Angola The Business Opportunity You Never Knew About João Caiado Guerreiro

Angola

The Business Opportunity You Never Knew About

João Caiado Guerreiro

The present powerpoint presentation was drafted considering, amongst others, the following sources*:CIA World Factbook;

U.S. Department of State;

Diário Económico;

Reuters News Corporation;

Africa Energy Intelligence;

Energy Information Administration – Official Energy Statistics of the U.S. Government.

*Please note that due to the fact that Angola is a third world country the data

contained herewith varies from source to source.

HIGH LEVELS OF GROWTH

ECONOMIC AND FINANCIAL CRISIS, PERIOD OF RECESSION

THE WORLD

ANGOLA

ANGOLA IS 5 TIMES THE SIZE OF THE UNITED KINGDOM AND

OVER TWICE THE SIZE OF FRANCE

INTERESTING FACTS:

• Population – 17,500,000• Capital – Luanda• Area – 1,246,700 sq km• Language – Portuguese• Currency – Kwanza• GDP – 84 billion USD *• GDP per capita – 4,941

USD *

*U.S. Department of State

Angola has made remarkable progress since its nearly 30-year civil war came to an end with the signing of a peace agreement in April 2002.

BEFORE 2002

AFTER 2002

CIVIL WAR

FASTEST GROWING

ECONOMY IN AFRICA

YearGDP - real

growth rateRank

2003 9.00 % 10

2004 1.50 % 156

2005 11.70 % 8

2006 19.90 % 2

2007 15.00 % 4

2008 16.70 % 4

FOURTH FASTEST GROWING ECONOMY IN THE WORLD - an average GDP growth rate of 15% (2002-2008)

OIL PRODUCTION

UNITED ARABEMIRATES

ANGOLA

NIGERIA

2,100

Million barrels per day

1,889

2,948

Angola is now a peaceful country; strategic geographic location; macroeconomic stability; inflation in single digits; growing international currency reserves; per capita income is now approaching that of middle

income countries – 4,941 USD; it used to be a marxist country, whereas now the

Government is promoting free enterprise, trade and investment.

WHY ANGOLA?

POLITICAL STABILITY

FREE DEMOCRATIC ELECTIONS - 5th of September of 2008 (MPLA won with 81,64%).

EXPECTED PRESIDENTIAL ELECTIONS IN 2009 - having the same President since 1979.

PORTUGAL IS THE PRIVILEGED PLATFORM FOR ACCESS TO ANGOLA

historical and cultural proximity (Angola was a Portuguese colony up until 1975);

Portuguese speaking country;

easy access from Lisbon which has 3/4 daily flights to Luanda;

Angolan law is inspired by Portuguese law (same civil code; corporate code, etc.).

Bilateral Investment Treaty

provides incentives, as well as additional protection to investors from both countries.

Agreement on Enforcement of Court Judgements

42 CONVENTIONS AND TREATIES BETWEEN PORTUGAL AND ANGOLA

promotes the Judicial and Judiciary Cooperation between Portugal and Angola.

Customs Cooperation Agreement

promotes the customs’ technical cooperation between Portugal and Angola.

ANGOLAN LAW

Portuguese law as of 1975

Same Civil Code;

Similar Corporate Code;

The only differences relate mainly to details, except for Oil Law.

WHY INVEST IN ANGOLA? Government is committed to progress and investment:

political stability

establishment of a legal regime of incentives; economic and political reforms; free-market economy principles; offers credible legal protection and stability to

investments.

•Democratic legislative elections in September 2008

•Presidential elections expected in 2009

Incentives

Eligibility criteriaThe tax and customs incentives, exemptions or reductions shall be granted in accordance with the following criteria:

Sector of activity

Development zone                 Special economic area          

Sectors of Activity

agro-forestry/cattle; manufacturing; fishing; construction; health and education; roadway, railway, port, airport, telecommunications, energy and water infrastructures.

Development Zones

Zone A - Province of Luanda, as well as the main municipalities of the provinces of Benguela, Huíla and Cabinda.

Zone B - Remaining municipalities of the provinces of Benguela, Cabinda and Huíla and provinces of Kwanza Sul, Bengo, Uíge, Kwanza Norte, Lunda Norte, Lunda Sul and Zaire.

Zone C - Provinces of Huambo, Bié, Moxico, Kuando-Kubango, Cunene, Namibe and Malange.

Special Economic Zones

These areas are defined by the government on a project need basis.

Angola is one of the most difficult, yet most rewarding countries to do

business in…

SPECIFIC OPPORTUNITIES IN 5 KEY SECTORS:

1. Energy & Renewable Energy

2. Housing and Infra-Structures

3. Agriculture

4. Mining

5. Manufacturing

1. ENERGY

OIL

GAS

OIL

Angola’s economy growth is mostly due to the increase of oil production.

