RECOMMENDEDPRIORITY DEVELOPMENT

CORRIDORS AND RELATED PROJECTS

by John RochaSENIOR PROJECT MANAGER

PROJECT MANAGEMENT OFFICE

19 June 2008

www.nepadbusinessfoundation.org

1. Resource-based exporter of minerals/metals (oil & gas, gold, coal, iron ore & ferro-alloys, bauxite/aluminium, copper, diamonds, etc. (>70% of Africa’s exports);

2. Resource-based exporter of agric & agric-based commodities (cocoa, cotton, fruit & juices, sugar, grains, wood & paper/pulp, wool, meat, fish, etc.);

3. Insignificant exporter of manufactured goods; and

4. Very weak HR base (skills) except for a few niche competencies.

5. Weak infrastructure links – curtail exploitation & beneficiation of resources.

African Context:Start from what we are!

•Agricultural•Mineral•Forestry•Tourism•Fishing/Aquaculture•Energy (coal/gas & HEP)

Thus, Africa’s short to medium term potential lies in our natural comparative natural comparative

advantage:advantage: Resource-based industries (competitive platform

for finished products in the longer term and market for resource inputs industries)

Raw Mat. - Int. Product - Semi-Manufacture - FabricatedRaw Mat. - Int. Product - Semi-Manufacture - Fabricated

capital HR/HRD technology R&D marketing

energy transport services etc…

FinishedHigh-ValueProducts

TRANSPORT vs DEVELOPMENT CORRIDORS

• “Transport Corridor” is :– a multi-modal corridor connecting two, or more points

of economic activity as reliably and as cost effectively as possible.

– Focus - economic efficiency rather than economic distribution and it should ideally provide users with transport choices.

• A “Development Corridor” on the other hand - – Characterised by the integrated nature of its

programmes – It requires transport and energy infrastructure – Then crowds-in investment in high potential areas– Configures anchor sectoral investment projects– This serves as a basis for integrated development at a

local and regional level

SPATIAL DEVELOPMENT PROGRAM (SDP) OBJECTIVES

Stimulate investment-led economic growth and development;

Catalyse other (sustainable) sectors; Facilitate intra- and extra- Africa trade; Promote regional economic cooperation and

integration; Optimize the provision and utilization of

infrastructure; Encourage beneficiation and economic

diversification; Enhance competitiveness of African economies;

and Stimulate employment and wealth creation.

SDP METHODOLOGY: KEY ASPECTS

• Inherent economic potential: Natural resources (agri & mineral);

• Configuration of investments to ensure infrastructure viability through sustainable revenue streams;

• Crowding-in of private sector investment;• Promotes PPPs where feasible;• Secure political commitment (Heads of State) and provide

the requisite conducive environment;• Ensure rapid planning and delivery projects and

programmes (momentum).

What value does it add?

• Addresses the urgent need for effective investment investment prioritisationprioritisation based on sound economic rationale;

• Links and synchronises private sectorprivate sector economic investment project opportunities with key infrastructure infrastructure projectsprojects;

• Promotes the realisation of wider developmentwider development potential (densification) catalysed by infrastructure provision and anchor investments;

• Provides spatial focus for strategies to promote regional regional economic integrationeconomic integration & development.

• However, it is only one component one component of an integrated growth & development strategy! Focuses on low-hanging-fruit to catalyse development

RECOMMENDED DEVELOPMENT CORRIDORS

FOR

SHORT-LISTING AND PRIORITIZATION

CRITERIA FOR SELECTION

• Must be aligned to NEPAD and supported by SADC Secretariat• Preferably cross-sectoral in character• Demonstrable potential to generate SHORT, MEDIUM to LONG-TERM

benefits for NBF members• Enjoy high level government support within HOST countries, therefore

considered a priority project at national, regional and continental level• Enjoy high level political support/commitment within South Africa

government structures (i.e existing political/economic agreements between SA and targeted countries

• Demonstrable commercial potential/viability• Highest potential to ring fence opportunities for NBF members and

enhance local private sector participation• Anchor projects ready for take off, particularly in mining (high level

investor interest in identified anchor projects). In other words, projects beyond conceptual stage (at Pre-feasibility and feasibility stages)

