project: air cote d’ivoire modernization & expansion ... · currency equivalents august 2017...
TRANSCRIPT
AFRICAN DEVELOPMENT BANK GROUP
PROJECT: AIR COTE D’IVOIRE MODERNIZATION
& EXPANSION PROGRAM
COUNTRY: COTE D’IVOIRE
PROJECT APPRAISAL REPORT
PICU DEPARTMENT
October 2017
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TABLE OF CONTENTS
1. STRATEGIC THRUST AND RATIONALE OF THE PROJECT............................................. 1 1.1 Project Linkages with Country Strategy and Objectives ..........................................................................1
1.2 Rationale for the Bank’s Involvement ......................................................................................................1
1.3 Donor Coordination ..................................................................................................................................3
2. PROJECT DESCRIPTION ............................................................................................................ 4 2.1 Project Objectives and Components .........................................................................................................4
2.2 Technical Solution Retained and Alternative Solutions Considered ........................................................5
2.3 Project Type..............................................................................................................................................6
2.4 Project Cost Estimate and Financing Mechanisms ...................................................................................7
2.5 Project Area and Beneficiaries .................................................................................................................9
2.6 Participatory Approach to Project Identification, Design and Implementation ...................................... 10
2.7 Bank Group Experience and Lessons Reflected in Project Design ........................................................ 10
2.8 Key Performance Indicators ................................................................................................................... 11
3. PROJECT FEASIBILITY ............................................................................................................ 11 3.1 Financial & Economic Performance ....................................................................................................... 11
3.2 Environmental and Social Impact ........................................................................................................... 13
3.3 Implementation Arrangements ............................................................................................................... 15
3.4 Monitoring and Evaluation ..................................................................................................................... 18
3.5 Governance ............................................................................................................................................. 18
3.6 Sustainability .......................................................................................................................................... 19
3.7 Risk Management ................................................................................................................................... 19
3.8 Knowledge Development ....................................................................................................................... 20
4. LEGAL FRAMEWORK ............................................................................................................... 20 4.1 Legal Instrument ..................................................................................................................................... 20
4.2 Conditions Associated with the Bank’s Intervention .............................................................................. 20
4.3 Conformity with Bank Policies .............................................................................................................. 21
