1. No category

#EquatorialGuineaTheWorldfolio
#OTC2015
#TheWorldfolio
Our World
Monday, May 4, 2015
EQUATORIAL
GUINEA
This supplement to USA TODAY was produced by United World Ltd., Suite 179, 34 Buckingham Palace Road, London SW1W 0RH – Tel: +44 (0)20 7305 5678 – [email protected] – www.unitedworld-usa.com
Business with America
enhanced for the long term
The West African nation is making it easier and more secure for international investors to help diversify its economy
O
ne of Africa’s
richest, yet leastknown countries, Equatorial
Guinea is now
entering the exciting second
phase of President Teodoro
Obiang Nguema Mbasogo’s
ambitious Horizon 2020 plan
to transform the country into
an emerging economy by the
target year with private investors invited to join the party.
In the first phase, his government used the nation’s vast
petroleum wealth to build the
transport infrastructure needed to help diversify Equatorial
Guinea’s economy away from
hydrocarbons and toward
other industries, such as agribusiness and livestock, energy
and mining, fishing, tourism,
and services. Now, the aim is
to attract domestic and foreign
investors to these sectors with
“I can assure you that
the transformation this
country is experiencing
now is due to the
foreign companies,
many of which are
American, operating
here. We are looking
forward to more
participation from
American companies
in other sectors
beyond oil and gas”
TEODORO OBiANG NGUEMA
MBASOGO, President of
Equatorial Guinea
U.S. companies more than welcome. “I can assure you that the
transformation this country is
experiencing now is due to the
foreign companies, many of
which are American, operating
here,” declares Mr. Obiang. “And
we are definitely looking forward to more participation
President Barack Obama and First Lady Michelle Obama with President of Equatorial Guinea Teodoro Obiang Nguema Mbasogo and First Lady Constancia Mangue de
Obiang in the Blue Room during a U.S.-Africa Leaders Summit dinner at the White House on August 5, 2014 (Official White House photo by Amanda Lucidon)
from American firms in other
sectors beyond oil and gas.”
For many years, Equatorial
Guinea was barely on the U.S.
radar, neither in the power
centers of Washington, nor in
the boardrooms of American
multinationals, until the West
African country took the initial step. “Even though Equatorial Guinea didn’t really interest
the U.S. government, when we
invited American oil companies
to come here, they helped set
the stage for the good relations
we now have with the United
States,” Mr. Obiang explains.
Those relations are reflected
in the United States’ standing
as a leading trade partner. Currently, the U.S. is Equatorial
Guinea’s fourth-largest export
market after Japan, France and
China, and third in providing
imports after Spain and China.
Around 17% of natural gas con-
sumed in the U.S. is from Equatorial Guinea and the country’s
largest foreign investors are all
American multinationals.
Successive U.S. administrations have worked closely with
Equatorial Guinea to not only
foster economic ties, but also to
boost the country’s nascent democracy, as well as improve political freedom, human rights,
and the standard of living for all
its estimated 750,000 citizens.
Indeed, bilateral relations are so
good that U.S. passport holders
do not need visas to enter the
country, with the U.S. one of
only three foreign countries
accorded that unique privilege.
In the most recent signal of
Washington’s support for the
changes occurring in Equatorial
Guinea, President Obiang met
with his U.S. counterpart Barack
Obama at last year’s U.S.-Africa
Leaders Summit in Washington.
Situated on the Atlantic
Ocean near major international sea traffic routes, Africa’s
sole Spanish-speaking country measuring 11,000 square
miles (slightly smaller than
the state of Maryland) wants
to punch above its weight and
become, in the words of government officials, “the Singapore of Africa.”
It makes sense. The country
would be perfect as a logistics
platform for its surrounding neighbors on the Gulf of
Guinea, easing access for goods
and services to a growing and
increasingly affluent market of
300 million consumers, as well
as increasing Equatorial Guinea’s industrial capacity.
“We need to develop our industrial sector and see what we
can make here ourselves, with
foreign investment assistance,
to reduce imports and conserve
our foreign exchange,” notes
Mr. Obiang.
“For example, we could
produce cement, which every growing economy needs
if it wants to be self sufficient.
And that is the aim of Horizon
2020. It is something we are very
much focusing on,” he adds.
Africa is the continent of the
future, Mr. Obiang argues, “because we have natural resources and demographic growth.
Equatorial Guinea, of course,
will be an integral part of the
continent’s development, and
we want the United States to
join us in building that future
for the good of all.”
A UNITED WORLD
SUPPLEMENT PRODUCED BY:
Juan Manuel
Rodríguez,
Virginia Towers,
Gemma Gutiérrez,
and Fátima Rúiz
Billion-dollar backing for new partnerships
The government has highlighted five key sectors packed with business opportunities and set up a $1 billion co-investment fund for ventures that will bring out their full potential
Co-investment is the key
strategy of the government
in luring private investors,
both domestic and foreign,
to open up the country’s
economy to a range of new
sectors that officials have
identified as potentially
profitable.
Equatorial Guinea’s Holding 2020 co-investment fund
is backed by $1 billion from
the government to jumpstart
investments in five targeted
sectors – agribusiness and
livestock, energy and mining,
fishing, tourism, and services
industries – as well as minimize risk for investors.
“We have established the
fund so that when an investor
brings his or her money, the
government can also collaborate in the business,” explains
President Teodoro Obiang
Nguema Mbasogo. “The reason for the fund is to assure investors their money is safe, and
that the government supports
them and offers full guarantees
that they will recover all capital
they invest.”
