AFRICAN NATURAL RESOURCES CENTER (ANRC) Regional Perspective on Gas Sector Policy and Institutional Framework A presentation at the IGU Executive Committee Durban, South Africa, 6-7 April 2016 Presented by: Thomas VIOT 1
PRESENTATION OUTLINE THE AFRICAN NATURAL RESOURCES CENTER REGIONAL POLICY PERSPECTIVES ROLE OF AFDB AND ANRC 2
AFRICAN NATURAL RESOURCES CENTER Mandate Assist the Regional Member Countries (RMCs) maximize development outcomes derived from Africa s natural resources by boosting their capacity to achieve inclusive and sustained growth from natural resources Scope Renewables Water, Land, Fisheries, Forestry. Non-renewables Minerals, Oil, Gas. Interventions Capacity building Policy advice, Advocacy, Knowledge building, Technical assistance. 3
OVERVIEW OF POLICY LANDSCAPE What Have We Observed/Mixed trends? National corporations, Pursuit for value addition, Impact of rising community voice, National versus regional enclaves, Growing but unmanaged stakeholder expectations, A proliferation of institutions, Complex regulatory institutional structures. 4
DRIVERS OF POLICY What policy makers respond to Public pressure, Political environment, Historic experiences, Investors strategy Economic needs, Global trends, Investor relations, External advise. 5
REGIONAL POLICY IMPLICATIONS What is the take away? GOVERNMENTS Striking right balance, Underscore policy with clear strategic intend, Balance upstream and downstream policies, Take stock of institutional costs, Structure public narrative to align with reality, Interrogate resource economics, Balance national and regional strategies, Getting right is tough but feasible INVESTORS No arms-length relationships, JVs or wholly owned entities, More transparency and bridge knowledge gap, A new breed of corporate citizenship, Potentially strong value proposition, Manage HQ/ shareholder expectations 6
CONCLUSIONS What then? No single size fits all Mind project economics Sustainability through mutual benefit Bridge knowledge gap Public narrative important 7
AfDB NEW DEAL ON ENERGY Universal access by 2025 650 million without electricity, Single digit GDP growth/ drop in FDI, Power outage driven low productivity, Lack of industrial growth, Focus on unclean fossil fuels, On-grid generation, On-grid transmission, Off grid-generation. Unbalanced energy mix, Wastage and pollution from Gas Flaring 8
AfDB NEW DEAL ON ENERGY Role of ANRC Promote domestication of natural gas in the energy mix, Coordinate AfDB s support to governments on national and regional policy frameworks, Conduct policy analysis to build internal knowledge, Document case studies to benchmark, Be focal point between the Bank and other gas advocacy partners, 9
ANRC SUPPORT TO TANZANIA Negotiations, Development of the gas sector Training for negotiations team Knowledge building Long term advisory services during negotiations. Communication strategy. Local content, Implementation plan Analysis supply chains and opportunities Communication strategy Domestication strategy, Roadmap for domestication Economic analysis Knowledge transfer and case studies (for ex: Egypt) 10
THANK YOU
BACK UP SLIDES 12
ANRC NEGOTIATIONS FRAMEWORK A Means to an end Prenegotiations Negotiations Implementation 13
OUTLINE Executive Policy Objectives Mandate Oversees negotiations National Assembly Line Ministries & Agencies Parliamentary Committees/ Civil Society Role clarity Separation of powers Inclusivity Mandate Oversee implementation Legislation Audits Appoint negotiations team Implementation agreements Nominates non-executive directors to state owned companies and JV Enforce legislation Gather information/ knowledge Reviews Advises Advocates Validate Creates knowledge Clear authorizing environment Stable investment climate
IMPLEMENTATION PROCESS Pre-negotiations Negotiations Post-negotiations Build knowledge Review legal framework Sector context Project itself The investor Choosing business partners Negotiation strategy & mandate Select negotiation team Roles and institutional structure Tactical issues Timing Venue Communication Flexibility Team alignment and dynamics Practical issues Process outline Agree procedures Periodic process reviews Recording Broker Legal agreement The concrete lasting outcome of negotiations Implementation plan Value addition Domestic linkages Investors 15
LOCAL CONTENT OVERVIEW OF ANRC POLICY TOOL Define Goals Determine Scope Establish Guidelines Analyze Domestic Market Capacity Understand External Market Conditions Assess Resource Project Economics Evaluate Project Sponsor Strategies Implementing and Monitoring Country Context Macro-Economic Environment Micro-Economic Factors Implementation Engage Stakeholders