.

Investor confidence has been sapped by rampant corruption, a lack of electricity and other infrastructure, a lack of skilled workers, and the political uncertainty because of the transition period.
The Guinea franc depreciated sharply as the prices for basic necessities like food and fuel rose beyond the reach of most Guineans.


Next election due
President is elected by popular vote for a five-year term; and candidate must receive a majority of the votes to be elected president. The last election was held in 21th of December 2003 (ad hoc election scheduled for 13th December 2009); the prime minister is appointed by the president. The Guinean State is currently under transition period.

Legal and Regulatory framework

Short introduction to power sector: please highlight the key players/stakeholders in the sector and indicating whether there are any existing independent power projects in development or operation.

The Guinea State Electricity Company shortened EDG (Societe d'Etat d'Electricite de Guinee) is a limited company with public participation created in 16th June 2003 is in charge of maintenance, rehabitation, renewal and development of works and operating equipments, transport and distribution of power generating. It is a result of a merger of the National Electricity Company of Guinea ENELGUI and the Guinean electricity Sogel (Operating company). The Guinean State is the only shareholder. This company was created in a context of emergency for a transitional period.

The EDG currently operates in 24 districts of the country and EDG produces in total 235.26MW of power, in which 224MW is interconnected, and 11.26 MW is in discrete locations. In 2005, the number of customers identified by EDG was 128 659 subscribers of which 128 360 on the low voltage (LV) and 299 on the medium voltage (MV).

The CBG (Compagnie des Bauxites de Guinee) and the ACG (l'Aluminium Company of Guinea) sell electricity to EDG to provide power in the cities of Boke and Fria.

The "Letter of sector policy for the promotion of decentralized rural electrification", published in February 1998 provides for the privatization of rural electrification with the disengagement of the state, end the monopoly of the Electricity of Guinea (EDG) and open to private sector.

The existing power projects are:

  1. Hydroelectric dam in Garafiri in construction with an initial capacity of 75 Megawatt.
  2. The project Tombo III Energy with an investment of U.S. $ 50 million, financed by the World Bank and the European Investment Bank, has just been completed (capacity of 33 megawatts).


 (a) Key enabling legislation

(i) Key legislation and regulations: please list the key legislation and regulations that govern a project company and a power project, particularly relating to power supply and generation.

  1. Uniform Act related to Commercial Companies and Economical Interest Grouping: Act adopted on 17th of April 1997 and published in the JO OHADA n*2 dated on 1st October 1997
  2. Law n*L/92/043 dated on 8th February 1992 related to the Code of Economic Activities
  3. Law n*L/93/039/CTRN of 13th September 1993 which regulates the responsibility frameworks of the various stakeholders, the management and operation modalities of power generation, transmission and distribution activities, the provisions for participation by the private sector allocation of concessions, creation of the National Electric Energy Board (CNEE : Conseil National de l'Energie Electrique)and the penalty provisions applicable to the power sector.
  4. Law n*L/97/012/AN dated on 1st June 1998 related to the financing, construction, operation, maintenance and transfer of production facilities developed by private operators: BOT (Built, Operate and Transfer), BOO (Built, Own and Operate), BOOT (Build, Own, Operate, Transfer)
  5. Law n*L/2001/18 / dated on 23 October 2001 related to the adoption and promulgation of the Law on the reform and the disengagement of the state to public companies.
  6. Ordinance n*001/PRG/87 dated on 3 January 1987, modified by the Law n*L/95/029/CTRN dated on 30th June 1995 related to Investment Code
  7. Decree n*001/PRG/87 modified by the Decree N* D/ 97/ 208 /PRG/SGG related to the Decree of application of the Investment Code.

(ii) Overriding legislation and regulations: is there any legislation or are there regulations that apply to a power project or project company and that prevail over the terms of the project documents, such as the terms of the generating licence?

The laws which regulate the power projects are:

  1. Law n*L/93/039/CTRN of 13th September 1993 which regulates the responsibility frameworks of the various stakeholders, the management and operation modalities of power generation, transmission and distribution activities, the provisions for participation by the private sector allocation of concessions, creation of the National Electric Energy Board (CNEE : Conseil National de l'Energie Electrique) and the penalty provisions applicable to the power sector.
  2. Arrete n* A/94/2378/MRNE/MOF/SGG which completes the Law L93/039/CTRN dated on 13 September 1993 on matters related to pricing of Energy.

 (b) Powers and capacity of the Government and Constitutional issues

(i) Governmental involvement: which levels of Government will need to be involved in the Project, e.g. national/federal, state, local?

The involvement of the Government in the project is at a national level.