The investment plan is part
of the government’s wider
program, Horizon 2020, which
targets improvements in the
country’s transport, health, education, telecommunications
and housing infrastructure to
firmly position the country as
an African success story.
“Holding 2020 is the strategic ally for the private sector
in our bid for economic diversification and sustainability, as
the government has granted
it the exclusive competence to
represent the state’s interest
in all the projects that it will
co-finance,” says Holding 2020
General Director Mariola
Bindang Obiang.
“This means that the partner
is not the state, but the Holding
itself,” she adds.
Before its petroleum
resources began generating
income in the 1990s, Equatorial Guinea was almost entirely
reliant on timber and cocoa
exports for foreign exchange
earnings. And this time, the
government wants to avoid
putting all its economic eggs in
just one or two baskets.
“Once hydrocarbon earnings began to flow into the
country,” Ms. Bindang recalls,
“the government realized that
the priority should be to build
or upgrade all the infrastructure that was needed:
highways, an airline, telecommunications, conference centers, hospitals, schools, social
housing, etc. Now, the priority
is to develop the industrial
potential of the country in
certain sectors starting with
agriculture, livestock breeding
and fishing, and that means
partnering with investors.”
These initial developments
will help Equatorial Guinea,
now a major importer of even
the most basic food products, meet its own domestic
demand for meat, fish, vegetables and fruit, and in turn
become more economically
self sufficient.
“And once production
exceeds what we need to feed
our own people, we can begin
to consider exporting to other
countries after studying the
potential markets,” the general
director argues.
The fund marks an ambitious start to what President
Obiang’s administration confidentially sees as a step toward
leading the country, and in
particular its people, to prosperity and its rightful place in a
new Africa, aided by Equatorial
Guinean and foreign investors.
“We have done so much,
so far,” says Ms. Bindang,
“but there is still a lot to do to
ensure that Equatorial Guinea
joins the ranks of emerging
nations, which we want to see
happen in 2020.”
Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content
2
EQUATORIAL GUINEA
Monday, May 4, 2015
Distributed by USA TODAY
Holding 2020 partners private sector to
unlock ground-floor opportunities
Private sector know-how and public-private collaborations will add value to the country’s raw materials and benefit the nation on both social and economic levels
P
rivate
enterprise
figures large in the
plans of Equatorial
Guinea to meet three
ambitious goals for
the 21st century: diversify the
economy away from hydrocarbons, attract foreign investors
with know-how for priority
sectors, and provide jobs and
training for citizens to boost
their income and well being.
Major local investors and
multinationals are expected to
take part in this push for private investment as part of the
government’s Horizon 2020
scheme, but smaller investors
from both inside and outside
the country are also welcome.
“We have the determination
to achieve the creation of small
and medium-sized enterprises
that will help ensure the country’s economic diversification,”
declares Equatorial Guinea’s
President Teodoro Obiang
Nguema Mbasogo.
In its bid to attract private
enterprise, the government
has come up with a series of
incentive programs covering
taxes, customs, and other fiscal
issues, as well as streamlined bureaucracy for those companies
wanting to invest.
The plan also includes a coinvestment fund, called Holding 2020, of $1 billion to match
investments by the private sector and provide fiscal safeguards
for investors. “We designed this
initiative following a series of
conferences on how to best
diversify our economy, with
a special emphasis on private
sector involvement in agribusiness and livestock, energy
and mining, fishing, tourism
and services,” explains Holding 2020’s General Director
Mariola Bindang Obiang.
“The co-investment fund
was created at the same time
as Holding 2020 and provides
the tools to drive those sectors
which we consider a priority.
This fund is at the disposal
of any investor interested in
coming here.
“If an investor has an idea
for a project of a certain size
and cannot finance it on their
own or wants to share the risk,
“We have the
determination to
achieve the creation
of small and
medium-sized
enterprises that
will help ensure the
country’s economic
diversification”
“The reason for the
fund is to assure
investors their
money is safe, and
that the government
supports them and
offers full guarantees
that they will recover
all capital they invest”
TEODORO OBiANG NGUEMA
MBASOGO, President of
Equatorial Guinea
Holding 2020 is here to assume
part of that risk.”
Holding 2020 officials are
also quick to note that the
projects must be profitable and
highlight its role as a supportive
financial partner helping create
new industries for the country.
“What interests us at this moment are investors who possess
the knowledge that we do not,”
Ms. Bindang emphasizes. “We
cannot try to create these industries right now by ourselves
as we lack the know-how.”
Equatorial Guinea is keen to
ensure that the plan does not
fail as similar schemes have
in other petroleum exportdependent countries through
mismanagement, corruption,
and other bad practices.
“It is important the international community understands
that this is a commitment conceived and adopted by the government of Equatorial Guinea
itself and was not suggested or
forced by outsiders,” the general
director adds.
According to officials, private enterprise is the key to the
country’s development. Equatorial Guinea is adamant about
not wanting to establish more
state-owned and operated companies, but Ms. Bindang admits
that it will be a challenge.
“At the national level, the
private sector is still in its infancy and people still have a
lot to learn, especially about
issues regarding balancing
their books, using trained accountants, obtaining financing, and putting up collateral
to guarantee a loan,” she says.
Many foreign investors tak-
ing a look at Africa get the impression that perhaps it is too
late, that all the opportunities
have been grabbed and there
are no new markets to target.
But the Holding 2020 chief
disputes that notion, arguing
this is certainly not the case in
Equatorial Guinea as the private
sector is starting from scratch
and a virgin market still exists.