5. RECOMMENDATION ................................................................................................................. 21
APPENDIX 1: SUMMARY OF ISSUES TO CLARIFY DURING THE INFORMAL BOARD SESSION ON ACI
ANNEX I: COUNTRY MAP
ANNEX II: COMPARATIVE SOCIO-ECONOMIC INDICATORS OF CÔTE D’IVOIRE
ANNEX III: NATIONAL ACTIVE PROJECTS AS OF MAY 2017
ANNEX IV: ORGANISATIONAL STRUCTURE OF AIR CÔTE D’IVOIRE
ANNEX V: AIR CÔTE D’IVOIRE: FINANCIALS
ANNEX VI : ORGANISATIONAL STRUCTURE OF AIR CÔTE D’IVOIRE
LIST OF TABLES
No Title Page
1 Estimated Project costs per component 7
2 Source of Financing 7
3 Project activities financed by ADB Sovereign Loan and ADF PBA 8
4 Air Côte D’Ivoire Operational Data 12
5 Schedule for New Capital increase 12
6 Sensitivity Analysis 13
7 Economic Analysis 13
8 Project Monitoring and Supervision Schedule 18
9 Project Risk Matrix 19
Currency Equivalents August 2017
UA 1 = 1.40775
USD UA 1 = 1.20043
EUR UA 1 = 787.43046
CFA Euro 1 = 1.1727
USD
Fiscal Year 1st January – 31st December
Weights and Measures
1 metric ton = 2204 pounds
1 metre (m) = 3.28 feet
1 millimetre (mm) = 0.03937 inch
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres
Acronyms and Abbreviations ACI : Air Côte D’Ivoire
AfDB : African Development Bank
ADF : African Development Fund
AFRAA : Africa Airline Association
ANAC : Autorité Nationale de l’Aviation Civile
BFE : Buyer Furnished Equipment
CFA : Communauté Financière Africaine
CPPR : Country Portfolio Performance Review
CSP : Country Strategy Paper
DSCR : Debt Service Cover Ratio
EBIT : Earnings before Interest and Tax
GoC : Republic of Côte D’Ivoire
GDP : Gross Domestic Product
ICAO : International Civil Aviation Organization
IDEV : Independent Development Evaluation
IFMIS : Integrated Financial Management and Information System
IAAG : Institut Aeronautique Amaury de la Grange
INP-HB : Institut National Polytechnique Félix Houphouët-Boigny
NDP : National Development Plan
NPV : Net Present Value
PCR : Project Completion Report
PDP : Pre Delivery Payments
PFM : Public Financial Management
PPP : Public Private Partnership
PRG : Partial Risk Guarantee
RPK : Revenue Passenger Kilometers
SMH : Short Medium Haul
SOE : State Owned Enterprise
SPV : Special Purpose Vehicle
TA : Technical Assistance
WAEMU : West African Economic and Monetary Union
WCA : West and Central Africa
ii
PROJECT INFORMATION SHEET
Client Information
Borrower: REPUBLIC OF CÔTE D’IVOIRE
Project Area: REGIONS OF ABIDJAN, CÔTE D’IVOIRE AND WEST AFRICA
Executing Agencies: AIR CÔTE D’IVOIRE
Financing Plan
Key African Development Bank (AfDB) Financial Information
ADB Loan Financing Terms
Loan currency: Euro (EUR)
Type of Loan: Fully flexible loan
Maturity: 20 years, including the grace period
Grace period: 5 years
Average Loan Maturity TBD (function of the maturity, grace period and amortization profile)
Repayments: Six monthly instalments
Interest rate: Base rate + Funding margin + Lending spread + Maturity premium
Base rate: Floating base rate (EURIBOR EUR - 6 months, reset each 1st February and 1st
August). A free option for determination of the base rate is available
Funding margin: The Bank’s funding margin is revised every 1st January and 1st July and applied
every 1st February and 1st August with the base rate
Lending spread: 80 basis points (0.80%)
Maturity premium: 0.20%
Option to convert the Base Rate In addition to the free option to fix the floating Base Rate, the borrower may
reconvert the fix rate to floating or refix it on part or full disbursed amount.
Transaction fees are payable1
Option to cap or collar the Base
Rate
The borrower may cap or set both cap and floor on the Base Rate to be applied
on part or full disbursed amount
Transaction fees are payable
Option to convert loan currency The borrower may convert the loan currency for both undisbursed or disbursed
amounts in full or part to another approved lending currency of the Bank
Transaction fees are payable
Front-end fees 0.25% of the loan amount,
Commitment fee 0.25% per year of non-disbursed amount starts to accrue 60 days after the date of
signature of the loan agreement and is payable on the set payment dates.
