Private Solutions for Infrastructure in Angola

156 Pages·2005·4.17 MB·English

by  The World Bank

A C O U N T R Y F R A M E W O R K R E P O R T
Private SSolutions
for IInfrastructure
in AAngola
PUBLIC-PRIVATE
INFRASTRUCTURE
ADVISORY FACILITY
THE WORLD BANK

Private Solutions
for Infrastructure
in Angola

Private Solutions
for Infrastructure
in Angola
A Country Framework Report
The Public-Private Infrastructure Advisory Facility
and the World Bank Group
© 2005 The findings,interpretations,and conclusions expressed herein are those of
The International Bank for Reconstruction the author(s) and do not necessarily reflect the views of the Board of Execu-
and Development/
tive Directors of the World Bank or the governments they represent.
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Cover photos:Josef Hadar/World Bank (top);José Martins,consultant team
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ISBN 0-8213-6017-5
Library of Congress Cataloging-in-Publication Data has been applied for.
Contents
Acronyms and Abbreviations ix
Acknowledgments xi
Executive Summary 1
1. Introduction 11
Study Goal 11
2. Country Context and Role of PPI 13
Economic and Political Setting 13
Infrastructure in Angola 15
Potential Role of Private Participation in Infrastructure 16
Critical Importance of Independent Regulation 17
Advantages of PPI and Range of Possible Forms 18
PPI Investor Criteria 19
3. Crosscutting Issues 21
Economic Environment 21
Legal and Regulatory Environment 26
4. Electricity and Gas 38
Introduction to the Electricity Sector 38
Key Organizations 38
Legal and Regulatory Framework 39
Current Situation in the Electricity Sector 40
PPI Opportunities in Electricity 45
Identification of Barriers to PPI in Electricity 49
Introduction to the Gas Sector 52
Gas Sector Structure 52
Legal and Regulatory Issues 53
Current Situation in the Gas Sector 53
Future PPI Opportunities 55
Conclusions on Gas 56
5. Water and Sanitation 59
Introduction 59
Legal and Regulatory Framework for the Water Sector 59
Water Sector Structure 60
v
Contents
Current Situation in the Urban Sector 61
Water Supply and Sanitation in Rural Centers 64
PPI Opportunities 65
PPI Constraints—Water and Sanitation 70
Solid Waste Collection in Luanda 70
6. Transport 75
Roads and Highways—Organizations 75
Legal and Regulatory Framework 75
Roads and Highways—Current Situation 75
PPI Opportunities in Roads 76
PPI Barriers in Roads and Highways 78
Railways—Sector Structure and Key Organizations 79
Legal and Regulatory Framework 79
Railways—Current Situation 80
PPI Opportunities in Railways 82
PPI Barriers in Railways 83
Ports—Sector Structure and Key Organizations 84
Legal and Regulatory Framework 84
Ports Sector—Current Situation 84
PPI Opportunities in Ports 85
PPI Barriers in Ports 87
Airports—Sector Structure and Key Organizations 87
Legal and Regulatory Framework 87
Airports Sector—Current Situation 87
PPI Opportunities in Airports 89
PPI Barriers in Airports 90
7. Telecommunications 91
Scope of Sector 91
Key Organizations and Sector Structure 92
Legal and Regulatory Framework 93
Current Situation in the Sector 95
PPI Opportunities in Telecommunications 100
Identification of PPI Barriers 100
8. Promoting PPI:Key Measures and Recommendations 102
Crosscutting Issues 102
Electricity 105
Water,Sanitation,and Solid Waste 109
Transport 113
Telecommunications 115
Appendixes
AppendixA: Independent Regulation 121
Appendix B: Multi-Utility Regulator 123
Appendix C: Targeting Subsidies 125
Appendix D: Power Plants 129
Appendix E: Telecommunications White Paper
Privatization Steps 131
Appendix F: Telecommunications Sector Liberalization 132
Appendix G: Angola Telecom Sales 133
