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 (d) Procurement

Angola

(i) Procurement or tender process

According to the General Law of Electricity, the approval and award of licences and concessions require the projects to be submitted to prior public hearing, including local authorities, social organizations and the entities that may be affected by the activities subject to licensing or concession. The award of concessions shall be preceded by a public tender.

(ii) Other specific procurement requirements

There are legislative provisions promoting the use of labour local.

Guinea

(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

Ivory Coast

(i) Procurement or tender process

The process of tendering private sector power projects is subject to Decree No. 2005-110 of 24th February 2005 on Public Tenders.

(ii) Other specific procurement requirements

The Investment Code sets out the procurement requirements for the development of a project. The power project has to employ Ivorian managers, supervisors and other workers as far as possible, and provide professional training to ensure the development of the local staff.

Kenya

(i) Procurement or tender process

Kenya has a centralised form of Government which controls the decision making process for all of Kenya's eight provinces. The responsibility of ensuring that Kenyans have access to sources of energy is bestowed upon the Ministry of Energy. Power generation is no longer a monopoly as there are a number of IPPs operating in Kenya. The ERC is the regulatory body established by the Energy Act that grants the licences available under the Act.

The Government involvement depending on whether it is a petroleum project or electricity project could be from the Ministry of Energy, the ERC, NEMA, WRMA and the relevant Local Authority which become involved under the Physical Planning Act, the Public Health Act and the issuing of Single Business Permits.

The ERC is in charge of regulating the petroleum and electricity sectors and ERC's mandate extends to related products, renewable energy and other forms of energy. It also ensures that the interests of the consumers are protected and maintains fair competition in the market. Moreover, the ERC is expected to prepare a national energy plan. It should be noted that since the Energy Act has been enacted relatively recently there is some overlap of powers between the Ministry of Energy and the ERC. Some licensing powers are still held by the Ministry while others by the ERC.

The ERC currently has a model PPA advertised on its website. The said PPA would generally form the basis of any PPA to be entered into with a Kenyan entity.

The Energy Act expressly provides that the ERC shall be an independent body however the Commissioners of the ERC are made up of people appointed by the President of Kenya and the Minister for Energy and the ERC's funding is controlled by the Government therefore there is a perception that the regulator is not as independent as it perceived to be.

(ii) Other specific procurement requirements

Please contact us for specific questions.

Madagascar

(i) Procurement process or tender process

If the license or concession is awarded by international tender, the Government must follow and respect the rules 2004-009 dated on 26th July 2004 related to "Public Tenders".

(ii) Other specific procurement requirements

There are no rules stating that equipment or machinery must be purchased locally. Foreign labour may be employed subject to efforts to source staff locally as describe in the Employment Code (law 2003-044 dated on 28th July 2004).

Mali

(i) Procurement or tender process

The process to award a project depends on the size of the Project and, in particular, the amount of power to be generated by the power project.

For projects generating between 50kW and up to 250kW the authorisation of production and distribution of electricity is granted by decision of the Minister of Energy. It is issued after a consultation of all the Ministries concerned with the power project, with the representative of the "collectivites locales" in the place of the installation of the project.

For projects generating over 350kW and for hydroelectric projects, that is, concessions, the Ministry of Energy is responsible for the tender and it approves applications with the CREE. The Ministry of Energy will have the draft concession approved by the Counsel of Ministers by Decree.

The Ministry of Environment approves the Environmental Impact Assessment and issues the Environmental permit to allow the power plant to operate.

(ii) Other specific procurement requirements

The Malian Investment Code has been established to create domestic employment and to give qualification training to national manpower. The Concession determines the conditions of procurement of labour, and equipment or machinery.

Mauritius

(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.

Other than the application to the CEB for an appropriate license there is no procurement or tender process to be undertaken.

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

There are no such requirements.

Morocco

(i) Procurement or tender process

Generally, a tender process is organized prior awarding the Project.

(ii) Other specific procurement requirements

There are no specific procurement requirements.

Mozambique

(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.