Powers of Government: briefly, how are the powers of the Government entities referred to in paragraph (i) derived (under statute?)

Power generator has to be undertaken under the form of the contractual provisions set out in the BOT Law (Law n*L/97/012/AN dated on 1st June 1998 - see above).

(ii) Powers in respect of the project: what are the powers vis-a-vis the Project and a project company?

The government issues all certificates, authorizations, attestations necessary for the project.

(iii) Power to contract: does the Government have the power to enter into the project documents to which it is party (and any direct agreement with the lenders relating to them) and perform its obligations thereunder?

The BOT convention concluded between the State and the investor must contain the general clauses which are defined by Decree approved by the Council of Ministers. The terms applicable to each BOT (or a variant on BOT operations) will be decided case by case.

(iv) Are there any legislative restrictions applicable to the giving of sovereign guarantees?

Government guarantees must be approved. The Guinean Government guarantees to the investor a to make up any shortfall in revenue in case the Government orders the services covered by the BOT Convention are sold at lower prices compared to those under the Convention.

 (c) Regulator

(i) Is there a regulator: please advise whether there are any regulators (independent or otherwise) in the jurisdiction with powers/rights in respect of the power project or Project Company. If so, how are their powers derived (under statute) and what are their powers vis-a-vis the power project and a project company?

The National Electric Energy Board (CNEE : Conseil National de l'Energie Electrique ) is the regulator of power projects in Guinea. Its powers are set out in the Law n*L/93/039/CTRN of 13th September 1993 (see above).

(ii) Power to contract: does the regulator typically enter into project documents relevant to the Project? If so, does it have power to do so?

The CNEE does not contract directly with the project company. Its powers are stipulated on the Law n*L/93/039/CTRN of 13th September 1993 (see above).

(iii) Licence: what is the form of licence or licences (if any) that the regulator (or relevant entity) typically issues? Is it possible to amend the proposed form of licence?

The basic form of licences used is under the form of BOT, BOO, or BOOT. Each document is adapted in a case by case basis.

(iv) Independence: is the regulator regarded as being genuinely independent from government/the utility? How is the regulator funded?

The regulator is funded by industry participation.

 (d) Procurement

(i) Procurement process: please advise whether there is any requirement to have pursued any form of procurement or tender process prior to awarding the Project.

The procedure to award the project is set out in the Decree of application of the BOT Law taken in Council of Ministers. Note that this Decree is also related to the formalities of publication, information, documentation and other aspects of the initiative and the conduct of the project.

Other procurement issues: are there any other procurement requirements in respect of the development of the Project, e.g. to source or favour labour, equipment or machinery from the country?

A legally established Project Company in Guinea is free:

  1. To import all goods, materials, tools, raw materials, consumables, finished products, semi-finished products and more equipments necessary for its activity.
  2. To identify and conduct its policy of production and marketing as well as its policy of hiring and dismissal of staff.
  3. To choose its suppliers

 (e) Power plants

(i) Power purchase agreement: is there a standard form of power purchase agreement used in the jurisdiction?

There is no standard form of power purchase agreement used in the jurisdiction. There has been an IPP in the jurisidction and it is likely that the form of PPA used in that project will be seen as a basis to be used for any other project.

(ii) Independent Power Projects: are there any IPPs in existence?

Please see “Legal and Regulatory Framework” section.

(iii) Merchant power: are there merchant power plants in the jurisdiction, and if so, are these plants allowed to (or obliged to) sell power back to the grid?

Privately owned power plants exist in Guinea and they are allowed to sell power back to the grid.

 (f) Consents required and authorisations from other ministries

(i) Key licences/consents: please list the key licences, permits or consents that are typically required by a project company for the design, finance, construction, operation and maintenance of a power plant.

The project will need to sign a BOT contract, to obtain environmental clearance and to obtain construction permits. It will also need visas for its personnel and import clearance for all goods and equipment.

(ii) Security: are these consents capable of being secured and are transferable to the lenders?

The rights (licenses, permits, and consents) arising from the BOT Convention are capable of being secured and are transferable to the lenders.

(iii) Process of application: please also provide details of all conditions applicable, specifying process, timing and costs for obtaining the consents.


 (g) Competition law

(i) Exclusivity: are any rights of exclusivity granted to a project company enforceable?

There is no special Law or regulation which grants exclusivity rights to a project company

(ii) Restrictions on competition: are there any restrictions on the ability of a project company to compete freely in the country?

There are no restrictions for the project to compete freely in the country; this principle is defined by the Law n*L/94/040/CTRN dated on 28th December 1994 related to the regulation of competition and the pricing with Its Decree of application n*D/94/PRG/SGG.

