PRIVATE INTERNATIONAL INVESTMENT
IN ZIMBABWEAN INFRASTRUCTURE PROJECTS
CONTENTIOUS ISSUES IN
INFRASTRUCTURE PROJECTS
TRANSACTIONS
Outline of Presentation
• Typical Project Finance Structure
• Critical Issues affecting Private Contractors
• Critical Issues affecting International Joint Venture
Partners
• Critical Issues affecting Local Joint Venture Partners
• Critical Issues affecting Lenders
• Critical Issues affecting Government Authorities
Typical Project Finance Structure
Government
Equity Support
Arrangements
Government Support
Agreements *
PROJECT
COMPANY
Sponsors
O&M Contract
O&M
Contractor
EPC
Contract
EPC Contractor
Finance
Documents
Key Input
Contracts
Lenders
Off-take
Contracts
Off-taker
Input Supplier*
* Also referred to as the Implementation
Agreement
** For a coal-fired power plant, this would
include Coal, Limestone and Water
Equipment Supply
Contract
Equipment
Supplier
Critical Issues affecting Private
Contractors
Extraterritorial application
ADEQUATE
INSURANCE
PROTECTION
ARBITRATION
OF DISPUTES
DOUBLE TAX
TREATY;
ANTI-BRIBERY;
ANTICORRUPTION
PROJECT
COMPANY
IMPORTING
MACHINERY
AND
EQUIPMENT
EXPATRIATE
WORK
PERMITS;
EMPLOYER
DUTY OF CARE
4
FAIR & EQUAL
TREATMENT
FOR FOREIGN
& DOMESTIC
COMPANIES
Critical Issues affecting International
Joint Venture Partners
Extraterritorial application
ABILITY TO
ASSERT
CONTROL
REPATRIATION
OF CAPITAL
DOUBLE TAX
TREATY;
ANTI-BRIBERY;
ANTICORRUPTION
PROJECT
COMPANY
INDIGENISATION
LAWS
DISPUTE
RESOLUTION
CAPITALISATION
REQUIREMENTS
5
Critical Issues affecting Local Joint
Venture Partners
Extraterritorial application
REPUTATION
????
APPLICATION OF
INTERNATIONAL
LAWS
PROJECT
COMPANY
APPROPRIATE
TECHNOLOGY
TRANSFER
FUNDING
INVESTMENT
FINANCIALLY
STABLE AND
CREDITWORTHY
PARTNER
6
Critical Issues affecting Lenders
Extraterritorial application
POLITICAL
STABILITY
MATERIAL
ADVERSE
GOVERNMENT
ACTION
SANCTIONS;
ANTICORRUPTION &
ANTI-BRIBERY
LAWS
PROJECT
COMPANY
CURRENCY
INCONVERTIBILITY
DISPUTE
RESOLUTION;
ENFORCEMENT
OF FOREIGN
ARBITRAL
AWARDS
7
APPROPRIATE
PROTECTION
ON
BANKRUPTCY
Critical Issues affecting Government
Authorities
Extraterritorial application
INVESTMENT
INCENTIVES &
GOVERNMENT
SUPPORT
?????
INVESTMENT
TREATY
PROJECT
COMPANY
INDIGENISATION
CONCESSIONS
GUARANTEES
REQUIRED
FOR
FINANCING
JOB CREATION;
DEPENDENCE
ON
EXPATRIATES
8
Chadbourne Contact
Deon Govender
tel +27 (0) 87-980-1340
email [email protected]
online chadbourne.com/dgovender