Bas Congo: Angola, DRC & Rep.Congo

Lobito: Angola, DRC & Zambia North-South: Botswana, DRC,

South Africa, Zambia & Zimbabwe

Central: Burundi, Rwanda &

Tanzania. (Uganda)

RATIONALE FOR RECOMENDING THESE

CORRIDORS

13m-15m

12m-15m

43m-54m

10m-13m

9m-13m

4m-5m

69m-93m

18m-24m

1,9m-2,1m48m-51m

ACCESS TO POTENTIAL MARKETS AND CONSUMERS: POPULATION DENSITY & ESTIMATES

2010-2020

Mineral Resources Occurrence: Anchor Projects to Unlock SDI Potential

SignificantSignificantAgri-potentialAgri-potential

Important forestry production, and large potential Important forestry production, and large potential

And water potential…And water potential…

TOURISM (North-South): OKAVANGO TRANSFRONTIER PARK

THE IMPACT OF INFRASTRUCTURE UPGRADE ON BUSINESS AND TRADE OPPORTUNITIES WITHIN

RECOMMENDED PRIORITY DEVELOPMENT CORRIDORS

• A study conducted by the Development Research Group of the World Bank posits a 5-year period for network upgrading, followed by a 10-year period of operation before new upgrade (Road Network Upgrading and Ovreland Trade Expansion in Sub-Saharan Africa, Uwe Deichmann and David Wheeler, February 2006)

• The study estimates trade expansion in the range of U$ 20 billion annually or U$ 203 billion for the ten-year operational period

• The assumption is that trade growth to full volume phases in continually during the initial 5-year period, adding U$ 50 billion to total trade volume

• The estimated cost of upgrading is U$ 20,7 billion, with an annual maintenance cost of U$ 900 million that would phase in during the first 5 years and remain constant for the next 10 years

• An estimated 8.4 million person-years of employment would be generated by upgrading, and employment of 365, 000 people for continuous maintenance

• Overall the balance sheet looks good for network upgrading in Sub-Saharan Africa with total trade expansion over 15 years of U$ 254 billion, weighed against total costs of U$ 47 billion (U$ 5.9 billion/year for the first five years and U$ 1.8 billion/year thereafter)

Current Trade Estimate Along Recommended Corridors (U$ Million)

Source: Development Research Group, World Bank, February 2006

Bas Congo

Lobito

North-South

Central

Post-Upgrading Trade Estimate Along Recommended Corridors (U$ Million)

Source: Development Research Group, World Bank, February 2006

Bas Congo

Lobito

North-South

Central

City Trade Impacts of Corridor Upgrade (U$ Million)

Country City Current Upgraded Change Change%

Angola Luanda 209 452 243 116

DRC Kinshasa 95 257 162 171

Kolwezi 16 32 16 100

Lumbumbashi 35 66 31 89

Congo-B Brazzaville 58 152 94 162

Pointe-Noire 24 69 45 188

Zambia Lusaka 502 606 104 21

Zimbabwe Harare 447 496 49 11

Bulawayo 226 236 10 4

South Africa Cape Town 338 644 306 91

Durban 189 584 395 209

East Rand 445 1,104 659 148

Johannesburg 674 1,626 952 141

Pretoria 319 807 488 153

Sasolburg 165 387 222 135

Soweto 87 212 125 144

West Rand 205 498 293 143

Tanzania Dar Es Salaam 243 362 119 49

ONGOING AND PLANNED PROJECTS ALONG

RECOMMENDED DEVELOPMENT CORRIDORS

Rehabilitation of Dar Es Salaam Port(1,5 tonnes by 2015)

Dar-Kigoma Rail Rehab

(Concessioned)

Rehab Nelson Mandela Highway

Lake Victoria (Passenger &

Goods)

CENTRAL SDILake Kivu

Gas

Road Rehab

Airport

Oil Pipeline

Xstrata Kanga Project (Nickel) 2011, U$ 1,5bn

Muremera Mine, Burundi

Agriculture: tea/coffee (Rwanda, Burundi & Tan), Cotton, sugar

(Illovo), rice, vegetable oil & biofuels,

fisheries

Isimbara Gold Mine

LOBITO SDP

LOBITO DEVELOPMENT CORRIDOR

Lobito Oil Refinery (U$

3bn

Lobito Port Rehabilitation

Lobito Railway Rehabilitation

(2011)