FRR Not Applicable
ENPV (baseline scenario): US$32.227 million
ERR (base-case scenario): 17.6%
1 Conversion options and transaction fees are subject to the Bank Conversion Guidelines
FE LC Total Cost FE LC Total
Cost
FE LC Total Cost
A. Aircraft Acquisition (5 No) 222.222 - 222.222 185.118 - 185.118 145,767.684 - 145,767.684 100% 87%
ADB Sovereign (Loan) 51.164 - 51.164 42.621 - 42.621 33,561.234 - 33,561.234 23% 20%
ADB Non-Sovereign (Loan) 42.637 - 42.637 35.518 - 35.518 27,967.695 - 27,967.695 19% 17%
INVESTEC (Loan) 25.582 - 25.582 21.311 - 21.311 16,780.617 - 16,780.617 12% 10%
Commercial Banks (Loan) 69.506 - 69.506 57.901 - 57.901 45,592.984 - 45,592.984 31% 27%
Air Cote d'Ivoire (Equity) 33.333 - 33.333 27.768 - 27.768 21,865.153 - 21,865.153 15% 13%
B. Technical Assistance 0.665 12.928 13.594 0.554 10.770 11.324 436.296 8,480.502 8,916.798 5% 5%
ADF PBA (Loan) 0.665 3.496 4.161 0.554 2.912 3.467 436.296 2,293.351 2,729.647 31% 2%
Air Cote d'Ivoire (Equity) - 9.432 9.432 - 7.857 7.857 - 6,187.151 6,187.151 69% 3%
C. Credit Enhancement 17.055 - 17.055 14.207 - 14.207 11,187.078 - 11,187.078 100% 7%
ADF PBA (Guarantee) 17.055 - 17.055 14.207 - 14.207 11,187.078 - 11,187.078 100% 7%
D. Audit - 0.102 0.102 - 0.085 0.085 - 67.122 67.122 100% 1%
ADF PBA (Loan) - 0.102 0.102 - 0.085 0.085 - 67.122 67.122 100% 1%
TOTAL PROJECT COST 239.942 13.031 252.973 199.879 10.855 210.734 157,391.058 8,547.624 165,938.682 100% 100%
SOURCE % of
Component
% of
Project
EUR (million) UA (million) CFA (million)
iii
ADF Partial Risk Guarantee & ADF Loan Financing Terms
FINANCING INSTRUMENT ADF PRG ADF LOAN
Purpose Guarantee to cover lease payments from ACI
to the SPV
TA & Audit
Commitment Currency UA UA
Disbursement/Guaranteed
Obligations currency
EUR EUR
Amount EUR17.055 million
equivalent (US$20 million)
EUR4.264 million
equivalent (US$5 million)
Interest Rate NA 1%
Service charge NA 0.75%
Commitment Fee NA 0.50%
Guarantee Fee Equivalent to an ADF loan service charge of
0.75% per annum on the face value of the
drawn portion of the Guaranteed Amount.
NA
Front-end Fee 1.00% of the face value of the Guarantee. NA
Standby Fee Equivalent to an ADF loan commitment fee
of 0.50% per annum and will be charged on
the face value of undrawn portion of the
Guaranteed Amount
NA
Other Fees Legal and other out of pocket expenses
incurred by the ADF during the initiation,
appraisal and underwriting process of a
guarantee, other than the Banks traditional
operational expenses, will be charged to the
beneficiary
NA
Tenor 12 years 25 years
Grace Period 2 years 5 years
Duration – Processing Milestones (projected)
Activities (Month, Year)
Approval of the concept note May 2017
Project approval September 2017
Effectiveness October 2017
Last disbursement December 2023
Completion July 2022
iv
PROJECT SUMMARY
General Overview of Project
1. The Ivorian economy has performed quite well in the past decade, whilst demonstrating resilience to
economic headwinds. The economy grew 8.9% in 2015 and 8.4% in 2016. While growth is expected to
slow slightly in 2017 at 7.3%, mainly due to decline in agricultural exports, the economy is expected to
rebound to 8.1% in 2018. Diversification of the economy and the quality of same is essential to support
and sustain economic growth. In view of diversification, Côte D’Ivoire’s geographical location
alongside its commercial and demographic assets, positions it as an aviation hub in West and Central
Africa region (WCA), with the ease to connect traffic from within the continent and to the outside world.
The Government of the Republic of Côte D’Ivoire (GoC) is keen to leverage this national advantage to
develop Abidjan into a hub and to respond to the growing demand for an aviation hub to serve the WCA
region. This objective is well defined in the country’s National Development Plan (NDP 2016 - 2020)
and its Vision 2040, and Air Côte D’Ivoire (ACI), “a national carrier”, is expected to play a crucial role
towards its actualization. The proposed Air Côte D’Ivoire Modernization & Expansion Program (“the
Project”) is aimed at repositioning ACI to deliver on this mandate.