The control of the oil sector is secured by a State-owned group - SONANGOL.

ANGOLA was in 2008 the biggest oil producer in Africa.

OTHER INTERESTING FACTS REGARDING OIL PRODUCTION IN ANGOLA:

Proven oil reserves of 9.0 billion barrels9.0 billion barrels as of January 2008;

Oil production expected to reach 2,8 million2,8 million bpd by 2012;

In the oil sector Angola always hits its growth targets, because it always respects its contracts;

Sonangol works together with ExxonMobil, Chevron, Shell, BP, Petrobrás, Galp, Total, etc.Please note that according to recent news and following the oil prices’ reduction, Angola, as an OPEC member, will be forced to decrease its oil production to 1,55 million barrels per day.

NEW IMPORTANT PROJECTS:

SINOPEC

SONAREF

SINOPEC

China’s state oil company;

Entered the market offering two separate 1 billion USD signing bonus offers on two offshore blocks;

Formed a partnership with Sonangol.

SONAREF

Refinery in the coastal city of Lobito with capacity for a production of 200,000 bbl/d;

The project is worth 3.5 billion USD and is able to process heavy crudes;

Sonangol is proceeding with the project and refining is to start in 2012.

NATURAL GAS

Angola is a world-class hydrocarbon region and its role is expected to increase in the future.

Regarding natural gas, there are currently some projects in Angola for its transport from the oil reservoirs located offshore into the international markets, starting as of 2012.

LIQUIFIED NATURAL GAS PROJECT

Angola LNG Project is a joint venture between the following investors:

Sonangol Chevron BP Total ENIHaving already invested US $ 4bn, in order to produce 5.2 million tones a year.

To develop a Liquefied Natural Gas plant in Soyo, Zaire Province, Republic of Angola, to export it to Atlantic Basin markets and provide natural gas for use in the Angolan domestic market.

ANGOLA’S LNG PROJECT MISSION

THE DEVELOPMENT OF THE LNG PROJECT INCLUDES:

the construction of an onshore liquefaction train with storage capacity of 360,000 cm for LNG, LPG (liquified petroleum gas) and condensate;

a loading jetty for LNG tankers;

the building of a pipeline to transport natural gas to Angolan markets.

Although the total project cost has not been released, Angola LNG Project has been considered as the "largest single investment ever made in Angola" by Angola’s minister of petroleum.

Despite the aforementioned, it is estimated that such investment shall reach around 8 billion dollars.

TOTAL INVESTMENT

ANGOLA IS SET TO EXEMPT COMPANIES EXPLORING FOR NATURAL GAS FROM

PAYING TAXES

On the 24th of March 2009 the Angolan Parliament voted as to allow the Government to implement a law

that exempts gas firms in Angola from any tax burdens.

SONANGAS (subsidiary of state-owned oil company

Sonangol)

10-YEAR GAS EXPLORATION RIGHTS

Eni Angola Exploration BV, Gas Natural West Africa SL, Galp Exploration Petrolifera SA and

Exem Energy BV

Opportunities for all types of companies in the Oil & Gas sector

Involved are already the big players (ExxonMobil, Shell, BP, Eni, etc.) and their usual suppliers (Technip, Schlumberger, Halliburton, Bechtel).

Nonetheless, there remain abundant opportunities for all types of suppliers, from CateringCatering to Hotel and Engineering services!

The distribution of electricity in the country is not uniform due to a destroyed network, so Angola’s government decided to bet on renewable energies.

RENEWABLES

SOLAR POWER

WIND POWER

HYDROPOWER

FIRST FORCE – BIODIESEL PROJECT

First Force is a sound project in the field of crude vegetable oils for international biodiesel industry that is commited to contribute to Angola’s development.

PROJECT FUNDAMENTALS

Off-take pre-ageements with leading biodiesel players;

Investment of $200-$300 million;

Privileged access to the European markets;

Initial target production of 200,000 metric tons;

Life-span of 25 years.

299,000 ha

Total arable land

670,000tons

Crushing capacity

beans

172,000tons

Oil Production

$ 210 M

CapEx(cum. 3 years)

Sales

$ 171 M

400,000tons

OilseedMeal

First Force in numbers: Angola

2. HOUSING AND INFRA-STRUCTURES

END OF DEVASTATING 27-YEAR CIVIL WAR IN 2002:

Angola’s government engaged in a considerable reconstruction of roads, railways, bridges, airports, schools, hospitals and residential housing.

In 2005 the Government began using a vast amount of credit from China (around 7 billion

USD) to rebuild Angola’s public infrastructures, as well as for the investment in

several other large-scale projects.