“Of course it is not too late
because the industries we want
to establish do not exist. This is
the ideal moment to invest in
this country because we want to
produce just about everything,”
she explains. “Let me give you an
example. We produce no fruit
juices but Equatorial Guineans
are big consumers of fruit juices,
which have to be imported. We
have the raw materials – oranges, mangos and guava – so
all we need is for someone to
come here and use these fruits
to make and bottle juice.
“We also grow pineapples
and we could export them
to European Union member
countries like so many other
African countries are doing. If
they can do it, why not us?”
A juice factory, pineapple
processing plant or any other
manufacturing project, would
provide jobs for local people,
especially the young, which in
turn would generate income to
improve the standard of living.
“This will reduce our levels
of poverty, which is another
major goal of the government’s
overall macroeconomic plan:
implement methods to help
eliminate poverty and increase
the well being of all,” Ms. Bindang adds.
Successful private businesses turning out in-demand
products will also make the
country more economically self-sufficient, reduce
the country’s import bill and
foreign exchange outlay, and
could even lead to Equatorial
Guinea exporting a range of
goods to markets near and far.
“Among the economic sectors
we have identified as priorities,
we cannot right now point to
a specific market for whatever
we produce,” the general director says. “First, we will have to
see which of our products are
competitive in which foreign
markets and take it from there.”
For now, Holding 2020 wants
to get the word out to the world
on the plan, its targeted sectors,
and the advantages, incentives,
guarantees and requirements
for investors.
“Our PR strategy includes
articles in the printed press, the
internet, and advertising on the
leading global television channels,” says Ms. Bindang. “And
we are considering organizing a
type of international road-show
to let potential investors know
just how smart it would be to bet
on Equatorial Guinea’s future.”
“There are real benefits for
investors who come here”
The government has created a raft of tax and training incentives that present great advantages to investors
W
ith many
dozens of
countries
around
the globe
vying for foreign investment
and offering potential partners all manner of incentives,
the government of Equatorial Guinea knew it needed
to make sure its enticements
for possible investors were
world class.
Holding 2020 General
Director Mariola Bindang Obiang points
out that Equatorial
Guinea’s political
stability and its
carefully thoughtout
incentives
under the coinvestment fund
project have been
meticulously designed for attracting domestic and
foreign investment.
“When you look at
Equatorial Guinea, it
is quite clear that it is
a very peaceful country
with no history of conflict
and our people like to settle
their differences through dialogue, not disorder,” she says.
“Apart from that, there are
real benefits for investors who
come here because the Equatorial Guinean currency, the
CFA franc, is fully convertible
and there is no problem repatriating profits.”
In addition, the currency
has a fixed parity with the
euro backed by agreements
with the French Ministry of
the Treasury and there is no
hindrance by the government
on the free flow of capital.
“This is a great advantage
for investors,” Ms. Bindang highlights.
Liberal monetary policy
is just the beginning when it
comes to reasons to invest.
Other incentives cover such
issues as taxation, with companies creating new jobs benefitting from a 50% reduction
of taxable income related to
salaries for Equatorial Guinean nationals, for a period
of 18 years. Plus, companies providing training to
nationals enjoy a reduction of
their taxable income of 200%
of the amount they dedicated
to training Equatoguineans.
“In addition, an incentive for the export of nontraditional products is that
companies receive a credit
certificate for the payment
of any tax or customs duties equal to 15% of foreign
currency received on account in commercial banks
in Equatorial Guinea,” says
Ms. Bindang.
The government’s economic planners are particularly keen on attracting investment to the
country’s more remote areas. To promote that, companies involved
in projects away
from large urban
centers can benefit from total
amortization of
their outlay on
infrastructure.
These companies
will also be exempt
from payment of
taxes applicable to
activities in remote
areas, with the exception
of income and sales tax, as
well as customs duties and
other applicable fees.
“All of these are benefits
that any company which
comes here to set up a business can enjoy,” the general
director explains.
Other government assistance includes providing consultancy, advice and in-depth
studies on sectors and markets the investor is interested
“Holding 2020 is the strategic ally for the
private sector in the country’s economic
diversification process. The government has
granted it the exclusive responsibility to
represent the state’s interests in all projects it is
going to co-finance, meaning that the partner is
not the government but the holding itself”
MARiOLA BiNDANG OBiANG, General Director of Holding 2020
in, as well as help with finding
any finance needed.
“Holding 2020 will partner
with other investors, both
Equatorial Guinean and foreign, to co-finance projects,
meaning each party will put
up its share of the capital,” says
Ms. Bindang.
“If there is an investment
partner with the necessary
knowledge and whose project
is viable and profitable, we can
steer them toward financing
as the banks are going to play
a very important part in our
economic diversification.”
Equatorial Guinea is especially keen to lure investors
from the United States, like
those who led the way by exploring and drilling for the
oil and gas that triggered the
country’s new prosperity.
“If American investors are
interested in entering other
economic sectors to help us diversify,” Ms. Bindang says, “we
would be absolutely thrilled.”
She also points out that as the
only Spanish-speaking African state, Equatorial Guinea
is uniquely equipped to welcome investors from Spain or
Latin America.
Gabriel Mbaga Obiang
Lima, Minister of Energy,
Mines and Industry, stresses
that while Spanish-speaking
investors may have a few linguistic and historical advantages, the country is keen to
collaborate with a wide range
of nations and will be impartial in choosing who it partners
with. Belgium and Lebanon are
already on board as potential
investors, and India, the minister suspects, will likely be the
country’s biggest investor.
