Understanding Power Project Financing

February 22, 2016 - February 26, 2016
Cover - Understanding Power Project Financing
Cover - Understanding Power Project Financing

Understanding Power Project Financing

In February 2016, CLDP (in partnership with the African Legal Support Facility) again brought together a group of world-class experts to draft the second handbook in Power Africa's "Understanding" series, Understanding Power Project Financing . This new handbook is intended to provide decision-makers with an overview of the structuring of private investments and financing for power projects and insight into the important supporting role that governments play. The project financing handbook was drafted using the same Book Sprint method as the first Power Africa handbook, which allowed our diverse group of contributors from African governments, development banks, private banks and leading international law firms, all whom contributed their time on a pro-bono basis, to complete the handbook in only five days. Version 1.1 of the handbook is available here in both PDF and EPUB format. The French version of the handbook is available here in PDF. The handbook is published under the Creative Commons License. Please contact Mohamed Badissy with any questions regarding the handbook. Photos from the drafting workshop can be found here and a blog posting by BookSprints on the event can be found here.

Background

As part of the global focus on increase access to power, in 2013, U.S. President Barack Obama launched Power Africa to bring together technical and legal experts, the private sector, and governments from around the world to work in partnership to increase the number of people with access to power in Sub-Saharan Africa. Over the past 3 years, Power Africa has grown into a coordinated network of over 120 public and private sector partners working together toward adding 30,000 MW of new electricity generation and reaching 60 million new homes and businesses in Sub-Saharan Africa. A key pillar of Power Africa’s approach entails building the requisite capacity and understanding to help generate a sustainable Power sector in Sub-Saharan Africa and to more readily attract private capital to develop necessary power infrastructure.

As part of Power Africa's broad coalition of implementing partners, CLDP has worked alongside African governments and private sector stakeholders to improve the environment for private investment in power projects in the African market. In November 2014, CLDP (in partnership with the African Legal Support Facility) published the first in a series of handbook focused on best practices for negotiating Power Purchase Agreements. That handbook, Understanding Power Purchase Agreements, was the culmination of months of consultations and was drafted by a group of experts from African governments, development banks, private banks and leading international law firms. The reception for Understanding Power Purchase Agreements has been overwhelmingly positive, with over 15,000 copies distributed in print and numerous Power Africa partner governments using the handbook as a reference guide for PPA negotiations.

In working with African governments to adopt the first Power Africa handbook, CLDP received additional requests to prepare reference materials on other challenges to power project development on the continent. The most common request was to prepare a reference guide as a complement to the PPA handbook that would lay out the financing arrangements for private power projects. In response to this request, CLDP again partnered with the Africa Legal Support Facility to conduct consultations on the best practices of power project financing. The culmination of those consultations is the newly published handbook titled Understanding Power Project Financing, an overview of the structuring of private investment in and private financing of power projects. 

Authors

The following is a list of authors who contributed to Understanding Power Project Financing (in alphabetical order):

  • Mohamed Badissy, Attorney Advisor (International), U.S. Department of Commerce (United States)
  • Lucy Chege, General Manager – Infrastructure Finance (Energy, Environment, PPPs), Development Bank of Southern Africa (South Africa)
  • Patrick M. Dougherty, Senior Counsel, The World Bank (United States)
  • Alex Evans, Deputy Associate General Counsel - SME Finance, Overseas Private Investment Corporation (United States)
  • Nnaemeka Ewelukwa, General Counsel and Company Secretary, Nigerian Bulk Electricity Trading Plc (Nigeria)
  • Jay Govender, Director – Projects and Infrastructure, Cliffe Dekker Hofmeyr Inc. (South Africa)
  • Tony Iskarpatyoti, Vice President, Nexant, Inc. (United States)
  • Vibhuti Jain, Senior Project Finance Advisor, USAID/Power Africa (United States/South Africa)
  • Ryan T. Ketchum, Partner, Hunton & Williams LLP  (United Kingdom)
  • Rhoda Limbani Mshana, Principal Results Specialist, African Development Bank (Côte D'Ivoire)
  • Subha Nagarajan, Managing Director – Africa, Overseas Private Investment Corporation (United States)
  • Toyin Ojo, Senior Legal Counsel, African Legal Support Facility (Côte D'Ivoire)
  • Dozie Okpalaobieri, Energy Adviser, Ministry of Finance (Nigeria)
  • Franca Sandham, Power & Infrastructure Finance, Investec Bank Limited (South Africa)
  • Kaushik Ray, Partner, Trinity International LLP (United Kingdom)
  • Tim Scales, Partner, Allen & Overy LLP  (United Kingdom)
  • Amir Shaikh, Chief Legal Counsel, African Legal Support Facility (Côte D'Ivoire)
  • Neil van Niekerk, Managing Director and Head – Africa Project & Export Finance, Standard Chartered Bank (South Africa)

Upcoming Programs

October 17, 2018 - October 18, 2018

On November 17-18, CLDP, in cooperation with the Saudi Center for Commercial Arbitration (SCCA), initiated an SCCA-sanctioned alternative dispute resolution (ADR) training course for future female commercial mediation and arbitration lawyers. The ADR course is part of SCCA’s goal to certify up to 60 female mediators and arbitrators to manage cases brought to the SCCA in the coming two years. The ADR Course was envisioned after the successful implementation of a pilot women’s workshop on “Negotiations and Mediation” that was conducted by CLDP in December of 2017. The two-day program engaged participants in a series of intensive ADR simulations guided by an expert from UNCITRAL alongside the region’s top Arab female ADR specialists.

CLDP in Action

September 24, 2018 - September 25, 2018

On September 24-25, in Manama, CLDP led a workshop and focus group on government tendering in cooperation with the Bahrain Ministry of Industry, Commerce and Tourism (MOICT), Bahrain Chamber of Commerce and Industry, the American Chamber of Commerce in Bahrain, Bahrain Businesswomen Society and several government contracting agencies. The workshop focused on Bahrain’s recent reforms to promote set-aside programs for small- and medium-sized enterprises (SMEs). Such programs aim to set aside a set percentage of public contracts to be awarded exclusively to SMEs. The workshop was the fourth meeting led by CLDP and MOICT, and largely focused on electronic procurement mechanisms and online registry to move forward on the pilot program to promote the use of SMEs in public procurement. In implementing the pilot program, MOICT has considered incorporating many of CLDP’s recommendations, including creating a small business oversight body, online registration system, and online advertising platforms that are similar. While the pilot program is expected to be launched in early 2019 for three government agencies, CLDP expects to continue to provide technical assistance on SME procurement reform to help make small business set-aside programs a reality.

Read More about Bahrain: CLDP Leads Workshop to Implement Procurement Reforms to Promote SMEs