2. The Project is a PPP intervention with a mix of financing, knowledge, and policy solutions. It
involves: (i) acquisition of 5 Airbus 320 series aircrafts2 via a lease buyback (bankruptcy remote Special
Purpose Vehicle (SPV)) structure, (ii) an ADF Partial Risk Guarantee (PRG) with guarantee coverage
of EUR17.055 million (equivalent US$20 million) with only US$4.264 million or UA3.552 million of
the country’s PBA will be set aside to backstop ACI’s annual lease payment commitments to the SPV
that has been created to ring-fence the aircrafts, (iii) Technical Assistance Package for aviation industry
capacity development - training of pilots and aviation technicians, and a business plan towards
establishing an Aviation Training center of excellence, and support to improving aviation business
climate with regard to Tax, Fees, and Charges and (iv) financial and procurement audit of the
components financed by the Bank. The Project will beef-up the Airline’s capacity to execute its 10 year
growth strategy (2017–26). The total project cost is estimated at EUR252.973 million. The Project is
first of its kind for the Bank with a novel transaction structure which records another first in the use of
the Bank’s Partial Risk Guarantee for the Transport sector in Africa.
3. The Project supports the regional integration strategies (RISPs) for West Africa and Central Africa
(2011–2017: both RISPs period) which promotes investments in regional transport infrastructure and
transport facilitation measures to boost regional integration. It is also in line with the Bank’s Country
Strategy Paper (CSP) 2013-2017 for Côte D’Ivoire which anchors on two pillars: (i) Strengthening of
governance and accountability and (ii) Infrastructure development in support of economic recovery.
The Project aligns with the Bank’s Ten Year Strategy (TYS), and Hi5 priorities in terms of (i) “Integrate
Africa” by improving air connectivity in WCA region and enhancing intra-regional trade and (ii)
“Improving the quality of life of the people of Africa” through Tourism and its related jobs creation and
private sector development. The Project also complements the Bank’s Transport policy in supporting
core transport/aviation infrastructure development, regional integration, and technical skill capacity
building. It is tandem with the Bank’s Private Sector Development Strategy in developing productive
and competitive enterprises. This Project would contribute towards job creation, private sector
development, tourism, and improve access to transport to +73 million people under ADF 14 cycle.
Needs Assessment
4. Despite growing at an annual average of +9% between 2009 and 2014 (above global average of 5.8%,
and Africa average of 6.1%) with projected growth at 7% from now till 2020, West and Central Africa
region remains the most poorly connected and disadvantaged aviation market in the continent with huge
2 The acquisition of five aircrafts including: two A320CEO, three A320NEO (with the option to convert the last two A320NEO aircrafts
to A319NEO as per the purchase agreement signed with AirBus and based on traffic demand/competition).
v
suppressed demand – a situation that as hampered regional growth and integration. While intra-Africa
trade is currently at 18% - the lowest globally, a deeper analysis of the regional economic communities
(RECs) is even more unpromising. Intra-trade of total Africa trade in ECOWAS (8.9%) and CEMAC
(2.1%) lag behind other RECs e.g. SADC (19.3%), EAC (18.4%) due to poor regional transportation
links – air, road, and sea.
5. Today, WCA region experiences an aviation market failure. While other regions in the continent
have developed aviation hubs and air corridors with significant boost on regional economic growth -
Johannesburg (Southern Africa), Casablanca and Cairo (Northern Africa), Addis Ababa and Nairobi
(Eastern Africa), all backed by strong national carriers with considerable public support, WCA region
is lacking – there is no national carrier in the region that can support intra-regional connectivity and no
viable hub(s), albeit Lomé (home to ASKY) which appears as an emerging hub, but is quite small
compared to: (i) the region’s market size and (ii) to busier airports such as Lagos, Abidjan, and Accra.
