Africa Infrastructure Investment Conference

1. Africa Infrastructure Investment Conference Angola Business Opportunities Economy,Infrastructure and Industry July 18-19 2013 Presentation by: Maria Luísa Abrantes, PhD Chair and CEO of ANIP

2. ANIP – Angolan National Private Investment Agency • ANIP is the only government entity responsible for the execution of the national policy on private investment, its promotion, evaluation, approval and monitoring.

3. Angola • Geographical location data : West Coast of Southern Africa • Area: 1,246,700 km² • Maritime Frontier: 1,650 km (Atlantic Ocean) • Land Frontier: 4,837 km (Democratic Republic of Congo, Zambia and Namibia) • Climate: Tropical • Average Temperature : 30ºC (max) 17ºC (min) • Inhabitants: 20,900,000 (projection) • Capital: Luanda (more than 5,000,000 inhabitants) • Administrative Division: 18 Provinces • Main Ports: Lobito, Luanda and Namibe

4. Angola • Main Rivers: Kwanza, Cunene and Cubango • Highest Point: Moco Hill (2,620m) in Huambo • Main Beaches: Ilha do Cabo, Palmeirinhas and Mussulo in Luanda; BaíaAzul, Cota and • Caotinha (Benguela); Restinga (Lobito); Miragens, Azul (Namibe) • Language: Portuguese (official), plus diverse local dialects, such as Umbundu, • Kimbundu, Kikongo, Fiote and Chokwé • Main Religions: Catholic and Protestant • Currency: Kwanza (AKZ) • Head of State: The President, José Eduardo dos Santos • Government: Democracy led by MPLA

5. Introduction • Angola is strategically located on the Atlantic Coast of West • Africa, acting as a gateway to Southern and Central Africa by road and railroad networks. • Angola holds approximately 12% of Africa’s hydrographic network and 7.4 million ha of arable land. • Angola is one of the fastest growing economies in the world, anticipating a GDP of 7.1% in 2013. • From 2002 to 2008, average GDP stood at 15.3%. • From 2000 to 2012, average GDP stood at 8%. • The IMF has stated that Angola’s governance and accountability are good.

6. As recommended by the IMF, international revenue reserves stand at over USD 30 billion, helping to stabilize the inflation rate of Angola’s currency, the Kwanza. • The Angolan government’s main goals are to revamp and develop the economy by diversification, prioritizing the rehabilitation and construction of basic infrastructure, to enable the flow of people and goods, as a result of private investment in agriculture, agri-business, industry and fisheries. • The main target is to reduce poverty and regional asymmetries.

7. From 2000 to 2011, the Angolan government invested an average of USD 4.7 billion per year in order to rehabilitate infrastructure. • From 2013 to 2017 the government plans to spend an average of USD 1,4 billion per year to rehabilitate infrastructure. • From 2002 to 2012 the Government rehabilitated 11 Airports and is currently constructing the new Luanda International Airport extending over an area of 1,324 hectares, having also rehabilitated 7,829 km of roads, 2,000 km of railroads and 552 bridges. • Five damns were rehabilitated, namely: • Mabubas, Gove • Matala, Lomaúm • Capanda (1st phase).

8. What are the Advantages of Investing in Angola? • Angola owns one of the greatest hydrographical network in all of Africa; and its main rivers are Kwanza, Zaire, Cunene and Cubango • Rich in flora and fauna • Diverse mineral ores : diamonds, iron, gold, phosphates, manganese, copper, lead, zinc, tin, wolfram, tungsten/vanadium, titanium, chrome, beryllium, kaolin, quartz, gypsum, marble, granite and uranium • 7.4 million hectares of arable land and pastures, from which less than 3% are cultivated • Political and economic stability since 2002 • Angola is member of MIGA- Multilateral, Investment Garanty Agency From the World Bank.

9. MacroeconomicIndicators GDP (2012): USD 114,14 billion GDP per Capita (2012): USD 6,200 per year Source: http://www.minfin.gv.ao/docs/dspOrcaCorren.htm

10. TheMainCommercialPartnersof Angola Source: https://www.cia.gov/library/publications/the-world-factbook/

11. Investments Distribution Foreign Direct Investment in Angola (2012) USD 115.5 billion Foreign Angolan Direct Investment (2012) USD 8.196 billion Source: https://www.cia.gov/library/publications/the-world-factbook/

12. Angola Needs • Rehabilitation and construction of basic infrastructures • Development of the network of water and energy • Construction and reconstruction of roads, bridges, railways, ports and airports • Modernization and increase agricultural production • Creating jobs through the implementation of new industries

13. Incentives are Given to Priority Areas

15. Transfer of Dividends

16. In Zone C the subcontracts could also be eligible for tax exemption and reduction. The tax incentive is granted after the implementation of the project and at least 90% of the estimated work force being in place. The reduction in the percentage of the rate of tax may not exceed 50%.

