AFRICAPROJECT NEWSLETTER

©Copyright AFRICA PROJECT ACCESS/MARCHES TROPICAUX ET MEDITERRANEENS

NO 119 MARCH 2006

Africa Project Access

Marches Tropicaux

P.O. BOX 2048

HOUGHTON

JOHANNESBURG

2041: (27 11) 465 6770

Fax : (27 11) 465 9580

e-mail : afric.projs.co.za

IN THIS EDITION

1

Africa Project Newsletter Editorial 1

The Fourth Edition (2004) of

“Brief Guide: Aid Agencies, International Development Finance Institutions, Donor Agencies and Relief Supply Organisations”

produced by Africa Project Access Whitehouse & Associates

is available.

(Contact Africa Project Access at Johannesburg 27 11 4656770 or cell 0823247005 for details on how to obtain copies)

China in Africa

Update on Project Activity in Sub-Saharan Africa

The following are some observations on China’s increasing Project and Project-related activities in Sub-Saharan Africa as derived from recent inserts extracted from our Africa Project Database.

The two sub-Saharan African countries that have seen a particularly strong increase in Chinese Project participation in recent times are Angola and Nigeria. These are of course, Africa’s strongest oil producers and China is resources-hungry. This is why in the oil sector, other producing nations such as the Sudan, Equatorial Guinea and Cameroon have also been targeted. In the mining sector, the well endowed Zambia and Gabon are among those that feature prominently. Initiatives relating to infrastructure, telecommunications, industry and agriculture appear to be instruments to bolster the overall plan for greater access to much-needed resources.

In Angola, the establishment of a USD 2 billion credit line from the Eximbank of China has placed Chinese suppliers in an advantageous position. There are numerous recent Projects, some of which are particularly high profile. The China International Fund should be reconstructing the entire 1 303-kilometre Benguela Rail Line. The work will last until 2007. This includes rehabilitation and modernisation of the stations. An important announcement was that of interest expressed by SINOPEC and CITIC in the planned Lobito Oil Refinery. Chinahas negotiated a USD 560 million loan to Angola for the construction of a new airport in Luanda. One third of the total financial requirement will be from the Angolan government and two-thirds from China.

In Nigeria, there has been much emphasis on telecommunications. China is engaged in the planning of a major Rural Telecommunications Programme. Huawei Technologies from China has manifested its interest in the national utility, NITEL. Chinese suppliers are positioning themselves to supply into these Programmes and ZTE Corporation is establishing a handset manufacturing plantin Nigeria. Huawei Technologies will be installing CDMA4500 wireless technology for its rural telephony Programme.

Chinese oil and mining interests have been establishing themselves over the past few years. The country’s abovementioned involvement in Nigeria underpins its participation in the Akpo Oil Field. There are reports of possible Chinese involvement in the Onshore Oil Exploration Programme. The abovementioned Lobito Oil Refinery in Angola is a highly sought contract.

Outside of Angola and Nigeria, China’s participation in the oil sectors is growing. Its presence in the Sudan is already firmly entrenched but it is increasing its activities through further Projects. China Petrochemical (Sinopec) and the China National Petroleum Corporation (CNPC) are planning to join forces for acquisition of Sudan’s oil drilling rights. Sinopec is positioning itself for the new oil refinery in Port Sudan. New operations include a block off Mauritania, oil exploration contracts with the Republic of the Congo and Cameroon, and access to a new block off Equatorial Guinea. Chinese companies are involved in oil prospecting in Niger.

March 2006 Page 1

Africa Project Newsletter Editorial 1

China’s mining interests in Zambia are being strengthened. Recent Projects include the rehabilitation of the Chambishi Copper Mine. In Gabon, the activities are more recent and are focused on iron ore. China National Machinery and Equipment Import and Export Corporation (CMEC) will be in charge of infrastructure construction for the Belinga Iron Ore Project in the northeast of Gabon. In the far southwest, the Chinese mining company, Wanbao Mining has received authorisation to prospect for iron oreat Milingui in Nyanga. Milingui has estimated reserves of 187 megatons at 37,5% content.

Gabon is a good example of a case where China is offering infrastructure to support its resources interests.In the case of the Belinga Project,CMEC will be responsible for the construction of a deepwater port north of Libreville, a 250-kilometre rail line and two hydropower plants to feed the envisaged plant. In the Nyanga region, a nearby river will facilitate a hydropower plant to feed the operation. A 100-kilometre rail line should be built from Tchibanga to Mayumba and the Chinese plan to build a deepwater port at Mayumba for export of the ore to China.