“We have built so many
things,” explains Mr. Obiang Lima. “But we have not
broadcast our achievements
to the international community,” he says. “Going forward,
our responsibility is to communicate, diffuse, and inform
people about what we are accomplishing in Guinea.”
Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content
EQUATORIAL GUINEA
Distributed by USA TODAY
B
uoyed by the funds
from oil exports as
well as the prestige
of its newly discovered resources,
Equatorial Guinea has begun
to leverage its more prominent
place on the world map to improve itself in ways that are not
purely economic. Well aware
that no country can thrive by
oil alone, President Teodoro
Obiang Nguema Mbasogo is
determined to ensure that his
country optimizes another of
its finest assets: its privileged
location as a gateway to Africa. With the Atlantic Ocean
running along its western coast,
Cameroon to its north, and Gabon running along its eastern
and southern borders, Equatorial Guinea is a self-proclaimed
“Singapore of Africa” – a strategically placed portal to a market
of over 300 million consumers
from nearby countries.
As such, Equatorial Guinea
is keen to strengthen ties with
its neighbors. It is one of the six
member states of the Central
African Economic and Monetary Community (CEMAC),
which seeks to increase peace,
security, and economic integration and diversification in
the region, and it shares a regional Central Bank (BEAC)
with other CEMAC members.
In 2014 the republic also
became a full member of the
Community of Portuguese
Language Countries (CPLP).
The only Spanish-speaking
country in Africa, with French
its second official language, it
added Portuguese as a third
official language as part of its
CPLP membership bid.
Further adding to its esteemed value as a trade and
transport hub is the fact that
Equatorial Guinea also has
some of the best ports, airports,
and roads in the region – a region, it is worth mentioning,
where even the most basic of
infrastructure is still not uniformly available.
Some 80% of the national
roads have asphalt, which is
a huge advantage, especially
during the muddy rainy season that plagues large swaths
of Africa. New airports have
been built in Corisco, Mon-
Developed infrastructure
and regional links lead to
300 million consumers
Good relations and investments in infrastructure have created an ideal route into Central and West African markets
not the product of cooperation
with third parties; these were
all investments funded by the
state,” explains the President.
But now that this basic infrastructure is in place and
the country has established
a proven record of political
and economic stability, it has
successfully positioned itself
to become more than just a
country where foreign companies source their petroleum.
In fact, Equatorial Guinea has
distinguished itself as a ready,
willing, and eminently well-
Monday, May 4, 2015
invest in the country across a
variety of sectors, including
mining, agriculture, tourism,
and fishing.”
Mariola Bindang Obiang,
General Director of Holding
2020 – the co-investment fund
created by the government to
facilitate the participation of
the private sector in the diversification of the local economy
– largely echoes these sentiments. She explains that while
other neighboring countries
went through periods of prosperity following the discovery
of oil resources, Equatorial
Guinea’s trajectory has been
different. The government had
the foresight to use the money
earned from the exploitation
of the country’s oil resources
to build infrastructure – the
roads, buildings, airports, airlines, telecoms, conference
centers, hospitals, schools,
and housing units that form
the foundation of a more developed society. Once in place, the
government could then move
on to developing the industrial
fabric of the nation, which at
present, explains Ms. Bindang,
Holding 2020’s General Director Mariola Bindang Obiang, left, with the
co-investment fund’s Deputy Director Patricia Mbasogo Obiang Lima
gomeyen, and Annobon, and
the ports of Bata, Malabo and
Annobon have been expanded.
Following this development,
the central government has
been more easily able to plan
and construct schools, hospi-
tals, housing units, and even
new tourist and sports installations, such as those built for the
African Cup of Nations. Equatorial Guinea has thus become
a preferred logistics platform in
the Gulf of Guinea, and an ideal
point of entry to West Africa
for new investors.
“All of this transformation,
all that we have here in this
country – roads, buildings,
the best hospitals, shopping
centers, universities – these are
prepared partner that is ripe for
long-term foreign investment.
Following the completion
of the first phase of Equatorial
Guinea’s Horizon 2020 plan,
the country has now entered
phase two of the plan, which
involves putting an emphasis
on services that will benefit local communities. “The second
phase of the plan is centered
around developing the economy through private-sector initiatives,” says President Obiang.
“We want to encourage both
local and foreign investors to
is in its most primary stages.
“Any investor who arrives now
will see that it is the perfect time
because we want to produce all
types of things, and we have the
basic infrastructure to facilitate
production, but no production
industries exist yet,” she says.
In addition, in a bid to attract
investors with industrial savoirfaire, the government is offering
tax breaks for companies that
create a certain number of new
jobs, or train local employees
with the key skills to keep new
industries up and running.
Locals have a hand
in region’s best roads
Equatoguinean talent makes up 90% of employees at Sogea Satom, which for
almost 20 years has been helping asphalt 80% of the country’s roads
P
art of the French
Vinci Construction
giant, Sogea Satom
has deep African
roots. Since its first
forays into the continent in the
1930s, the company has been
operating on African soil for
over 80 years, where it is currently active in more than 20
countries and employs no fewer
than 10,000 people, including
500 expatriates of 23 different
nationalities. Although it did
not arrive in Equatorial Guinea until 1996, the company has
quickly built up a favorable rapport with the local population,
not to mention the complex
network of roads, ports, buildings, hydraulic structures, and
other infrastructure that it has
helped put into place.
While most construction
companies arrive in Guinea
via Malabo, the capital, working in the small villages of
Mongomo gave the company
on-the-ground experience in
small, traditional Guinean villages, and linked it closely to
local populations.