Insufficient and/or poorly developed nature of other modes of transport makes air transport a vital and
inevitable alternative to link countries in the WCA region. This Project would therefore support ACI -
a young Short and Medium Haul (SMH) Airline with positive signs of growth, to contribute towards
addressing the connectivity deficit in WCA region by improving air connectivity, enhancing market
competition, and boosting regional trade and integration. It is noted that the airport of Abidjan is
undergoing an expansion process including construction of a new terminal and parallel taxiway to
support ACI’s business plan and the Abidjan Hub Development Agenda. The funds for the airport
expansion have been secured and procurement has already commenced.
Value-added for the Bank
6. The Bank is already supporting the aviation sector in WCA and the continent at large. These include:
i) infrastructure development such as the new terminal construction at the Kotoka International Airport
in Accra, Ghana, and construction of the Blaise Diagne International airport in Dakar, Senegal, etc; ii)
promotion of aviation safety through the PASTACO and COSCAP projects; iii) aircraft financing to
Ethiopian airlines; iv) Technical Assistance support to AFCACA on implementation of the YD. Given
these foregoing interventions, the Bank is seeking to develop a strategic framework to guide its
interventions and provide solutions on addressing the bottlenecks of Africa’s Aviation industry. The
approach paper provided to date indicate that the main challenges and cost structures (60% aggregate)
include Aircraft financing, Fuel & Oil cost, Maintenance & Overhaul, crew cost, and capacity building.
The Bank’s role in this Project will create broad-based value and comprehensively addresses the above
challenges and growth needs of ACI, without which the transaction will otherwise be very costly and
hardly bankable. The solution provides long term financing for ACI at cost-effective terms, crowds-in
commercial lenders, and positions ACI on its ramp up growth plan, with increased operational capacity
and cost efficiency. Through the Technical Assistance package, the capacity of the region’s aviation
industry will be further enhanced.
Knowledge Management
7. The project will provide the Bank an opportunity to deepen its knowledge on aviation finance, beef-
up understanding on the key issues affecting the industry, and maximizing the impact of the aviation
sector in stimulating regional integration, trade, job creation, and economic growth. The monitoring and
evaluation of impact from the Project have been specifically designed to build and disseminate this
knowledge to the entities in charge of aviation policies at the national and regional levels. The key
lessons and knowledge gained in designing this novel transaction structure could serve as a model to be
replicated in future aviation finance projects.
vi
Results-Based Logical Framework of the Project
Country and project name: Air Cote D’Ivoire (ACI) Modernization & Expansion Program
Purpose of the project: is to develop the Air transport sector in West and Central Africa through the modernization and expansion of ACI and beefing up its capacity to implement its 10 year growth strategy (2017 – 26)
with the ultimate aim to drive national/regional economic integration and trade
RESULTS CHAIN PERFORMANCE INDICATORS MEANS OF
VERIFICATION RISKS/MITIGATION MEASURES
Indicator (incl. CSI) Baseline Target
IMP
AC
T
(i) Aviation contribution to economic
growth
(ii) Regional integration and Trade
facilitation
(i) Percentage of GDP
(ii) Passenger Traffic & % cargo growth
facilitate by aviation (ACI)
(i) 2.7%
(ii) 719,972 PAX , 0%
2016
(i) 4%
(ii) over 1.2 million PAX, 35%
By 2030
Ministry of Plan Annual
Report
World Travel & Tourism
Council Report
Risks
ACI Modernization & Expansion Program is
not implemented and ACI is unable to execute
its 10 year strategy.
INP-HB fails to execute Business Plan for the
TA Training Program.
Mitigation Measures
Broad stakeholders’ engagement is sustained.