Meanwhile, other countries such as Portugal (providing around 2 billion USD),

Brazil and Germany also started financing Angola through huge credit

lines worth several billions of dollars, in order to contribute to the country’s

overall development.

National construction programme

1 million houses by 2012

Ministry of Hotel and Tourism plans to build around

50 new hotels before 2010 when Angola hosts the

African Soccer tournament.

GOVERNMENT SUPPORT PROGRAMMES:

ONE MILLION HOUSES BY 2012

Public-private partnerships for purposes of housing construction are being created.

HOW WILL THE COMPANIES BE SELECTED?

Via tendering procedure where the most advantageous tender will be chosen.

In this context, some contracts have already been awarded to local companies for the building of approximately 200.000 houses.

Consequently, there is an opportunity in what regards supplying some of these companies.

TOTAL ROADWAYS: 76,626 km

Paved – 19,156 km

Unpaved – 57,470 km

2009 - approximately 4,835 kilometres of roads have been asphalted and repaired.

ROADWAYS:

PORTS AND AIRPORTS

In what regards this matter there is still a lot to be done…

Building

Repair

Maintenance

PORTS

Cabinda LobitoLuanda NamibeMalongo

Shipbuilding and repair industry

Trade development

Job creation

AIRPORTS

TOTAL – 211

With Paved Runways – 30

With Unpaved Runways - 181

FOREIGN WORKERS IN ANGOLA

Any foreign worker in Angola needs to hold a working visa. To obtain this visa, the worker has to comply with the following requirements:

hold a passport valid for more than 6 months; have an adequate visa; have at least USD 200 for each day in Angola, and accommodation; have an international vaccination certificate; and not being prohibited from entering the country.

3. AGRICULTURE

Angola has launched an ambitious plan to exploit both its fertile soils and

high global food prices to attract investments in

agriculture over the next four years.

Of its 57.4 million ha of arable land, only 5 - 8

million ha are being used.

Extensive river system

Varied environment

Arable lands

Huge water reserves

Potential for production of tropical andsubtropical crops

ANGOLA’S MAIN AGRICULTURAL PRODUCTS:

CoffeeSugarcane

CottonSisalCorn

ManiocTobaccoBananas

Medium-Term Development Programme for 2009-2013 of the Ministry of Agriculture and Rural Development (Minader) More than 400 million USD.

Financing of small and medium producers, as well as associations and cooperatives who operate in this sector Credit line of 350 million USD.

GOVERNMENT SUPPORT PROGRAMMES:

Creation of 14 agro-forestry research centers Credit line of 7, 3 million USD

High-quality coffee production

Credit line of 280 million USD

Public funds in the amount of 1.000 million USD;

Creation of 78,000 work posts;

Increase on the cereal production which shall reach 385 thousand tons within the next three years;

Construction of 55,000 houses in the rural areas together with 127 new schools, 127 medical centers, 71 rural markets, as well as 130 convenience stores.

DEVELOPMENT PLAN FOR AGRICULTURE

4. MINING

Angola is a resource of top quality gemstones and Luanda’s region is one of the most important and prosperous diamond producing areas in the world.

According to recent studies it is estimated that the Angolan subsoil contains 35 of the 45 most important minerals traded in the world. The country’s diamond production in 2007 reached approximately 9.7 million carats.

5. MANUFACTURING

The Angolan Government is set to relaunch the manufacturing industry in the country during the period of 2009/2012.

REQUIREMENTS:

increase of value of natural resources;

rehabilitation of the industrial park;

promotion of complementarity of the industrial structure.

MODERN INDUSTRIAL SEGMENT

UPDATED TECHNOLOGY

INTERNATIONAL COMPETITIVENESS

EXPECTED DEVELOPMENT IN THE MANUFACTURING SECTOR (albeit from a very low

base)

31,9%

35,0%

36,9%

GROWTH

2010

2011

2012

MAIN INDUSTRIES TO BE DEVELOPED IN THE MANUFACTURING SECTOR:

Machines and equipment, tools and accessories;

Textile and footwear;

Timber;

Cellulose and paper pulp;

Building materials;

Petrochemical;

Ships construction, repair and maintenance.

HOW TO INCORPORATE A COMPANY (main steps) :

Define corporate name / activity

Articles of Association by public deed

Commercial Corporation Registry

Social Security

Commercial License

Declaration of start of activity

ANGOLA,

The opportunity you will not want to lose and which Franco Caiado Guerreiro & Associados

will help you explore…

Contact Us

Franco Caiado Guerreiro & Associados Rua Castilho, n.º 39 – 15º 1250-068 Lisboa Tel.: 213717000 / Fax: 213717001

www.fcguerreiro.com

João Caiado Guerreiro jguerreiro@fcguerreiro.com

Sara Galvão Soares ssoares@fcguerreiro.com