A good percentage of the country’s non-resource sector Projects are to be found in resource-rich countries: power plants in Nigeria and Cameroon, an important road Project in Equatorial Guinea, roads in Cameroon, the abovementioned new airport in Angola, housing Programmes in Gabon etc.

China is also growing its profile outside of the ‘resources countries’. One of the most significant Projects in which it is involved is the 600-metre RovumaRiverBridgelinking northern Mozambique with southern Tanzania. China Geo Engineering Corporation should soon begin construction of the ‘Bridge of Unity’ that has been conceptualised over many years by previous heads of state of the two countries. India has been particularly active in rail Projects but China has also manifested strong interest in this sector. Chinese companies are jockeying for position in East Africa with regard to the Kenya Railways concession and in particular, the Mombasa-Kampala concession. China Railway First Group Company Limited has been short-listed for the latter.

Apart from the rail sector, China has historically developed a reputation in Africa for its sports stadia and agriculture Projects. The Chinese group, Shanxiis constructing the Palais des Sportscomplex in Yaounde, Cameroon. There are numerous agricultural Programmes and agri-business Projects being led by Chinese specialists. There is for example, the Agriculture Sector Programme in Nigeria and a Maize Production Programme in Zimbabwe. Chinese finance and expertise is being utilised for the rehabilitation and relaunch of the abattoir in Ouagadougou, Burkina Faso. A fertilizer plant involving the national oil utility, PETROCI as the Promoter and CNTIC of China as the major participants has been long-mooted.

Other areas of activity are water and sanitation, health. Industrial Projects are important too. China has agreed on funding of 2,6 billion CFA or about 4 million Euros for a feasibility study for a cement plant in the Central African Republic. Chinese agencies are contributing to the establishment of a new industrial areaat Diamniadio, several kilometres from Dakar, Senegal. The abovementioned handset manufacturing plant in Nigeria is a further example of China’s industrial involvement.

March 2006 Page 2

Africa Project Newsletter Additional Services for Subscribers

ADDITIONAL SERVICES FOR SUBSCRIBERS &

ACTIVITIES OF AFRICA PROJECT ACCESS

Paul Runge of Africa Project Access has recently been appointed Chairperson of the SACOB AFRICA PROJECTS PROGRAMME. The next address will be on the findings and initiatives from the EU-SADC Light Engineering Forum that was held recently in Mauritius. Contact Pam Murray at the Johannesburg office of the South African Chamber of Business for details regarding Africa Project briefings. Telephone 27 11 4463800. e-mail:

Africa Project Access and Pretoria-based Emerging Market Focus will be organising a special AFRICA GROUP VISITS PROGRAMME for 2004. The draft Programme/Schedule is as follows (Dates will now be ascertained according to client requirements):

  • 2006
  • COPPERBELT, ZAMBIA & DR CONGO
  • GULF OF GUINEA
  • WORLD BANK AND IFC, WASHINGTON
  • AFRICAN DEVELOPMENT BANK, TUNIS

Please contact Carine at Emerging Market Focus at 27 (0)12 4272171

More AFRICA BRIEFINGS will take place at Gordon Institute of Business Science (GIBS), Illovo, Johannesburg as planned by the France-South African Chamber of Commerce and Industry in Johannesburg. A very comprehensive briefing on ZAMBIAwas recently held in Johannesburg. This included an address by the Chief Operating Officer of Equinox Minerals, Harry Michael on the Lumwana Copper Project.

Arrangements are being made for the following briefings:

  • ZambeziValley
  • CEMAC/Oil & Gas, Central Africa

(Please contact the Chamber, telephone Johannesburg 27 11 4422425 regarding bookings and confirmations.)

Our Paris-based, French-language partner, Marches Tropicaux has produced features on EXPORT CREDIT INSURANCE, CAMEROONandthe HORN OF AFRICA. Africa Project Access subscribers who can read French are welcome to contact us 27 (0)11 465 6770 for further information.

The latest quarterly edition of the South Africa-based publication, Traders carries reports on ANGOLA(an analysis after 30 years of independence), and analyses of current CHINA-AFRICA RELATIONS. Africa Project Access will also be contributing the new PROJECTS PAGES that provide an update on the latest Projects and Project-related initiatives in sub-Saharan Africa.