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Contents
Appendix H: PPI Approval and Post-Approval Issues 135
Appendix I: Angola Power Sector (Map) 137
Appendix J: Angola Water Sector (Map) 138
Appendix K: Angola Transport Sector Potential PPI
Opportunities (Map) 139
Appendix L: Angola Telecommunications Sector
Proposed Development of Transmission
Backbone (Map) 140
Figures
2.1 Forms of PPI 18
3.1 Approval Process for Investments
(US$ 100,000 to US$ 5 million) 35
3.2 Approval Process for Investments
(US$ 5 million to US$ 50 million) 35
3.3 Contractual Regime 36
3.4 Post-approval Process 36
4.1 Power Sector Institutions 39
5.1 Institutional Arrangements for PPI in Urban Water
in Mozambique 67
6.1 Road Network in Angola 76
6.2 Port of Luanda Performance 84
6.3 Port of Luanda Forecasts 85
7.1 Growth in Sales of AT by Service 98
Tables
1.1 PPI Investor Criteria 3
2.1 Educational Expenditures 14
2.2 Main Economic Indicators 14
2.3 SADC Infrastructure Indicators 15
2.4 PPI Experience in Angola 16
2.5 PPI Investor Criteria 19
2.6 Increasing Requirements for Satisfaction
of PPI Criteria 20
3.1 Provisions of Law on Tax and Customs Incentives
for Private Investment 24
3.2 Main Legal Instruments Relevant to PPI Investors 27
3.3 Infrastructure Sector Legal Instruments 28
4.1 Key Energy Statistics 41
4.2 Forecast Growth in Generation,2006–2016 41
4.3 ENE’s Power Generation Capacity 42
4.4 ENE Rehabilitation Investment Plan 43
4.5 Low Voltage Electricity Tariffs 43
4.6 EDEL Profit/Loss 2001 44
4.7 ENE Profit/Loss 2000 44
4.8 PPI Constraints in Electricity 51
5.1 PPI Constraints in Water and Sanitation 71
6.1 Road Network by Type 76
6.2 Rail Rolling Stock by Company 81
6.3 Operating and Financial Data by Rail Company 81
6.4 Operating and Financial Statistics of Angolan Ports,2001 85
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Contents
6.5 Main Airport Network 88
6.6 Airport Passengers and Cargo Traffic,2000 88
7.1 Telecommunications Act 93
7.2 Forecast of Fixed and Mobile Markets 96
7.3 SADC Countries:Comparative Teledensity 97
7.4 Estimate for Active Mobile Customers 99
8.1 Recommendations:Crosscutting Issues 104
8.2 Recommendations:Electricity 108
8.3 Recommendations:Water and Sanitation 110
8.4 Recommendations:Transport 116
8.5 Recommendations:Telecommunications 119
A1.1 Safeguards to Ensure “Independence” 122
C1.1 Designing Incentive Structures 126
C1.2 Structuring Subsidy Flows 127
C1.3 Contract Procurement 127
D1.1 Hydro Power Plants in Angola 129
D1.2 Thermal Power Plants in Angola 130
E1.1 Privatization Steps Proposed in the Telecommunications
White Paper 131
F1.1 Preparation for Liberalization 132
F1.2 MCT Strategies and Liberalization 132
G1.1 Angola Telecom Sales 133
G1.2 Angola Telecom UTT Sales 134
Boxes
3.1 Infrastructure Political Risk Factors of Concern to PPI Investors 22
3.2 Improved Accounting and Fiscal Discipline in Public Enterprises 22
3.3 Angolan Taxation Policy and Levels 23
3.4 Concessionary Finance for Infrastructure Investments 25
4.1 Electricity Supply in Huambo 47
4.2 Guatemala:Large-Scale Rural Electricity Implementation 48
4.3 Cambodia:Small Rural Electricity Enterprises 49
5.1 Luanda’s Chafarizes 63
5.2 Technologies to Provide Different Levels
of Water Supply Service 66
5.3 PPI to Disseminate Alternative Water Delivery Technologies 68
5.4 Community Involvement in Solid Waste Management
in Luanda 72
6.1 Private Sector Involvement in Road Maintenance
and Construction in Mozambique 79
6.2 Recent Trends in Private Participation in Port Facilities 86
6.3 Recent Trends in Private Participation in the Airport Sector 90
H1.1 Legal Fees and Registration 135
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