The Copperbelt

Lobito Gas Project. FS concluded. Com: 2007

Gove Hydro Project: FS, Com: 2008, Rehab

U$ 28m

Designated Industrial Development Node Forest Zone

Eucalyptus

Agricultural Zone

ZAMBIA: Lobito & North-South SDI/Bas Congo (The Copperbelt)

Kafue Upper Expand, FS, Com: 2005/2006/2007 U$ 20m/U$20m/U$20m

Kolwezi-Solwezi, Trans.DRC-Zambia, No FS, 2009

Livingstone-Katima (Zambia-Namibia), FS,

Com: 2009, U$ 45m

Luapula Hydro, FS-no, Exp.Com:2015, U$ 1500m

Okavango Transfrontier Park

Lumwana Project (Cu)

(Equinox Minerals)

Ndola Copperbelt Project

Special Economic Zone (China)

U$ 250 m Copper Smelter

Kazungula Bridge(FS 08)

Mukambo Project, ICS Copper

Systems

Railway rehab FS

Konkola North Copper Project

Mumbwa Copper-Gold Project

FS=Feasibility

NORTH-SOUTH DEVELOPMENT CORRIDOR

Route 1 Route 2

The Copperbelt(DRC & Zambia)

Okavango Transfrontier Park

Mmamabula Coal Project

Bushveld Complex

Zimbabwe Great Dyke

Kolweizi-Solwezi Transmission 330kV,

U$ 25m

Waterberg Coal Fields

Kazungula Bridge

Economic Development Zone

(China)

Livingstone-Katima Mulilo Transmission, FS, U$ 45m

Zambia-Namibia HVDC, FS, U$ 220m

Lupane Gas project U$

250m

Mowana Copper Mine

Planned and Ongoing Projects-Bas Congo/North-South

Feasibility Complete

(U$ 78m)-RehabExp.Com: 2007

Feasibility Complete

(U$ 160m)-Rehab, refurb

Exp.Com: 2008/2011

Feasibility Complete (U$ 15m)-RehabExp.Com: 2008

Feasibility Complete(U$ 28m)-RehabExp.Com: 2009

Feasibility Complete(U$ 20m)-RehabExp.Com: 2010

Feasibility Study

Complete(U$ 30m)Exp.Com:

2010

Inga- Kolwezi Transmission (U$ 170m,

FS,Exp.com:2010)

Kolweizi-SolweziDRC-Zambia, No FS, 2009

(U$ 20m)

INGA 3 (WESTCOR)

U$ 3500m, FS ongoing

Grand Inga, FS, U$ 4025m, Exp.com:

2012

Kinshasa-Brazzaville

Bridge

Matadi Port

LNG Project –U$ 4bn (Angola

Aluminium Smelter (BHP)

U$ 3bn

AngloGold (gold), Anvil Mining (Copper & Silver),

Nikanor (Copper & cobalt), Phelps Dodge (copper & cobalt),

Kumba, First Quantum etc.Banro (Gold), TEAL

Luita Copper & Cobalt Proc.Fac

(CAMEC)

UraniumMines

Roads: ADB, WB,EU,

KFW, DFID

WAY FORWARDAction Item Assigned To Date Assigned Date Needed Status / Comments

The Bas-Congo and the North-South Corridor were selected as priority corridors to be pursued

NBF PMO 29 June 2008 8 August 2008

To be debated at the NEPAD/SADC Infrastructure Project Conference, 8 August 2008

Further analysis of selected development corridors to narrow down specific projects

PMO 19 June 2008 7 August 2008

Outstanding

Undertake Stakeholder analysis and design an engagement approach

Collective 19 June 2008 7 August 2008

Outstanding

Identify potential risks and solutions Collective 19 June 2008 7 August 2008

Outstanding

Set-up an NBF Task Team to carry out the functions above and ensure adequate preparation of the conference programme.

Proposed Members: John Rocha (PMO),

Roelof van Tonder (SAAACE), Juliet Kairuki (

SADC Banking Association), Reg Max (PWC)

19 June 2008 7 August 2008

First meeting scheduled for 11 July. Time and venue to be mutually agreed by team members

Invite Brenda Horne, MCLI CEO NBF 19 June 2008 7 August 2008

Outstanding

Brief development partners NBF 19 June 2008 30 June 2008 Invitations issued