 (h) Environmental regulations

(i) Regulations: are there any environmental or health and safety regulations or legislation applicable to power plants?

The Ordinance n* 045/PRG/87 related to the Environmental Code of the Republic of Guinea regulates the environmental, health and safety for power plants.

(ii) Additional consents: are there any environmental licences, permits or consents that are required by a project company in relation to a Project? If so, please provide details of how / from whom these licences can be obtained as well as the timing and costs thereof.

The construction of power plant requires an authorization by joint Decree of the Ministry of Industry, Small and Medium companies and the Ministry of Environment, after a request of the owner or the operator of the construction.

The degree of environmental authorization depends on the hazard or the severity of damage that might result from the exploitation of the power plants (Ordinance n* 045/PRG/87 related to Environmental Code of the Republic of Guinea).

When the construction may affect the environment because of its size, the owner of the project, has to submit an Impact Study to the Ministry of Environment. This Impact Study assesses the direct and indirect impacts of the project on the ecological balance of Guinea and the quality of life for the people.

Finance and Tax matters

(a) Financial assistance

(i) Are there prohibitions or restrictions on the ability of a company to guarantee and/or give security to support borrowings incurred to finance the direct or indirect acquisition of shares of a project company; or any company which directly or indirectly owns shares in a project company; or shares in a sister subsidiary?

There are no prohibitions or restrictions on the ability of companies to guarantee and/or give security to support borrowings incurred to finance the direct or indirect acquisition of shares of a Project Company.

(b) Lending restrictions/banking monopolies

(i) Please indicate whether there are any restrictions or requirements applicable to the importation of capital by lenders to the Project.

There are no restrictions to the importation of capital by the lenders of the Project.

(ii) Is there a requirement for the lenders/security agent to be registered in the jurisdiction?

There is no requirement for the lenders/security to be registered in the Guinean jurisdiction.

(iii) Can foreign lenders lend into the jurisdiction?

Foreign lenders can lend into the Guinean jurisdiction.

(c) Restrictions relating to repatriation of dividends

(i) Are there any restrictions relating to repatriating dividends?

The Investment Code and the BOT Law permit the repatriation of dividends.

(d) Convertibility

(i) Are there any restrictions on the convertibility of the jurisdiction's currency?

There are no restrictions on the convertibility of the Guinean currency. The Instruction of the Bank of Guinea n*112/DGAEM/RCH/00 regulates the financial arrangements relating to transactions between the Republic of Guinea and foreign entities.

(e) Interest payments

(i) Are there any restrictions on the payment and compounding of interest? If so, does this also affect both local and foreign lenders?


(f) Tax

(i) Withholding tax: are there any withholding tax issues in relation to interest payments and fees to foreign lenders on loans used by a project company; payment of principal on debt; or payments received under any agreements (other than any referred to above)?

The BOT Law and the BOT Convention set up the withholding taxes on payment of interest, fees to foreign lenders on loans used by a project company, and fees on payment of principal on debt or payments received under any agreements.

(ii) Double taxation treaties: please note the existence of any double taxation treaties.

The Republic of Guinea has concluded a convention of non-double taxation with the Republic of France. This convention has been established to avoid double taxation and to set up the rules for mutual assistance in tax income, property, inheritance and donations.

(iii) Lender issues: are there any risks that lenders should be aware of in respect of tax liabilities/tax domiciliation as a result of providing debt to the project or project company and/or taking/enforcing security interests?

There are no risks the lenders should be aware in respect of tax liabilities and tax domiciliation. The Investment Code guarantees that foreign companies legally established in Guinea receive the same treatment as national companies relating to the rights and obligations in their activities.

(iv) Repayment and enforcement: please advise whether loan repayment / enforcement proceeds could be treated negatively from a tax perspective for the lenders.


(g) Stamping costs

(i) Please advise whether stamp duty or similar applies in respect of finance and security documents and security interests (and if so advise on the rate thereof), including the registration of immovable property or vehicles; security documentation; or transfer of assets on enforcement of security; or increase in share capital.

  1. Rights in corporate actions: For share capital and capital increase, the tax is based on the capital. The contribution varies from 0.5% to 2% on "bareme degressif par tranche".
  2. The transfer of movable and immovable properties, mortgage operations, incur stamp and registration fees from 0.5% to 10% of the value of the property depending on the operation.