17. Tax Incentives • Tax incentives and benefits do not constitute a rule. • They are not granted automatically or for an indeterminate period of time. • When considering the proportion and scaling of tax and customs incentives and benefits to be granted, criteria must take into account: a) The type and value of investment. b) The investment’s insertion into the country’s economic development strategy. c) Perception of direct and indirect capital gains. d) Complexity of investment. e) Estimated time required for a return on capital. f) Type of technology to be utilized. g) Commitment to reinvestment of profits. h) Volume of goods or services to be produced. i) Creation of production lines.

18. Tax Incentives • Tax incentives or tax reductions are granted after negotiation on a case-by-case basis. • An extraordinary tax incentive could be granted to: a) Investments declared highly relevant for strategic development. b) Investments capable of creating at least 500 jobs. c) Investments capable of contributing to a major boost in technological innovation and scientific research. d) Annual exports that could exceed USD 50 million. e) Investment projects evaluated at above USD 50 million.

19. Infrastructure Sector July 17-19, 2013 Presentation by: Maria Luísa Abrantes, PhD Chair and CEO of ANIP

20. 1. The Transportation Sector

21. Strategy • -Privatization, so that resources managed by the state could be transferred to the private sector. • -Integration of Angolan transportation network into the SADC network. • - Creation of authorities on an institutional level for the planning of road network. • Creation of public institutes as regulatory bodies for different transportation subsectors. • - Development of the three main corridors, originating from ports, by regenerating rail companies. • - Revamping and modernizing ports and the shipping sector, bringing in private enterprise and appropriate management to re-establish the competitiveness of national companies. • - Institutional reorganization and strengthening.

22. Areas of Investment • Road Transportation • -Interprovincial and intermunicipal passenger transportation. • - Medium and long haul transportation of goods. • Rail Transportation • - State ownership and operation, through the CFL, CFB and CFM. • -Open to private investment in the concession process, arrangement of funds, technical assistance and repairs, and supply of rolling stock, communications, etc. • The government has approved a preliminary study, called “Ango Ferro”, to refurbish, upgrade, construct and extend the whole of Angola’s rail network.

23. Areas of Investment • Corridors • - Malange, Lobito and Namibe. • The government believes that these three corridors warrant the same degree of priority, constituting an open area in which both public and private investment can operate, since they act as a support for the development of the national economy, access to the sea for land-locked countries, and stimulate regional development. • Ports • - Open to private investment in the concession process, arrangement of funds, technical assistance, supply of equipment, communications, etc. • - Leasing port: Luanda. • Operating ports: Lobito, Namibe, Cabinda, Soyo and Porto Amboim.

24. Rehabilitated Airports

25. 2. The Power Sector

26. Short-Term Projects Production • Rehabilitation and upgrade of production capacity of hydroelectric power plants (Cambambe and Gove) • Construction of mini- hydroelectric plants (Chiumbe-Dala, in Moxico) • Installation of gas turbines in Cabinda, Namibe, Dundo, Xagongo and Ondjiva Distribution • Rehabilitation of the transportation and distribution network (Luena, Ndalatando, Malanje, Menongue and Soyo) • Completion of Capanda-Luanda lines • Interconnection of Northern, Central and Southern electrical system • Connection of the city of Uíge to the Northern system • Electrification of urban centers • Extending of electrification to rural areas (solar village project )

27. Medium-Term Projects • Completion of works on Cambambe (960 MW) and Laúca (2,000 MW) dams • Construction of new hydroelectric power plants on the Kwanza river (Caculo-Cabaça) • Increase in national generation capacity, by 2025, taking it from 1,000 MW to 9,000 MW (essentially for hydro and natural gas resources ) • Boosting of renewable energies • Beneficial utilization of other endogenous resources, which can take on a complemental role • Construction of large hydroelectric and natural gas combined cycle power plants

28. Energy Production Projects • Natural Gas • Soyo power plant (2015): fired by LNG. Investment of USD 2.5 billion, with a capacity of 750 MW. • Wind • Wind farm in Tombwa: the Namibe area boasts the most wind potential (5.2 m/second). • Hybrid system (100 MW of wind power, solar - 4.2 MW, and thermal - 2 MV). • Solar • Solar Village Project : solar panels in rural communities (1st phase: 18 villages, 2nd phase: 42 communes). • Biomass • Project A: Beneficial utilization of central plateau forestry resources, along the Benguela railroad trajectory . • Project B: Production of energy through combustion of solid waste.

29. Currently Operating Power Plants Source: Ministry of Energy & Water

30. Total Production Costs (USD/MWh) Source: Ministry of Energy & Water - Master Plan 2012 - 2016

31. 3. The Water Sector

32. Angola ranks second in Africa when it comes to water resources, with abundant rainfall in almost all the country. • In 60% of Angola an average annual rainfall of some 1,000 mm is recorded. • Only 42.6% of the population (59.1% rural and 23.4% urban) has access to potable water. • 59.6% of the population (59.1% rural and 23.4% urban) has access to piped water • It is worthwhile to see the cities’ infrastructure, stretching grids, water treatment, supply and sewage system.