To date, Sogea Satom has
completed projects in Bata,
Mongomo, Evinayong, Cogo,
Ebebyin, and many other towns
in Equatorial Guinea. It also
built a base camp in Punta Europa so that oil companies could
start oil production, in addition
to working on the maintenance
and improvement of the Malabo drinking water system.
The common thread throughout its projects is an awareness
of the communities where it
operates, something that President Teodoro Obiang Nguema
Mbasogo greatly values. “The
objective of our infrastructure
plan is to make it easier for
citizens to play their part in
the economic development
of the country,” explains Mr.
Obiang. “If citizens can each
attain a level of personal well
3
being, then the entire country
benefits.”
Operating within this frame
of mind, Sogea Satom has taken
a rather grassroots approach to
its work in Equatorial Guinea.
Twelve years ago, the country
had only one paved highway
serving Bata-Mongomo. Now,
forest track has been replaced
by a network of roads, 80% of
which are paved and capable
of handling large capacity
transportation. Airports and
seaports have also been built or
refurbished to high standards,
offering transport possibilities
that would have been unimaginable just over a decade ago.
Sogea Satom’s new
general director,
Frédéric Perrin,
is building on
the progress and
accomplishments his
predecessor, Frank
Casteleyn, achieved
over the past decade,
particularly with
regard to engaging
the local population
Although things are visibly
improving, Sogea Satom’s role
remains the same: to work hand
in hand with Guineans to make
improvements that will serve
them not only in the present,
but also in the long term. As
a testament to the company’s
commitment to the local population, 90% of Sogea Satom’s
employees – across all levels of
responsibility – are local Guineans. As much as this benefits
the local economy through job
creation, Sogea Satom also benefits from the arrangement. By
engaging with the local population at such a fundamental level,
the company learns to adapt
and optimize its workflow to
the Guinean way of life. It can
also train local staff to work
within its established ecosystem
of rules and regulations for the
workplace, the environment,
and the safety of its workers
out on the field.
Much of what Sogea Satom
has accomplished in the country over the past decade, particularly with the local population, was realized through
the leadership and vision of
the company’s former General Director, Frank Casteleyn.
While Mr. Castelyn left his position in February to become
Sogea Satom’s Deputy Regional
Manager for Southern Africa,
Frédéric Perrin – previously
the head of the company’s East
Africa operations – has taken
over the reins in Equatorial
Guinea looking to continue the
good work of his predecessor.
Bringing with him years of
experience of infrastructural
development on the African
continent, Mr. Perrin takes Sogea Satom forward as not only
the company goes through
transition, but also at a time of
significant transformation for
the country itself.
With companies like Sogea
Satom in the driving seat of
this exciting change in Equatorial Guinea, Mariola Bindang
Obiang, the General Director
of the diversification-focused
Holding 2020 fund, believes
that combined with the country’s strategic location, Equatorial Guinea can be a huge asset
to any investor who wants to
reach new African consumers. “It was once very difficult
to lure investors,” she explains.
“We had nothing.”
But now, from airports to
hotels, restaurants, ports, and
roads, the country has it all. “Any
industry that enters production
in Equatorial Guinea will easily
be able to distribute its goods
to neighboring countries in the
region,” asserts Ms. Obiang.
Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content
6
EQUATORIAL GUINEA
Monday, May 4, 2015
Distributed by USA TODAY
New investments in petroleum sector
highlight potential for development
The country’s traditional engine of the economy holds opportunities for expansion beyond extraction and production, and its appeal is not lost on investors
A
lmost 47 years of
independence
from
Spain
have brought
many changes
to Equatorial Guinea. The
primary reason for the nation’s developments – as well
as those enjoyed by other nations in the region – is the oil
industry. Yet the government
is planning many more with
its Horizon 2020 plan to diversify its revenue sources,
reduce poverty, and increase
infrastructure.
The energy sector is eager
to continue playing a central
role in the country’s progress,
according to Gabriel Mbaga
Obiang Lima, Minister of
Mines, Industry and Energy.
“It has been the engine that
has driven economic growth,”
he says, and the ministry is
working hard to continue exploiting the country’s natural
oil resources.
In December 2014, the
ministry signed an agreement with Taleveras, one
of the leading suppliers of
crude oil and refined petroleum products in West
Africa. The venture will
construct Africa’s largest oil storage terminal at
Punta Europa on the island
of Bioko, and will be ideally situated to serve West
Africa’s main oil supply and
demand centers.
To be developed in stages,
the Bioko Oil Terminal is expected to have a total storage
capacity of 1.2 million cubic
meters for refined products
and crude oil by the end of
its first two phases.
“Since 1991 we have been
working on diversifying the
hydrocarbon industry,” says
Mercedes Eworo Milam, General Director of Hydrocarbons
for the Ministry of Mines, Industry and Energy. “We also
have a liquefied natural gas
(LNG) plant, a methane plant,
and projects in areas such as
petrochemicals.”
As sustainability is a key
component of the Horizon
2020 economic plan, diversification of Equatorial
Guinea’s other industries
and products is also important. Mr. Obiang Lima
points to the ministry’s
successes: “We have various
agreements and anticipated
projects to diversify the industry and open the door to
markets for new products.”
Equatorial Guinea has
long invested its own
money into the nation for
development.
According to President
Teodoro Obiang Nguema
Mbasogo: “We are investing all of the proceeds
obtained from natural resources in our country. All
of our transformations and
the things we have here in
Equatorial Guinea have not
been obtained from coop-
electricity was greater than
its demand, so Equatorial
Guinea is seeking to connect
with new investors in industries that require a great deal
of electricity.
