Nigeria project finance

Benchmark developments in Lagos State
• Ben Akabueze, the Honourable Commissioner for Economic Planning & Budget – representing His Excellency, Babatunde Raji Fashola ( SAN), the Governor of Lagos State

Lagos State PPP
• Rotimi Oyekan, Honourable Commissioner for Finance, Lagos State

Federal Privatization
• Irene Chigbue, Director General of the Bureau of Public Enterprise (BPE)www.lcc.com.ng

Benchmarks in Nigerian Project & Infrastructure Finance
Introduction & Borrower’s Perspective

Opuiyo Oforiokuma CEO/Managing Director

ProjectFinance Conference London, 4th November 2008

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Agenda Topics
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About LCC Key Drivers Behind Development of Lekki Toll Road Financing Key Challenges Encountered

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About LCCwww.lcc.com.ng

About Lekki Concession Company

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About Lekki Toll Road Concession
30-year Public Private Partnership between Lagos State and LCC, to solve historical problems of heavy “go slow” along the Lekki-Epe Axis Project Summary
Phase I - Expansion and upgrade of 49.4km of Ozumba Mbadiwe Avenue/LekkiEpe Expressway Phase II - Construction of 20km of Coastal Road, plus option to do theSouthern Bypass Operation and maintenance of new road infrastructure over 30-year Concession term Project cost being financed by LCC, will be recovered principally through charging tolls

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Founding Principles of LCC’s Mission in Lekki
Robust design

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Delivering Quality Delivering Quality Infrastructure Infrastructure

Built to last International standardsLeverage technology

Delivering Quality Delivering Quality Services Services

Utility Service Mindset – “Service First” Operations strategy based on ‘Maintenance Culture’ Suite of services (breakdown / recovery, helpline, etc)

Pioneering Pioneering Change in Road Change in Road Infrastructure Infrastructure Delivery Delivery

“We see more than a road” Professional project management & servicedelivery Stakeholder Management & Communication Nighttime working, Health & Safety, Traffic Management

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Key Drivers Behind Development of Lekki Toll Road

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Nigerian Roads Overview

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Estimated 193,000 Km of Road

Rank: 116 Rank: 110 Rank: 87 Rank: 73

39,000 Km = Federal (20%) 25,000 Km = State (13%) 129,000 Km = Local Govt (67%)

Rank; 51Rank: 40 Rank: 22 Rank : 17 Rank: 9

Estimated 58,000 Km (30%) are surfaced (ie, asphalted)

1 = Underdeveloped

7 = extensive and efficient by international standards

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How Nigerians Get Around
Road transportation is currently the primary source of mobility of Nigerians; Road transportation is currently the primary source of mobility of Nigerians; however, existing roadnetworks are in terrible condition, heavily however, existing road networks are in terrible condition, heavily congested, and often plagued by crime and other social vices congested, and often plagued by crime and other social vices

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Source: nigeriafirst.org 2006 article – “Revamping the Nigerian Railway”

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Challenges With Nigeria’s Road Systems
Chronic and historicalunderinvestment, and lack of accountability over past expenditure Lack of basic forward planning and needs/feasibility analysis – focus is usually on moving straight to construction instead of on providing solutions Out-of-date standards that are rarely enforced anyway, and/or minimalist Regulatory Framework in place Poor quality of construction by inexperienced road builders - many roads simplydon’t last and are doomed to fail from the start Inadequate or non-existent drainage systems, parking and other facilities Lack of maintenance culture plus no concept of operation of road infrastructure / services Poor road discipline, bad driving skills/habits, ineffective law enforcement Overloading of vehicles and significant use of non-roadworthy vehicles Inappropriate use of and uncontrolled...