Security, Enforcement and Insolvency

(a) Overview of security regime

(i) Nature of security: can a security interest be obtained over a company's assets, e.g.:

(A) accounts receivable (book debts): Pledge

(B) inventory (stock in trade): Pledge

(C) shares of a company (issued and authorised): Pledge

(D) equipment: Pledge

(E) real property: Mortgage

(F) insurances: Pledge

(G) project contracts: Cession or Pledge

(ii) Shares: can shares of a project company validly be pledged and enforced under an English law share charge?

Shares of commercial company are validly pledged and enforced under the Uniform Act of OHADA (Organization for the Harmonization of Business Law in Africa) on security.

(iii) Debt obligations: can a company grant a security interest in order to secure its obligations (i) as a borrower under a credit facility, and (ii) as a guarantor of the obligations of other borrowers and/or guarantors of obligations under a credit facility?

Yes. Enforceability and priority are subject to registration.

(iv) Revolving credit facility: if the borrowings to be secured are under a revolving credit facility, is there any special priority or other concerns?

There are no special laws or regulation relating to a revolving credit facility.

(v) Security agent/trustee: can the relevant security interests be granted to a security agent or trustee on behalf of the lenders from time to time under a credit facility agreement, where the identity of the lenders may change from time to time because of transfers (effected either by assignment or novation) by certain lenders of their interests in the credit facility? Are any steps required to ensure that a transferee of a lender will receive the benefit of the relevant security interests?

The Uniform Act of OHADA on security does not mention the concept of security trustee.

(vi) Preferred creditors: please indicate the claims that would have priority over the relevant security interests.

1. The rank following the liquidation of the immovable property is as follow (article 148 of the uniform act on security):

1.1. Court costs

1.2. Unpaid wages

1.3. Mortgages

1.4. General privileges subject to publicity

1.5. General privileges not subject to publicity

1.6. Unsecured creditors with an enforceable title

2. The rank following the liquidation of the movable property is as follows (article 149):

2.2. Court costs

2.3. Expenses incurred to hold the assests of the debtor

2.4. Unpaid Wages

2.5. Pledges

2.6. Pledges or privileges subject to publicity

2.7. Special privileges

2.8. General privileges not subject to publicity

2.9. Unsecured creditors with an enforceable title

(vii) Public registry: please confirm if there is a public registry that can be searched to confirm whether a project company has any security documents or any document dealing with any finance arrangement in place, such as guarantees, indemnities or suretyships given by or for the benefit of a project company.

Yes, at the register of trade and credit in Conakry.

(viii) Formalities: in connection with the creation of a security interest in shares or other assets:

(A) are any governmental or other consents or filings (consider exchange control and similar regulations, perfection, etc.) required;

Security interest must be made by deed or by private act duly recorded. This act is effective only if it is registered at the register of trade and credit (art 45-65-119 on security)

Pledge must, on pain of nullity, contain the following mention (art 70):

  1. Name and domicile of the creditor and debtor,
  2. Number of commercial matriculation at the register of trade
  3. Head office
  4. Description of objects subject to a pledge
  5. Amount of the claim
  6. Status of the debts and liabilities interests
  7. Election of domicile (registered address)

(B) are any other formalities (for example, notice to creditors, shareholder approvals, notarisations, etc.) required; and

Pledging of shares is not possible without the approval of the majority of shareholders, representing the

Corporate, Insurance and Employment matters

Corporate vehicle

(i) Project company incorporation:

(A) Type of vehicle: what is the most appropriate type of corporate vehicle for a project and can you describe its key features (e.g. limited liability, shareholding requirements, share capital requirements)?

The legal form of the company for the power generation sector is a "Societe Anonyme" (SA).

Its key features are:

  • Can be managed by one person or associated entity.
  • An SA may be administered by a Board of Directors from 3 to 12 members with a Managing Director.
  • An SA may also be administered by a single administrator, with combined power of Managing Director and Board Chairman.
  • Shares can be transferred, sold, or assigned by private treaty

(B) Thin capitalisation: are there any issues relating to thin capitalisation?


(C) Indigenous shareholdings

We have come across requirements in certain jurisdictions to have a specific percentage of shares in a project company held by nationals of the jurisdiction. Please advise whether any such requirements apply in the country. Please indicate any prescriptive requirements or limitations in respect of incorporating a special purpose company such as:

(I) Requirement for a certain amount of equity to be held by indigenous entities
There are no limits on shareholding by foreign investors. A Guinean "Societe Anonyme" may be 100% foreign owned.

(II) Thin capitalisation requirements
The minimum capital for S.A is Guinea Franc (GNF) 10,000,000 (approx of USD 10,000), with a minimum par value per share of GNF 10,000 (approx of USD 10).