33. Dam Capacities (MW) Source: Ministry of Energy & Water

34. Goals to be Achieved • “Water for All” Program (USD 650 million): to cover 80% of the water supply in rural areas. • Construction of 5,000 new points and rehabilitation of 2,000 fountains. • Provision of a per-capita minimum of 40 liters/day (fountains) and 70 liters/day (household water connections). • Provide the 21 major hydrographic basins (43% of national territory) with integrated water resource management plans. • In 2015, 20 million people will have access to sanitation, raising the proportion of people to 59% in rural areas and 81% in urban ones.

35. The Biopio and Chicapa dams need to be rebuilt. • A regional project for the Okavango River will cover an area of 323 square kilometers. • 94.5% of the volume of water lies in Angola, with 2.9% in Namibia and 2.6% in Botswana.

36. 4. The Telecommunications Sector

37. Delimitation by law of sectors • Law Nº 5/02 of April 16, 2002. • Absolute Reserve of the State: Basic telecommunications network. • Relative Reserve of the State: Telecommunications services for public use. and Economic activities liable to be engaged in by entities not belonging to the public sector, by way of a concession agreement. • Challenges • Increase competition in telephony market. • Improve internet services offer and universalize it. • Improve corporate segment offer. • Develop national and international backbone. • Regulate pay-tv duopoly.

38. Major Liberalized Market Operators • Cellular Telephony Business: UNITEL and MOVICEL. • Landline Service Licenses: Mercury (Sonangol Subsidiary), Nexus, Wezacom and Mundo Startel. • Data Communication Licenses: Multitel and ACS. • Ten authorized ISPs.

39. Business Opportunities in The Industrial Sector

40. 1. Agro-Industries

41. Advantagens • Internal market potential; • Agrarian potential due to 3 million hectares of arable land; • Favorable climatic conditions; • Genetic biodiversity; • Environment without a polluted atmosphere or soil; • Existence of abundant water; More irrigated areas: Bengo, Cabinda, Luanda and Huíla. Major Crops: Tubers, cereals and fruits.

42. GovernmentPrograms • Promotionofagro-business: • Agro-industrialhubs • Cofeeand Palm Oildevelopmentprogrammes • Constructionandrehabilitationofinfrastructure in irrigatedareaswarehousesans silos • Research anddevelopment • Training

43. 2. Manufacturing Sector

44. Priority Industries • Agro-industries; • Foodstuff Industry • Milling Industry • Beverage industry, • Packaging industry; • Tanning and Pelt industry • Textile Industry; • Paper industry; • Rubber industry; • Electrical equipment industry; • Chemical industry; • Light metal and metal products; • Construction material; • Automotive industry;

45. 2013 – 2017 Goals • Provide support for competitive substitution of imports and promotion of exports through incentive systems and the temporary protection of emerging industries; • Provide support for rural economy; • Produce more studies and/or programs for the launch of more substantial industrial investments; • Increase natural resources value chain; • Upgrade existing industrial equipment and promote the monitoring of industrial structure; • Promote industrial development at regional level, underpinning it on industrial development hubs and special economic zones; • Regulate restructuring, legal and privatization issues related to Industrial Companies; • Increase institutional capacity in industrial sector and support for the development of country ‘s private sector and social groups; • Improve quality-control process in industry.

46. Subprograms to Support Industrial Development Infrastructure projects, for setting up Industrial plants, with the construction of roads, sidewalks, sewerage systems, installation of water, electricity, telecommunications and firefighting systems in the Industrial development centers of: • Viana • Bom Jesus • Lucala • Fútila • Catumbela • Caála

47. Subprograms to Support Industrial Development (cont.) Projects for the construction of industrial parks in some of the industrial development centers planned for the country: • Uíge • Soyo • Dondo • Kunje • Matala Preparation of feasibility studies focusing on launching the basic infrastructure needed to construct the Kassinga industrial development hub. Institutionalization and ongoing creation of infrastructure, with the construction of sidewalks, sewerage systems, water, electricity, telecommunications, and firefighting systems in the special economic zone of Luanda - Bengo

48. 3. Mining Sector

49. Independent mining activity has been limited to diamonds and, on a smaller scale, to the extraction of marble and granite. • Angola has numerous mineral deposit, including: • Diamonds; Iron; • Gold; Phosphates; • Manganese; Copper • Lead; Zinc; • Wolfram; Uranium • Tungsten/Vanadium; • Titanium; Chrome; • Tin; Beryllium; • Quartz; Gypsum • Marble; Granite;

50. Public Private Partnership PPP are allowed following the appropriated legislation.