CEDA Presentation Role of PPPs, JV Partnerships, in fast tracking FDI attraction and growth of exports by Botswana as well as financing and JV Partnerships

Overview Public Private Partnerships Defined Public Private Partnerships – Exclusions Attractiveness of Botswana Infrastructure Francistown City Council Objectives FCC PPP Pipeline Projects - Opportunities Importance of JVs Associated Risks of JVs Key Players

Public Private Partnerships Defined Public Private Partnerships (“PPPs”) are (as defined by World Bank): –Between the public and private sectors –Includes the provision services that fall under the responsibilities of the public sector that are provided by the private sector –With a clear agreement on shared objectives for delivery of public infrastructure and / or public services Utility Restructuring Corporatization Decentralisation Civil Works / Service Contracts Management & Operating Contracts Leases Affermag e Concession s BOT Projects DBO s JV / Partial Divesture of Public Assets Full Divesture LowHigh Extent of Private Sector Participation

Public Private Partnerships - Exclusions PPPs typically do not include –Service contracts or –Turnkey construction contracts These are deemed public procurement projects, or the privatization of utilities where there is a limited on-going role for the public sector

Risk / Reward Attractiveness of Botswana Infrastructure Sector in SSA for DFI SSA INFRASTRUCTURE RISK REWARD RATINGS Industry Rewards Country Reward Reward Industry Risks Country Risk Risks Infrastructure Risks R/R Regional Ranking Botswana Ghana South Africa Namibia Zambia Kenya Tanzania Mozambique Nigeria Cameroon Angola Uganda Cote d'Ivoire Zimbabwe Gabo n Sudan & South Sudan Regional Average

Francistown City Council Objectives  Vision 2022 highlights that Francistown aims to be a vibrant Investment Centre  The FCC has since formed a company that will be going into business partnerships  The FCC has created partnerships focus on Local Economic Development (LED) with the following:  Genk City in Belgium  City of Taiwan in China  Daven Port - USA  Bulawayo in Zimbabwe

FCC PPP Pipeline Projects  The city owns a number of plots that its aims to develop through LED partnerships  The City intends to consider the following business opportunities:  Downstream road development from the Tonota-Francistown road ( e.g. parking facilities-metered parking  Transport and logistics (e.g. shuttles )  Mining(explorations indicate large coal reserves around Francistown)  Green electricity production  Compacting the city to curb land shortage (PPP)  Infrastructural development to handle expected increase in flow of international freight upon completion of the Kazungula bridge.  Francistown has water advantage but limited land and the City plans to liberate growth of Francistown into the Central district

Importance of JVs  Foster accelerated growth  Access to funding  Access to new markets and new distribution networks  Greater profit potential  Increased productivity  Increased capacity  Increased risk and cost sharing  Access to greater resources  Flexibility in terms of areas covered by the JV

Associated Risks to JVs  Divergent goals between partners  Communication: objectives not clearly communicated by both partners could result in challenges to the partnership later on  Imbalance in the levels of expertise & investments  Differing cultures and management styles  Disputes  Insufficient leadership and support in the early stages of the JVs  External market factors  Changing needs / requirements in markets

Key Facilitators within the PPP Sector Municipal authorities Funding partners – Commercial Banks, Development Funding Institutions, Institutional Investors Regulatory Authorities – Ministries, NBFIRA, Competition Authority, BOBS

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