Recently published research from Business Monitor International, "Cote d'Ivoire Infrastructure Report Q3 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 08/06/2013 -- We are maintaining our view for strong construction sector growth of 13.6% in 2013, with this high rate to be sustained over the medium term, as additional projects enter the pipeline and progress is seen on existing ones. A number of high value projects are entering the construction phase over the near term. These projects, which are in the power and transport sectors, should provide support to the industry over the medium term (2013-2017), when we expect annual average real growth of 10.6%. A combination of government investment and growing private investor interest is culminating in strong sector potential. However, the security and political risks remain a very real threat, although a significant deterioration in the political climate is not our core view.
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Construction growth is expected to make a strong rebound in 2013. Government investment into addressing the country's wide-reaching infrastructure deficiencies, following decades of underinvestment, is filtering through to projects. This is being supported by numerous debt cancellations, in addition to growing revenues from gold mining and cocoa production; there is also longer-term potential for growing oil production as offshore exploration takes off.
At the same time, the private sector is returning to growth, following years of political uncertainty. This drive for private investment in infrastructure is being support by development funding and, most crucially, the World Bank's Multilateral Investment Guarantee Agency (MIGA), which has been providing investor guarantees for flagship projects in the country.
Projects guiding our positive outlook:
- The Azito Power Plant: This project is moving forward successfully after having secured funding. The project includes converting a simple-cycle power plant to a combined cycle, increasing generation capacity to 430 megawatts (MW) from 288MW. The project will be executed on a build-finance-operate basis by Azito Energie, which is formed of Globeleq and Industrial Promotion Services West Africa. In late December 2012, the African Development Bank (AfDB) approved a US$50mn loan for the expansion of the Azito power plant. This was followed by an investment guarantee by MIGA for the project in January 2013. MIGA's guarantee covers Globeleq's Holdings Limited investment in the project for 20 years, insuring against a breach of contract by the government.
- The Soubre hydropower dam: A loan agreement with China Export Import Bank was signed in January 2012. The US$500mn loan will cover the majority of the US$600mn price tag. The loan was granted on generous terms, with a nine-year grace period and a 20-year repayment period, at a rate of 2%. The power plant will have a 274MW capacity, increasing current capacity by around 15%. Sinohydro started construction on the power plant on February 25 2013, and is due to complete it in 2017.
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