March 2006 Page 3

Africa Project Newsletter Projects

PROJECTS

(Africa Project Access subscribers are welcome to contact Paul or Karen at Johannesburg telephone 27 11 4656770, fax 27 11 4659580, cell 0826510707,

e-mail:

for templates/further details/contacts pertaining to specific Projects listed below)

ANGOLA

According to Severino Cardoso, Director: Exploration at Sonangol, work has already started on the SOYO LIQUEFIED NATURAL GAS PROJECT. Gas will be fed from Blocs 0 and 14 as well as the Congo Basin wells. A new subsidiary, Sonangas has been created for effective gas utilisation. The intention is to stop gas flaring by 2008. The Project is an integrated gas utilisation Project involving Sonangol and partners.

There are four major oil sub-basins in Angolan territory: Congo, Kwanza, Benguela and Namibe. The Congo Basin is the most prolific, Benguela has significant oil shows and Namibe is yet to be explored. Each basin has components: onshore, shallow water, deep water and ultra deep water. The intention is to further develop the onshore and ultra deep water components. The KWANZA OIL BLOC is viewed by Sonangol as the best new opportunity and there is a desire to develop the Kwanza onshore concessions.

BOTSWANA

Botswana, South Africa and Zimbabwe have reserves of COAL BED METHANE GAS but according to specialists, Botswana has the largest reserve. Studies are underway to determine the specific size of the deposits and to ascertain commercial viability.

BENIN

The first outlet of the KORA SUPERMARKET CHAIN has been inaugurated in Cotonou. The Kora hypermarket covers 5 000 square metres, has 45 boutiques and 150 secure parking bays. The cost of construction was about 3 billion CFA. The objective is to establish ‘mini’ Koras in other parts of the country. The Director General of Kora is Guy Lepointre. The promoter is presidential candidate, Severin Adjovi who is reportedly also considering a brewery at Ouidah that will require an investment of 7 billion CFA.

BURKINA FASO

The mining company, Riverstone Resources has been awarded four new GOLD EXPLORATION PERMITS in the Bissa-Gonglou zone situated 100 kilometres north of Ouagadougou. Reserves are estimated at 1,37 million tons with 36,33 grams per ton.

The Government has received approval from its financial partners and Donors for the construction of the SAMANDENI DAM in the west of the country. Construction should commence at the end of 2006. The final agreement has been reached with the Donors that include The Kuwaiti Fund, The Abudhabi Fund, the OPEC Fund, and the Islamic Development Bank. This will be the country’s third largest dam after Ziga and Bagre. The capital requirement is CFA 181,3billion or about USD348million. The dam will boost agricultural production and will provide additional electricity. The first phase of the Project will be dedicated to the Dam, the hydropower plant and the completion of technical studies.

March 2006 Page 4

Africa Project Newsletter Projects

CAMEROON

The privatisation of the agriculture utility, the CAMEROON DEVELOPMENT CORPORATION (CDC) is subject to new developments following over four years of delay. It employs some 11 000. The Ministry of Economy and Finance will be calling for offers from private consultants to advise on the process. The privatisation has been troubled by disputes from foreign investors as well as from local populations.

The following are major INFRASTRUCTURE PROJECTS currently underway in Cameroon:

  • Construction of the Dshang-Melong Road (4,4 billion CFA)
  • Construction of the bridge over the Ntem River (1 billion CFA)
  • Construction of the Ayos-Bonis Road (10,9 billion CFA)
  • Construction of the Yaounde-Kribi Road (2,2 billion CFA)
  • Construction of the Ngaoundere-Touboro-Chad frontier Road (15 billion CFA)
  • Rehabilitation of the Yaounde-Ayos Road (3,4 billion CFA)
  • Rehabilitation of the Wouri Bridge (3,1 billion CFA)
  • Rehabilitation of the RN% Loum-Nkongsamba Road (2,4 billion CFA)
  • Rural Electrification Programme (1,5 billion CFA)
  • Urban and Rural Drinking Water Supply Programmes (2 billion CFA).

The following are some of the major Projects and Initiatives being undertaken by CHINA in Cameroon:

  • Oil Exploration: China National Petroleum Corporation (CNPC), China Petroleum and Chemical Corporation (Sinopec)
  • Gas: China National Oil and Gas Exploration and Development Corporation (CNODC)
  • Roads: China Road and Bridge Corporation (CRBC)
  • Also bridges, the Lagbo Dam, Palais des Congres, Palais des Sports
  • Industrial: moped manufacturing plant at Kribi
  • Agricultural: rice, cotton, mango and manioc processing. Agricultural mechanisation.