In addition, it is working to win over companies
within the nation that receive their power from
private sources. Moreover,
it is striving to ensure that
all residents of the country
have access to electricity, no
matter how remote their location may be.
“We cannot have indus-
ment in infrastructure so that
the basis for future growth
could be established. Thus,
many elements were constructed, including highways,
ports, airports, and government infrastructure. The
program’s focus is changing
in the second phase.
“First, it is important to
continue with specific investments in infrastructure
that remain to be implemented,” Mr. Obiang Lima
clarifies. “But principally, in
this second phase, investment is going to be focused
they will benefit because
they will arrive at a country
in which infrastructure already exists and as a result
is a much wiser choice for
setting up a company.”
The country’s infrastructure and power supply are
not its only selling points
for foreign investors. While
the nation’s size may initially
seem insignificant to those
looking to invest, it is actually a benefit. “In Equatorial Guinea we emphasize
the Ministry of Mines as
the only representative of
“We have various
agreements and
anticipated projects
to diversify the
industry and open the
door to markets for
new products“
“It is important
to continue with
specific investments
in infrastructure
that remain to be
implemented”
“In this second phase
[of Horizon 2020],
investment is going to
be focused on social
sectors, specifically on
education and health”
GABRiEL MBAGA OBiANG LiMA,
Minister of Mines, industry and
Energy
eration or from bank loans;
they are investments made
by the state.”
As a result of this approach to development,
the oil industry is financing
much of the country’s diversification. Mr. Obiang Lima
explains that the ministry
is “earmarking much of the
profits from the oil industry for the development of
electricity, because we believe that this is one of the
products that will benefit
not only our economy, but
also the entire region. That
is, we can supply enough for
our own market, and also
enough for exporting.”
In fact, as of 2013, the
nation’s ability to produce
trialization without electrical energy,” says Marcelino
Sima Mba, General Director of Segesa, the national
electricity company based
in Malabo. “A country in
darkness can never develop. One of our principles is
‘electricity for all.’ The government of the Republic of
Equatorial Guinea, through
the Ministry of Mines, Industry and Energy has constructed significant electrical infrastructure.”
This infrastructure includes power plants with capacities of 120MW, 150MW
and 200MW.
Indeed, the first phase of
the Horizon 2020 program
featured aggressive invest-
on social sectors, specifically on education and health.”
Future generations will
benefit from the ministry’s
focus on diversification and
infrastructure. Mr. Obiang
Lima believes that these
generations “are going to
find an established infrastructure, which will make
additional
development
much easier. They will be
able to dedicate more time
to education, health, women, children, and those who
are less fortunate.”
Equatorial Guinea’s citizens are not the only ones
expected to benefit from
Horizon 2020 and wider
access to electricity. “As far
as investors are concerned,
the government for the hydrocarbon industry. This
facilitates everything for an
investor, because it is different speaking with separate
ministry departments, with
different government entities, than it is dealing with
just one representative,” Ms.
Eworo points out.
And Equatorial Guinea’s
geographic location makes
it ideal for investors as well.
With Cameroon to the north,
Gabon to the south, and the
Congo Republic and Central
African Republic to the east,
access to Equatorial Guinea
means access to a potential
consumer base of 300 million people, all within less
than 400 kilometers.
The nation’s stability,
which has contributed to
the electricity industry’s
growth, is another advantage
for foreign investors. “All development plans have been
established, and each area
and ministry knows exactly
what to do,” says Segesa’s
Mr. Sima Mba. “Equatorial
Guinea’s development and
growth have been meteoric,
because we have learned
from the mistakes and successes of our neighbors.”
There is stability among
citizens as well. “People from
different tribes live in Equatorial Guinea,” Ms. Eworo explains. “We live in harmony.
Certainly, all societies have
problems, but clearly we are
all behind the President. In
our industry and in others,
we have never known of any
desire to sabotage [the work
we are doing]… We are in
a situation that is well under control, in which we all
clearly see what our priorities are. This is an incentive
for investors.”
In fact, investors who
come to Equatorial Guinea
soon find themselves part of
the community. “Investors,
that is, the actual individuals, integrate themselves
into the communities and
live peacefully,” adds Ms.
Eworo. Investors come not
to just profit: they come to
develop their own lives and,
as a result, have a mutually
beneficial relationship with
Equatorial Guinea.
“We have always done all
we could to show the world
that it is not size that defines
Equatorial Guinea, but its
ideas,” says Ms. Eworo.
Mr. Obiang Lima adds:
“The importance or power
of a country is not reflected
by the number of inhabitants, but by the quality of
work and production. We
have focused on how to
develop a country through
the oil sector, and many African countries have even
followed our example. We
were among the last to discover oil, but we have managed to develop the country
from those resources. As a
brand, although we may be
small, we have economic
discipline, and we have a
huge development.
Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content
EQUATORIAL GUINEA
Distributed by USA TODAY
Monday, May 4, 2015
7
Greater energy
mix sparks new
enterprises
A new logistics supply center for electrical materials and
a floating electrical power plant feature among the new
enterprises getting involved in a changing electricity
sector, with studies into the viability of solar and hydro
power opening further opportuntities for businesses
T
he government’s
Horizon 2020
plan has done
a great deal to
propel Equatorial Guinea toward its goals,
however work still remains
to be done for the country to
completely fulfill its potential. As the government has
declared that the process of
providing reliable national
access to electricity is one
of Horizon 2020’s principal
strategies, Segesa, the national electricity company
based in Malabo, proudly
occupies a central role in
the development plan.
