Public-private partnerships (PPPs) help Guinea grow
Public-private partnerships (PPPs) constitute one of the central strategies deployed by nations in need of significant and urgent development, but lacking the public funds required. In the West African nation of Guinea, PPPs help do everything from transform the country’s infrastructure to support it in successfully responding to one of the biggest health challenges of the 21th century.
Guinea is an ideal location for the inception of public-private partnerships. Because of its natural mineral wealth, including bauxite and iron ore, Guinea has the potential to be one of the richest countries in the African continent. Yet a tumultuous past of military regimes, rebel incursions, ethnic clashes and most recently the devastating impact of the deadly disease Ebola has left Guinea ill-placed to both benefit from its own natural resources and drive its own development forward. Public-private partnerships, however, are helping Guinea finally unlock its potential.
The history of PPPs in Guinea
Recognising how public-private partnerships could help drive its economy forward, in 1998, Guinea created what have become known as the “BOT” frameworks, planned to enable Guinea to work with private investors in PPPs on a “Build, Operate, Transfer” basis, which gives a private company the right to develop and operate a given facility for a limited period. However, this regulatory framework for PPPs was never properly instigated, no such projects under these terms took off, and Guinea continued to struggle to attract investors for public-private partnerships under auspices of BOT.
However, since then, some PPPs have begun to flourish in Guinea. The International Finance Company (IFC) for example, was hired to help improve operations at Guinea’s national power utility Electricité de Guinée (EDG). As a result, the consortium Veolia-Seureca won a bid for a 4-year performance-based management contract, and a PPP agreement was signed in June 2014. As part of this public-private partnership, EDG was provided with expert staff and improved infrastructure to help drive improvements in its operational performance. It is expected that by the end of the PPP contract, almost 300,000 households in Guinea will be enjoying improved services and the overall quality and reliability of power services in Guinea will have considerably improved.
In addition, Abu Dhabi Ports have worked with Guinea on the Conakry Port Container Terminal PPP, a public-private partnership that will transport the port capacity of Guinea, while the China International Water & Electric Corp has instigated a public-private partnership with Guinea – the 550MW Souapiti hydropower public-private partnership – that once complete will nearly double the country’s power supply and, as Guinea’s Minister of Energy Cheick Taliby Sylla put it “allow Guinea to be an energy exporter.”
Rusal’s PPPs in Guinea
One country that has a long-standing relationship with Guinea in the area of PPPs is the Russian aluminium company Rusal. Having operated in the country for more than a decade, it is now the country’s largest employer and a natural collaborator for the government of Guinea when it is seeking investors to work with on developing public-private partnerships.
In 2014, for example, Rusal and the government of Guinea launched the Dian-Dian public-private partnership, paving the way for mining at the world’s largest bauxite deposit. As part of the project, significant investment is to be made in infrastructure projects such as railway and port development. As is the case with any well-executed PPP, the project can be a “win-win” for both Rusal and the Guinean government, according to Rusal CEO Vladislav Soloviev.
While the attraction of working with Guinea on public-private partnerships is obvious for a mining business, this is not the only area in which Rusal has initiated public-private partnerships in Guinea.
Between late 2013 and early 2014, the deadly West African Ebola epidemic began to spread through Guinea like wildfire. While many private investors backed away from Guinea, Rusal did quite the opposite. As part of a PPP with the government of Guinea, Rusal began the construction of what is now the Centre for Epidemic Microbiological Research and Treatment (CEMRT). A case study in how PPPs can be deployed even in emergency situations, CEMRT was built in just 50 days and quickly became a pivotal part of Guinea’s fightback against Ebola. The CEMRT is one of the main sites at which research into an Ebola vaccine took place.
The speed of this particular public-private partnership between Guinea and Rusal helped the country in containing the Ebola crisis and developing strategies to prevent its spread in the future was truly breath-taking and proof of the power of PPPs.
The CEMRT PPP continues to be at the forefront of medical innovation in the country. In February 2017, it was announced that under the auspices of this public-private partnership between Rusal and Guinea, a new, one-of-a-kind laboratory for combatting highly infectious diseases would be opened at the CEMRT. In August 2017, Rusal and the Ministry of Health of the Russian Federation announced over a thousand volunteers would receive the now-authorized GamEvac-Combi vaccine in a study hosted by the CEMRT. The vaccine is the product of another public-private partnership between Rusal and the Russian government.
In light of such success, Guinea is quite understandably planning to make public-private partnerships an integral part of its future development strategy.
The future for public-private partnerships in Guinea
On 4th July 2017, the Guinean parliament unanimously adopted a new law on PPPs, which repealed the existing BOT law on public-private partnerships of 1998. The new PPP law covers the two main areas in which PPPs tend to operate: those with payment by the end-user (like utilities) and those where payment must come from the public purse (like hospitals).
In total, the Guinean government is seeking assistance from the private sector for at least 36 major infrastructure projects. As part of the 2016-2020 National Plan for Economic and Social Development, the government in Guinea has dedicated US$5.5 billion budget to implement infrastructure public-private partnerships between 2016 and 2020.
Undoubtedly, the new PPP law in Guinea is step in the right direction, providing more secure, legal, regulatory and institutional frameworks for public-private partnerships in the country.
If the new PPP law is completed with the specific decree required, this will make Guinea a much more attractive prospect for foreign investors considering beginning public-private partnerships in the country and help it to use its huge natural resources to propel the country into the next stage of its development.