10 Things to know about PPPs in Senegal

Geni & Kebe in Dakar look at public-private partnerships (PPP) in Senegal

Private-public partnerships (PPP) are being given deserved attention in Senegal. With the ever increasing focus of investors on the African continent, this article looks at 10 things to know about why PPPs are gaining momentum in this country on the westernmost tip of Africa.

1. Public-private partnerships are the “Main pillar of the Plan Senegal Emergent”

The Plan Senegal Emergent (PSE) is the country’s strategic plan for development and economic growth over the next decade. The PSE aims to position the country as an economic and infrastructure hub for West Africa in agro-industry, energy, construction, logistics, mining, road and rail-road transportation and tourism. The PSE envisages the private sector as a key partner in achieving these goals, placing PPPs in the center of the strategic planning.

2. There is a solid legal and regulatory framework to support PPPs in Senegal

With the aim of unrolling a number of ambitious projects through a PPP model, the Government of Senegal has put in place a solid legal and regulatory framework (including Decree 09/2014 of February 2014 on Partnership Agreements). There is also a Ministry of Investment Promotion and Partnership, a National PPP Committee and a PPP Unit.

3. PPPs are only limited by your imagination!

A common initial reaction to PPPs is that it is a model to be used for infrastructure projects – roads and ports and power stations. However, the Senegalese Government envisages – and has created enabling legislation for – PPPs in diverse sectors such as agriculture, education and health. Planned PPPs for which the government is currently seeking investment include an iron ore mine, the development of tourist sites and agriculture projects, alongside more traditional PPP projects like construction of government universities and the creation of a seawater desalination unit.

4. The business environment is improving

Thanks to amendments to commercial procedure laws in 2014, Senegal leaped 10 places in the World Bank’s Ease of Doing Business ranking in 2015.

5. The government is ready to engage

To raise interest in financing these projects, the government of Senegal is holding the Senegal Public Private Partnerships Project Financing Forum on 5-7 May 2015. This event, hosted by AMETrade, will bring together potential investors, development partners, private sector and government representatives to discuss opportunities. The forum will also include site visits to some of Senegal’s completed PPP projects.

6. There is support to ensure parties come to the table well informed

Before the Senegal Public Private Partnerships Project Financing Forum, a pre-conference workshop on legal tools related to PPP will be held on 4 May 2015. The aim of this session is to train the representatives of both private and public sectors in the legal framework of PPPs in Senegal. Additionally, the Senegal Bar has organized a one day seminar on Financing Projects through PPP. Presenters include Dr Aboubacar Fall, who spent four years as a member of the World Bank’s Public-Private Infrastructure Advisory Facility (PPIAF) Technical Advisory Panel and Mr Abdou Diaw the PPP Director at the Senegal Investment Agency (APIX).

7. Senegal has a good track record of PPPs

PPPs are not new to Senegal and the positive experience of both governments and investors create a good environment for future investment (as will no doubt be attested to in the Senegal Public Private Partnerships Project Financing Forum mentioned above!). Good experiences with this genre of transaction have led to the development of sensible laws to support future investment.

8. Be alert to differing expectations

PPPs often involve a melting pot of parties; Senegal is a French speaking country regulated under Senegalese civil law, whilst investors may speak a different language and be familiar with principles of common law or other legal systems. PPP parties need to work collaboratively to ensure that there is a common platform for the agreement and that expectations about the deal and the governing jurisdiction are understood clearly.

9. Donors are interested

Transparency and accountability in the PPP projects will be promoted by donor interest in this space. For example, the World Bank is looking at funding a PPP consultant to provide advice and reduce risk in PPP projects.

10. There are powerful ethical grounds to think about investing in Senegal

If making a tangible difference with your investment is a driver, then investors can be assured that PPPs in Senegal have a positive impact on the wellbeing of some of the world’s poorest people. Senegal is ranked 163 out of 187 countries on the UN’s Human Development Index. This puts it in the category of “low human development”. Large scale PPP projects can improve access to services and increase economic opportunities for the country’s population. Geni & Kebe recently acted for Jindal Power in a $900 million power plant PPP, to develop, finance, insure, own, operate and maintain a 350MW coal powered power plant that sells energy to the state electricity company’s electricity grid. This is the largest power project ever in the country, and with improved electricity supply, Senegalese can look forward to being able to engage more fully in economic, political and social life.