Segesa was formed in
2001 as a result of a merger
between Energe, Equatorial Guinea’s former national electric company,
and its rural counterpart
Soner. The union resulted
in the electricity sector’s
restructuring, but another
shake-up was necessary a
few years ago to reduce inefficiencies and to improve
service.
Due to the stabilization
of Segesa’s operations, three
distinct organizations were
created: Segesa Generation,
which is in charge of the everyday functioning of the
country’s electrical power
plants; Segesa Transmission, which is responsible
for the state of the transmission networks, transformers, and other such
infrastructure; and Segesa
Commercial, which oversees the flow of electricity
to the end-consumer.
All three units of Segesa
maintain the same general
supervision and coordination by a central authority.
Currently, approximately
70% of the utility is owned
by the state, and the remaining 30% is held by a group
of private investors. Segesa
serves as the operator, rather than a constructor, in the
electricity sector.
Two independent grids
take care of electricity distribution. One connects the
mainland’s major popula-
tion centers, and the other
is on Bioko Island, which
serves the capital Malabo
and also Luba, an oil-export
terminal and the secondlargest city in the country.
At any given time, the
company may be developing 20 or more electrical
energy projects in the areas
of production, transport,
distribution, and commercialization.
Estimates for the amount
of money invested into
these projects hover around
$2 billion, but the likely
return on that investment
cannot be calculated: the
country can now meet its
increasing demand for power, and in fact is capable of
producing more electricity
than it consumes – a situation that it is working hard
to cultivate and perpetuate.
Segesa has been able to
reach this enviable situation via the many projects
it has undertaken in the last
decade or so.
A hydroelectric power
plant at Djibloho with
120MW capacity; a transmission and conversion line
at Djibloho; a 60kV transmission network in the city
of Malabo; expansion of a
turbo-gas power plant to
126MW; a 33kv line at Pico
Basile (the highest mountain on the island of Bioko);
electricity in the new city of
Sipopo completed in 2011;
and the remodeling of electric facilities in Ebibeyin
and Mongomo (both cities
in the far eastern part of
the country) have all contributed to the success in
electricity that Segesa and
the people of Equatorial
Guinea enjoy today.
Toward the end of 2014
Segesa signed an agreement with ASPI Group
Equatorial Guinea, a subsidiary of the Bulgarian
company ASPI Green Energy Limited, to create a
new logistics and supplies
center located in the new
Industrial City of Mbini
(CIM), called Segesa CIM.
A 120MW powership from Turkey is one of the new power-generation sources being developed
The joint venture will supply materials of tested and
certified quality, produced
by leading manufacturers
in the electricity industry.
The Minister of Mines,
Industry and Energy, Gabriel Mbaga Obiang Lima,
says about the agreement:
“Segesa Holding, in its process of industrialization put
forth by the government of
the Republic of Equatorial
Guinea, has seen the opportunity to make a decisive
boost to the energy sector by
diversifying its production
and commercial activities.”
In fact, Segesa, along with
the Ministry of Mines, Industry and Energy, has adopted
diversification and sustainability as its focus. One key
target is to retire 90% of the
nation’s oil-powered electricity plants by the year
2020 – a goal that points to
the seriousness with which
Equatorial Guinea regards
sustainability.
As such, the country is
looking at other means of
generating electricity to
replace the oil-powered
plants that will be retired.
For example, Segesa will be
involved with studies that
have been ordered by the
government that will focus
on the viability of solar and
wind power installations
on the island of Corisco,
which has no significant
hydropower resources, and
Annobon, whose population
is around 21,000.
Marcelino Sima Mba, General Director of Segesa
On November 28, 2014,
shortly after the Africa-Turkey Summit that took place
in Malabo, the Ministry of
Mines, Industry and Energy
signed an agreement with
the Turkish company Karadeniz Holding for the provision of a 120MW powership
– an innovative floating
electrical power plant that
consumes gas to generate
electricity. The move further highlights the Guinean
government’s resolve to tap
every aspect of the country’s
power-generation potential.
Hydropower is another
way Equatorial Guinea
plans to gain an edge over
its regional neighbors. “The
production of a megawatt or
kilowatt by a hydroelectric
power plant costs less than
one produced by a gas or
thermal plant, which would
see an adjustment in consumer prices for electricity,”
says Marcelino Sima Mba,
Segesa’s General Director.
“We also intend to set the
price per kilowatt for energy
produced by solar panels
and the solar industry.”
The ultimate goal is selling electricity at the lowest prices in the region.
Through price stabilization,
ample electricity supply, and
excellent
infrastructure,
Segesa and the nation aim
to attract foreign investors
to set up companies in the
country, to partner with its
citizens, and to create a mutually beneficial relationship
between the foreign investors and the people of Equatorial Guinea.
“The message that I
would give to potential investors is: don’t be afraid.
Fear causes delays. Instead,
inform yourselves: what is
Equatorial Guinea, where
is it, what potential does it
have, and which advantages
does Equatorial Guinea offer to investors?” Mr. Sima
Mba advises. “With respect
to foreign investors, I have
to say that Africa is not always shown in the best light
by the media. People do not
know how we actually live
here.”
The ability to potentially
become an energy exporter
is part of change in image
the general director would
like to see in international
impressions of his country.
“My dream is for Equatorial Guinea to be like Ghana, like the power plant at
Aksombo [dam] that sells
energy to Nigeria, to Lomé
[in Togo], to Benin and to
Burkina Faso. I want Equatorial Guinea, in the future,
to be able to export energy to
Cameroon, Gabon, Nigeria,
and Angola, via an underground maritime network.