Pursuant to the law, Power Production, Transport, Distribution and/or Trading Concession Licenses are awarded by means of public tender. The authorities with licensing powers set out above are responsible for the call for applications for such purpose. The bids are then evaluated by both the relevant authority which has called for applications and the CNELEC.

(ii) 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?

Yes.

As a previous note, and the investment approval secures certain incentives / benefits such as (i) hire foreign workers in excess of the quota regime set forth in the labour legislation, (ii) import/re-export the equipment required, (iii) obtain customs duties exemptions.  Such benefits shall impact on procurement requirements in connection with such matters as follows:

Labour

As a rule, the Labour Law foreign workers may only be hired under certain circumstances mentioned therein. Investment projects duly approved by CPI may provide a specific hiring regime by setting forth a different percentage for the quota regime or other specific rules for expatriate labour purposes. Please see further below.

Equipment

In principle, companies operating in Mozambique may only benefit from CPI’s benefits in connection with equipment’s import and customs duties exemption where such equipment is not available in Mozambique. Moreover, imported items shall be duly imported into Mozambique, notably by complying with temporary import regime or with the specific import regime set out in CPI’s approval, if applicable.

Moreover, the Regulations on Procurement for Public Works, Supply of Goods and Provisions of Services to the State sets forth that public works contracts and the acquisition of goods or services shall be allocated by means of a public tender. The regulations also set out specific principles for allocation issues including (i) stability, (ii) competition, and (iii) good financial management.

The project company is required to comply with the abovementioned requirements.

Niger

(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 conditions and requirements of the tender of process to award the concession of production, transportation, and of electricity by the Ministry of Mine and Energy are set up by a directive of the ARM and the Decree n°2004-266/PRN/MM/E dated on 14th of September 2004 (see above).

(ii) 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?  

The Nigerian Investment Code (see above) sets up the procurement process for a Power project. The company applying to be eligible under the Investment Code has to commit to:

  1. Give priority to employ nationals in Niger and present a training program and ongoing development for the staff. 
  2. Use priority materials, raw materials, products and services of Nigerian origin.

Nigeria

(i) Procurement or tender process

The EPSRA does not provide for a procurement or tender process for commencing an IPP. Further to the EPSRA, a person wishing to obtain licenses for the generation and distribution of electricity is required to make an application to the NERC attaching necessary documents attached containing sufficient evidence to satisfy NERC of the financial and technical capacity of the applicant.

Please note however, in respect of the National Integrated Power Project ("NIPP") which the Federal Government through the Ministry of Power and Steel has recently commenced, contracts for GTSODT operations must be awarded through the Tenders Board established under the Public Procurement Act of 2007.

The Federal Government's objective under the NIPP is the design, manufacture and supply of seven new gas turbine power plants with provision for conversion to combined-cycle operation.

(ii) Other specific procurement requirements

The terms and conditions of the issuance of a license may include a requirement that the licensee enters into agreements on specified terms with other persons for the provision of or use of electric lines and associated equipment operated by the licensee, or to purchase power and other resources in an economical and transparent manner. In addition, the Government is currently implementing a local content policy which favours the procurement of manpower, equipment and materials from Nigeria especially in the energy sector, although there is presently no express stipulation of the applicability of the same to the power sector.

South Africa

(i) Procurement or tender process

South Africa has a very developed and detailed legislative framework in respect of procurement by any of the 3 tiers of the State and any organ of state or state owned entity. The legislative framework has its foundation in the Constitution of the Republic of South Africa ("Constitution") and the requirements of the Constitution are echoed in a number of pieces of legislation that are applicable in the power sector, such as the Public Finance Management Act ("PFMA"), Municipal Finance Management Act ("MFMA") and ERA. The case law in this area is well developed. Attention must be paid early on in a project to the procurement legislation as contracts with organs of state, state owned enterprises and various levels of the State have been struck down by the high court and the constitutional court on the basis that the award of such contract or contracts has failed to comply with the procurement legislation.