The French oil independent Perenco has signed a contract with the national oil utility for the exploitation of NATURAL GAS in the country’s territorial waters. The potential is estimated at 300billion cubic metres. This is the first contract of this nature in Cameroon. Operations will begin in 2007 and will be aimed at feeding gas to the gas thermal power plant which the Government and AES Sonel of the USA intends constructing at Kribi on the coast. The value of the Perenco gas Project is about USD50million. The Project entails two wells at two platforms and the insulation of pipelines.

The Urban Authority of the City of Douala (Communaute Urbaine de Douala), are engaged in a number of Projects for the IMPROVEMENT OF DOUALA CITY. These include:

  • The Joss Road Exchange
  • Doubling of the lanes for the Boulevard de Besseke
  • Improvement of traffic control on the Akwa-Bonanjo Road Axis
  • Extension of a 15KV power transmission line to the outer zones of the city
  • Extension of the ‘CAMTEL’ telecommunications network
  • Extension of the SNEC electricity supply network
  • Demolition of several buildings

The following are major TRANSPORT, POWER AND WATER INFRASTRUCTURE PROJECTS currently underway in Cameroon:

  • Construction of the Dschang-Melong Road (CFA4,4billion)
  • Construction of the Nteem Bridge (CFA1billion)
  • Construction of the Ayos-Bonis Road (CFA10,9billion)
  • Construction of the Yaounde-Kribi Road (CFA2,2billion)

March 2006 Page 5

Africa Project Newsletter Projects

  • Construction of the Ngaoundere-Touboro-Chad Frontier Road (CFA15billion)
  • Rehabilitation of the Yaounde-Ayos Road (CFA3,4billion)
  • Rehabilitation of the Wouri Bridge (CFA3,1billion)
  • Rehabilitation of the Loum-Nkongsamba RN5 Road (CFA2,4billion)
  • Rural Electrification Programme (CFA1,5billion)
  • Drinking Water Supply Programme (CFA2billion)

CAPE VERDE

The Authorities are looking for consultants to assist in pre-selecting firms for investment studies for the PORT OF PALMEIRA. Funding will be from the European Development Fund (EDF) and the implementing agency is the Ministry of Transport.

CONGO (DEMOCRATIC REPUBLIC)

The Government and BHP Billiton have signed an agreement for the construction of an ALUMINIUM FOUNDRY in Bas-Congo. The investment is estimated at USD 2,5 billion. It must be preceded by Phase 3 of the Inga Hydro-Power Project and the construction of a deepwater port at Banana or Muanda. Annual capacity should be 650 000 tons per annum with the possibility of an additional 325000 tons. A local communities investment Programme is included.

The Indian Government has approved a loan of USD 33,5million for the country’s URBAN TRANSPORT PROGRAMME. Part of these funds (USD 12,5million) will be used to purchase 228 buses for supply to the urban transport utility, STUC SARL (Societe des Transports Urbains du Congo). The Indian company, Tata Motors has already delivered some buses that are already operational in Kinshasa.

CONGO (REPUBLIC)

The Marien Ngouabi University of Brazzaville has acquired an INFORMATIONTECHNOLOGY FACILITY with support from the Agence Universitaire de la Francophonie (AUF). The cost is CFA203million, or about 309,000 Euros.

Canadian financial agencies have arranged a loan of USD 5million at zero interest rate to permit the purchase of two locomotives to be used for the CONGO-OCEAN RAIL LINE (CFCO). This is the rail link between Brazzaville and Pointe-Noire Port. The amount could rise to USD10million to enable the procurement of carriages and telecommunications equipment.

COTE D’IVOIRE

The following are MINING COMPANIES currently active in Cote d’Ivoire:

  • Gold: Societe des Mines d’Ity (held 51% by Cogema of France), Societe Miniere d’Afema (Somiaf), Compagnie Miniere d’Afrique (CMA held 90% by Cogema of France), Randgold Resources of South Africa, Equigold, Etruscan of Canada, Leoching of China, Cluff Gold of the UK, Kaystar of Australia and Newmont of the USA.
  • Nickel: Falconbridge of Canada.

March 2006 Page 6

Africa Project Newsletter Projects

EQUATORIAL GUINEA

The LIQUEFIED NATURAL GAS (LNG) TERMINAL on the north-west side of Bioko Island is expected to deliver from late 2007. The plan is to export 3,4 million tons per annum for 17 years mainly to the Lake Charles receiving terminal in the USA. The gas will originate from the Alba Field. The LNG Plant ownership is: Marathon Oil (60%), Mitsui (8,5%), Marubeni (6,5%) and GEPetrol (25%).