This is Equatorial Guinea’s
potential, and our idea is for
Segesa to be the economic
engine of the post-oil era,”
Mr. Sima Mba explains.
“In fact, Cameroon and
Gabon have sought electricity provision from us. We believe that energy must be the
post-oil source of wealth.
And Segesa will play an important role in this.”
President Teodoro Obiang
Nguema Mbasogo has expressed similar sentiments:
“I believe that the vision of
Africa, today, is that we have
to transform the continent
and end the idea that Africa
is the poorest continent in
the world. This is what we
have to do.”
With the government’s
Horizon 2020 plan and the
efforts of entities such as
Segesa, Equatorial Guinea
is well on its way to making
that vision a reality.
Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content
8
EQUATORIAL GUINEA
Monday, May 4, 2015
Distributed by USA TODAY
The best choice for producing
offshore in West Africa
Political stability, the absence of terrorism, enormous reserves, and a flexible and
pro-American government have made Equatorial Guinea a go-to country for U.S.
hydrocarbon companies
T
here is no doubt
that “diversification” is the buzzword du jour in
Equatorial Guinea. Yet despite all the attention
cast upon the up-and-coming
sectors, the hydrocarbon industry continues to anchor the
national economy and will unquestionably do so for years to
come while the others find their
footing. Moreover, as oil and gas
are effectively fueling economic
diversification, it is imperative
that it maintains momentum.
Mercedes Eworo Milam,
General Director of Hydrocarbons at the Ministry of Mines,
Industry and Energy, goes further, saying that oil and gas not
only funds diversification, but
has inspired it as well. “I believe
that we have found ourselves
through hydrocarbons,” she
says. “Being such a demanding
sector, the ministry had to use
all of its energy in developing it,
and in doing so, discovered its
own potential. When we all saw
what the ministry was capable
of doing, we thought why not
channel this vigor into all the
other sectors?”
Equatorial Guinea is one of
Africa’s smallest countries in
terms of area, but it certainly
punches above its weight in
hydrocarbon reserves. The
third largest oil producer in the
continent, as of January 2015, it
boasted 1.1 billion barrels and
1.3 trillion cubic feet of proved
crude oil and natural gas reserves, respectively, according
to the U.S. Energy Information
Administration. Most of the
country’s reserves are located
offshore near Bioko Island –
not surprising, given the fact
that its maritime territory is 11
times larger than its land area.
Total oil production has
slid downwards over the past
several years, from its peak of
“We are pragmatic,
we like fast-tracking,
and this is why mainly
North American
businesspeople have
chosen us”
MERCEDES EWORO MiLAM,
General Director of
Hydrocarbons at the Ministry of
Mines, industry and Energy
375,000 barrels per day (bdp)
in 2005 to 270,000 bpd in
2014. Maturing fields coupled
with a heretofore lack of new
significant discoveries can be
blamed for this decline, but the
government is hopeful that last
year’s licensing round will bring
about better results.
One of the objectives of this
recent round, which offered
up all available blocks, was to
attract more oil majors than
the previous round. Nevertheless, Energy Minister Gabriel
Mbaga Obiang Lima says the
country will “continue working
with small and medium-sized
American exploration and
production firms because they
tend to make fewer mistakes
since they risk a larger part of
their capital with each decision.”
U.S. companies have been
the cornerstone of the nation’s
oil and gas industry since the
beginning. ExxonMobil, Marathon Oil and Noble Energy,
for example, were the first exploration companies to strike
black gold in its waters in the
1990s. As a result of these
finds, the country’s economic
pulse immediately began to
quicken, attaining doubledigit growth thanks to the
surge of foreign investment.
After ExxonMobil brought
the Zafiro field online in 1995,
the country’s GDP grew by
an extraordinary 66% in
1996. The following year,
the economy took a flea-like
jump again, expanding by an
unprecedented 150%.
ExxonMobil continues to
make headlines. In April this
year it ratified a production
sharing contract (PSC) it had
signed in January with Production Equatorial Guinea (Offshore) Ltd., GEPetrol and the
Ministry of Mines, Industry
and Energy, to explore Block
E.G.-06.
According to Mr. Obiang
Lima, the ratification of the PSC
“signifies the start of a new adventure between old acquaintances and is expected to be as
successful as the first one.”
“The agreement with a supermajor like ExxonMobil is
a major vote of confidence
in Equatorial Guinea, even
as global commodity prices
remain depressed,” he added.
“This is added proof that offshore continues to be an appealing jurisdiction for the
exploration of hydrocarbons.”
The drop in crude oil prices
has deterred some investors,
but as Ms. Eworo points out,
“This is not the first time prices
have fallen and it highlights the
importance of working with
companies that have a longterm vision.”
A licensing round, held between August and October 2014, offered up all available blocks
She adds that Equatorial
Guinea can offer investors a stable and safe working and living
environment – something that
other countries in the region
cannot. And in return, she expects that investors view themselves as partners in national
development, rather than players who merely reap the riches
and leave. U.S. investors, in fact,
were the ones who introduced
the concept of corporate social
responsibility in the country.
“The idea of leaving a legacy is
a cultural thing for Americans,”
says Ms. Eworo. As a gesture
of gratitude and confidence in
American investors, Equatorial Guinea offers them various
incentives, such as visa-free
entry. Ms. Eworo claims that it
has become a favorite partner
for the U.S. because “American
companies are 100% pragmatic.”
“We have always brought to
the table practical solutions so
that projects of mutual interest
can move forward,” she adds.
“We are pragmatic, we like fasttracking, and this is why mainly
North American businesspeople have chosen us.”
Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content