CÔTE D'IVOIRE: An Introduction to General Business Law

The following Overview featured in Global 2023 and is awaiting update from the firm.

Public-Private Partnerships in the Renewable Energy and Infrastructure Sectors

In a context of progressive resumption of economic activity following the Coronavirus pandemic, economic activity in the eight member states of the West African Economic and Monetary Union (UEOMA) – Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo – has remained sustained, notwithstanding a gloomy international situation and a fragile socio-political and security environment. The economies of the UEMOA area have realised GDP growth, for the year 2022, of 5.7%. The Ivorian government has announced that the economic outlook for the Union is favourable and forecasts a growth rate estimated at 7.3% in 2023. This dynamism is marked by an upsurge in major development projects within the UEMOA area.

The sectors benefiting from these projects vary from one state to another and the allocation of resources depends on each country’s priorities and objectives, which are specified in a national development programme or its equivalent.

Côte d’Ivoire infrastructure investment 

In Côte d’Ivoire, the Ministries that have been allocated the highest portion of the budget for 2023 are the Ministry of Equipment and Road Maintenance, the Ministry of Transport and the Ministry of Mines, Oil and Energy with, respectively, budgets of XOF665.8 billion (approximately EUR1 billion), XOF300 billion (approximately EUR457 million) and XOF260.9 billion (approximately EUR397 million). These figures reflect Côte d’Ivoire’s willingness to invest massively in the development of road, transport, and energy infrastructure in order to develop its economy.

Most of the infrastructure under construction in the transport and road equipment sectors are the work of public-private partnerships. We are referring to the extension of the Felix Houphouet-Boigny International Airport, the construction of the Abidjan metropolitan, the reinforcement of the coastal road, the extension of the northern highway and the independent power production projects under discussion to name a few.

These projects are evidence of the in-depth transformation of Côte d’Ivoire as planned in the current 2021–2025 national development programme with an estimated investment of XOF59,000 billion (approximately EUR89 billion), 74% of which is expected to come from the private sector, particularly in the form of public-private partnerships.

As regards the energy sector in general, and renewable energy in particular, we can count the completion of the first solar power plant in Boundiali. In addition, since November 2019, Côte d’Ivoire has joined the World Bank Group’s Scaling Solar programme to develop clean energy sources and achieve its goal of producing at least 42% of its energy from renewable sources by 2030. Under the programme, Scaling Solar will support the development, tendering and financing of two solar photovoltaic projects.

The public-private partnerships framework strategy

The use of public-private partnerships has many advantages such as acceleration of projects implementation, the reduction of the financial burden on the State, the improvement of performance, better cost control and socio-economic benefits. The growing interest in the use of public-private partnerships requires an analysis of the legal framework applicable to this type of contract. Côte d’Ivoire has implemented a legal framework for public-private partnerships since 2012 with a reform in 2018. At a sub-regional level, the UEOMA Council of Ministers has adopted three important texts which constitute the new framework for public-private partnerships in the UEOMA , namely:

• Decision No 07/2022/CM/UEMOA on the adoption of the public-private partnerships framework strategy in the UEOMA;

• Decision No 08/2022/CM/UEMOA on the implementation of the public-private partnerships strategy in UEMOA; and

• Directive No 01/2022/CM/UEMOA on the legal and institutional framework for public-private partnerships in UEMOA (the “Directive”), which must be transposed into the internal legal order of the member states of the union within three years of its entry into force – ie, by 30 September 2025 at the latest.

In essence, the public-private partnerships framework strategy in the UEOMA area aims at promoting socio-economic development through, in particular, structuring, and sustainable projects capable of supporting economic growth, and creating more opportunities for the community private sector. This last aspect is reflected in the Directive, which requires member states to ensure that public-private partnerships whose value is below a threshold defined by them are reserved for UEOMA-based companies. Similarly, the Directive provides for the access of small and medium-sized companies in the execution of public-private partnerships contracts. This strategy has the advantage of stimulating competition within the UEOMA and leads to greater participation of the local private sector in the construction of infrastructure.

Environmental standards in the planning of public-private partnerships projects

The Directive provides for the obligation to consider the environmental requirements linked to public-private partnerships throughout the life cycle of a project:

• the identification and prioritisation of projects likely to be implemented as public-private partnerships requires a preliminary environmental and social study;

• the prior assessment of identified and prioritised projects must include, among other things, an analysis demonstrating that the project is economically and socially useful as well as a positive environmental balance;

• the evaluation of tenders implies that the award criteria may include environmental and social criteria; and

• the performance of the contract requires increased control by the contracting authorities on the proper execution by the contractor of the obligations arising from the clauses related to environmental requirements.

In the light of the foregoing, we can validly state that UEOMA member states benefit from an appropriate regulatory framework for the development of projects through the public-private partnerships mechanism. The specificities outlined should eventually facilitate the use of private financing (local and community) in the framework of the realisation of infrastructures in the fields of transport, road equipment and renewable energy. All the members states have three years, until 30 September 2025, to pass national bills enforcing the Directive.