8/13/2019 Azito Case

1/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

1

Public Private Partnerships

A Case Study

Azito Energie, Cte dIvoire

8/13/2019 Azito Case

2/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

2

Project Concept: GOCIs implementation of liberlization measures in the

context of the Strategic Framework defined by the

Structural Adjustment Program of the Energy sector

implemented in the early 80s.

Electricity distribution assigned to CIE under a concession

First IPP Contract negotiated and signed with CIPREL

Second IPP agreement signed with Azito Energie

8/13/2019 Azito Case

3/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

3

Project Description

Phase I involved the construction of 144 MW gas

powered turbine (Completed on schedule in 1999)

Phase II involved the construction of the second 144 MW Gas

powered turbine (Completed on schedule in 2000)

PS: Although out the scope of the Azito Energie project, Phase

III was planned to be launched in 2002 to be on-stream by 2004.

Project was completed on schedule and within the budget

limits for a total project cost of USD 215 million.

8/13/2019 Azito Case

4/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

4

Project Objectives:

Ensure equilibrium between Electricity Supply and agrowing Domestic Demand and Exports commitments

between the GOCI and

Ghana, Togo and Benin (Eastern interconnection);

Burkina Fasso (Nothern interconnection) and Mali at

a later stage.

8/13/2019 Azito Case

5/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

5

The underlying assumption of the reform was to establish and

maintain financial equilibrium of the Electricity Sub-sector

The GOCI undertook to return VAT collected to the system

and provide natural gas to Azito Energie free of charge.

However , it should be noted that the issue of VATis still

pending.

8/13/2019 Azito Case

6/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

6

The intitutional Framework in the Electricity Sub Sector:

Exchange Rate of January 2004

The institutional framework was defined in line with the strategic framework through thecreation of

ANARE

Agence Nationale de Rgulation du sous-secteur Electrique

SOPIE

Socit dopration ivoirienne dlectricit

SOGEPSocit de gestion du patrimoine du secteur de llectricit

8/13/2019 Azito Case

7/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

7

Findings of the SER

Despite the reform process implemented by the GOCI,

the legal and institutional framework is stillcharacterized by:

Some confusion on the role of various agencies and

the lack of clearly defined responsibilities of each

agency in the decisio-making process.

It should be noted that the FNEE which was expected to

manage the cash flows of the sub-sector has beendismantled and its role is currently assured by SOGEP.

8/13/2019 Azito Case

8/10

8/13/2019 Azito Case

9/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

9

Prospects The GOCI has initiated discussions with Azito Energy

for the implementation of Phase III (Combined Cycleturbine)

As per CIE, in order to achieve financial equilibrium

in the sub-sector, a 40% tariff increase would be noted.

The GOCI had to subsidize the sub-sector in 2006 and

2007 in order to help the sub-sector

The GOCI has decided to put a Fcfa 30 billion cap on

its subsidies for the cost of natural gas used in the

production of electricity A 10% tariff increase has also been agreed upon

8/13/2019 Azito Case

10/10

PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT

10

An agreement has been reached between

the GOCI and CIE in order to liquidate

current arrears between CIE and the State

In 2007, the GOCI decided to implement an

energy saving programs.

Discussions have been initiated to assessthe the long-term viability of the use of

natural gas for the generation of electricity.