(III) Can a limited liability company be established?
A limited liability company can be established as a "Societe a Responsabilite Limitee" (SARL). Note that an SA also has limited liability.

(IV) Is it possible to use a foreign company or a branch of a foreign company to act as Project Company?
There are in law, two suitable forms for establishing a company for foreigners which are: a creation of a S.A under Guinean law (see above), or an opening of a branch of a foreign company. A creation of a branch is not appropriate for this kind of project.

(D) What is the estimated timescale for incorporation in the country? Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for incorporation is 40 days. The fees payable to governmental authorities to create an S.A is GNF 100,000 (approx USD 100) for companies.

(a) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes, a private company is free to lend and/or issue guarantees, under the Uniform Act of OHADA adopted on 17 April 1997 on the organization of security. But the company may not advance funds, grant loans or provide a security for the subscription or purchase of own shares (article 639 of the Uniform Act of OHADA).

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on dividend distribution; but rather an obligation. The Uniform Act of OHADA adopted on 17 April 1997 on the companies act provides in its article 146, that the payment of the dividend must be made within a maximum period of nine months after the close of the annual accounting period.

(b) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Article 7 of Ordinance No. 003/PRG/SGG/88, on 28 January 1988 establishing the Labor Code provides that, in order to hire foreign workers, an "authorization" from the "Department of National Employment and Manpower". This will be subject to conditions determined by ministerial decree.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

See above (i)


(a) Land registry: is there a land registry (or similar) in the country that can be searched to confirm whether a project company has granted of any mortgage, charge, option assignment, lien or other encumbrance over the whole or part of the properties or assets of a company?

Yes, there is a land registry in the country that can be searched and contains all information relating to land. A "land plan" can be found for each local authority, urban municipality or rural community development (article 3 to 6 of the Land and Domanial Code).

(b) Landlord's rights: please indicate whether there are any rights which accrue to the landlord (or the government or any other bodies) that may override the terms of a land lease or threaten the rights of a project company particularly any right of repossession or acquisition.

The Government may invalidate the terms of a lease in public interest legally established ( expropriation for public purpose, regulation of property rights for the purpose of town planning, rural development, research and mining environmental protection and enactment of easements of public utility)(article 54 of the Land and Domanial code and article 534 of the civil code).*

(c) Direct agreement: are you aware as to whether a direct agreement in respect of a lease has been previously been provided to lenders on other transactions?

We are not aware if a direct agreement in respect of a lease has been previously provided to lender on other transactions

(d) Forfeiture rights: do relief from forfeiture rights exist and would the lenders be entitled to rely on such rights?

Regarding the expropriation for public interest, no waiver may be made.

(e) Legislative requirements: is there any additional legislation governing property rights? If so, please advise the nature of the requirements thereof.

Property rights are governed by the Land and Domanial Code.

The additional legislation governing property rights is contained in the civil code, and the Fundamental Law (revised by decree D/2002/48/PRG/SGG on 2002_07_15 promulgating the Constitution Law adopted by referendum on 2001/10/11). Both of them guarantee the right of property and state that nobody may be expropriated except in the public interest legally established.

(f) Enforcement formalities: are there any formalities with which lenders need to comply when enforcing security over land?

Lenders need to comply with the Land and Domanial Code for the formalities of enforcement of security over land.

International law and arbitration

(a) Supra-national treaties

(i) Please list the Bilateral Investment Treaties to which the country is party.

Guinea has Bilateral Investment treaties with Lebanon, Mali and France.

(ii) Please confirm whether the country is a signatory to the Energy Charter Treaty.

The Republic of Guinea is signatory of the Convention of the African Commission of Energy.
Guinea is also member of the International Renewable Energies Agency (IRNEA).

(b) Arbitration

(i) Please advise any requirements and restrictions applicable to the choice of arbitration roles and place of arbitration etc.

The OHADA Uniform Act of Arbitration regulations adopted on 11th March 1999 sets up the requirements and restrictions applicable to the choice of arbitration roles and place of arbitration.

(ii) Please confirm whether foreign arbitral awards / decisions are enforceable in the country (i.e. is the country a party to the New York Convention on the Recognition of Foreign Arbitral Awards)?

Guinea is a party to the 1958 New York Convention.

Renewable Energy

(a) Legislation: please confirm whether the country has enacted any legislation specifically designed to promote and enable the development of renewable energy projects.

No legislation on the promotion and development of renewable energy projects has been enacted.

(b) Kyoto Protocol: please confirm whether the country is a signatory to the Kyoto Protocol.

Guinea is a signatory to the Kyoto protocol. The country has ratified the protocol on 2000/09/07.


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