(ii) Other specific procurement requirements

Eskom has reached agreement with DTI that it does not have to participate in the NIPP and instead has Competitive Supplier Development Programme ("CSDP"), which involves "procuring in such a way as to increase the competitiveness, capacity and capability of the local supply base, where there are comparative advantages and potential competitive advantages of local supply". Again, these requirements are individually negotiated in respect of each transaction.

Tanzania

(i) Procurement or tender process:

Tanesco as a public entity is required to procure and dispose of goods, works and services in accordance with public procurement legislation.

Tanesco is required to have a tender board for procurement of goods, services and works and cannot award any contract unless the award has been approved by the tender board.

Tanesco is required to use open tendering or, in certain specified circumstances, may use any one of the alternative procedures provided under the public procurement legislation. The alternative procurement procedures are set out in the public procurement legislation. These include restricted tendering and direct procurement.

(ii) Other specific procurement issues

The basic principles of the public procurement legislation are that the procurement must be conducted in a manner to maximise competition and achieve economy efficiency, transparency and value for money. This must be by competitive tendering except where exemptions are provided, such as:

(A) contractors have already been pre-qualified;

(B) there is an urgent need;

(C) there is need to achieve certain social objectives by calling for the participation of the local communities;

(D) there is only one particular contractor which a procuring entity can reasonably expect to undertake the required works;

(E) there is an invitation for tenders for a single contractor to take responsibility for the supply and installation of all goods and for the workers required for a project, provided that the procuring entity will remain responsible for the design and engineering;

(F) the estimated value of works does not exceed the limit prescribed;

(G) there are advantages to a procuring entity in using a particular contractor who has undertaken or is undertaking similar works or who may have already been mobilised with plant, equipment and staff in the vicinity of the project; and

(H) where works already and satisfactorily under execution are to be extended, and the corresponding contract had been awarded following national or international competitive tendering satisfactory to the tender board.

(I) There are other specific rules for PPPs including that the procuring entity shall not proceed with the procurement phase of a PPP or private sector participation project if the feasibility study indicates that the proposed project will not provide value for money or improve the quality of the public service.

Uganda

(i) Procurement or tender process

According to the Electricity Act, 1999 and the Public Procurement and Disposal of Public Assets Act, there must be a public procurement process where the project is initiated by the Government. However this does not preclude a party from individually applying for a licence for a project where it has identified the project on its own.

(ii) Other specific procurement requirements

The salient procurement issues are that the procurement must comply with the principles of non discrimination, transparency, accountability, fairness and competition.

Zambia

(i) Procurement or tender process

The PP Act passed in August 2009, established the Public Procurement Authority ("PPA") as the regulatory body responsible for overseeing the grant of contracts and to ensure the transparency and efficiency of the procurement process. All procurement will be conducted through procurement entities and procurement committees in the relevant institutions, the institution in the case of the Project being MOEWD. It should be noted that the PP Act provides in the second schedule that for the next two years from the commencement date of the PP Act, the PPA's powers will be exercised by the Central Tender Committee, an organ of the PPA, to allow the PPA to ensure that the relevant procurement entities have the necessary capacities to conduct tenders. Hence the PPA will oversee the procurement entity within the MOEWD under the procedure envisaged by the PP Act. OPPPI have confirmed to us that they are the relevant procurement entity within MOEWD.

(ii) Other specific procurement requirements

There appears to be some overlap between the roles of the PPA under the PP Act and the recently commenced the Public Private Partnership Act 2009 which is also expected to govern the procurement of infrastructure facilities and Public-Private-Partnership (“PPP”) arrangements under the PPP Commission. Under the PPP Act the Minister of Finance is expected to give prior written approval to any contracting authority for the competitive selection process. Which approval from the Minister of Finance is subject to the following being carried out:

  • production of a feasibility study;
  • production of a project proposal; and
  • production of draft Concession Agreement.

Under the PPP Act the Minister of Finance is also expected to issue a Statutory Instrument establishing the procurement  rules for the competitive selection process for infrastructure projects, which has not yet been issued yet.

 

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