ACI and INP-HB have requisite experience
and commitment to fully implement the 10
year strategy and TA program respectively. OU
TC
OM
ES
i) Improved National and Regional
connectivity
ii) Increased no. of passengers
iii) Boost in Tourism
iv) Improved aviation industry
capacity
v) Increased Airport Capacity
i) No. of Domestic and Regional
connections
ii) No. of Passengers
iii) Revenue generated from tourism
iv) % of local pilots and technicians
v) Capacity of airport (passengers/yr)
i) 3 Domestic, 19 Regional
ii) 719,972 passengers
iii) CFA346bn
iv) 20%
v) 3 million passengers/yr
2016
i) 5 Domestic; 23 Regional destinations
ii) 1,039,329 passengers
iii) CFA563bn
iv) 60%
v) 8+ million passengers / yr
By 2026
ANAC Annual Reports
Air Cote D’ Ivoire (ACI)
Annual Report
INP-HB Program
Reports
OU
TP
UT
S
(i) Aircraft Acquisition is successful
(ii) Training of Pilots and Technicians
is concluded
(iii) Jobs creation
(iv) Consultancy for Business Plan for
INP-HB is concluded
(v) Aviation Policy study is
concluded
(vi) Resource Mobilization from
Commercial banks via ADF PRG
is successful
(vii) Financial audit services completed
i) No. of Aircrafts purchased and ring-
fenced in SPV
ii) No of Pilots and Technicians trained
iii) No. of direct and indirect jobs created
(gender disaggregated)
iv) Business plan is approved
v) Aviation policy study
recommendations adopted by
Government
vi) Commercial lenders leveraged by
PRG
vii) Audit reports completed
(i) 0
(ii) 0
(iii) 529 direct; 1,600
indirect jobs
(iv) 0
(v) 0
(vi) 0
(vii) 0
2016
(i) A320/A319 (x5) purchased
(ii) 47 pilots, 45 Technicians trained (35%
female)
(iii) 684 direct; 3,000 indirect (35%)
(iv) Business Plan is adopted
(v) Aviation policy study adopted
(vi) At least US$111.5 million
commercial lending is mobilized
(vii) All Audit reports cleared and
accepted by the Bank
By 2020
Supervision Reports
Project completion
report.
Risks (detailed matrix captured in table 9)
i) Financing; ii) Environmental; iii)
Operational; iv) Regulation; v) Market
Mitigation measures
i)ADF PRG will help leverage commercial
lenders to close the transaction; ii) New fleet
will result in reduced CO2 emissions and
carbon footprint; iii) New acquisition will
improve cost structure; iv) ANAC and ICAO
regular inspections and audits; v) ACI’s
implementation of its business plan
KE
Y A
CT
IVIT
IES
COMPONENTS INPUTS
A. Aircraft Acquisition
B. Technical Assistance –
i) Pilot Training Program
ii) Aviation Technical Training Program
iii) Study to improve Aviation Policy environment
iv) TA Business Plan INP-HB
C. Partial Risk Guarantee – to backstop ACI lease payment
D. Audit
vii
Implementation Schedule
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84
11Study to improve Aviation Policy
environment
12Strategy and Business Plan for INP-
HB
2023
Q1 Q2 Q3 Q4
2022
Q1 Q2 Q3 Q4
2021
Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4
20202019
Q1 Q2 Q3 Q4
10Training of Technicians (5No batches)
(120)
11 Financial Audit
2018Task Name ID
7 Delivery of 4th Aircraft
8 Delivery of 5th Aircraft
9 Training of Pilots (5No batches) (77)
4 Delivery of 1st Aircraft
5 Delivery of 2nd Aircraft
6 Delivery of 3rd Aircraft
1 Project Approval
2 Loan Signature
3 Loan Effectiveness
Q3 Q4
2017
Q1 Q2 Q3 Q4 Q1 Q2
1
MANAGEMENT REPORT AND RECOMMENDATION TO THE BOARD OF DIRECTORS ON
THE PROPOSAL TO AWARD A LOAN TO CÔTE D’IVOIRE TO FINANCE THE AIR CÔTE
D’IVOIRE MODERNIZATION & EXPANSION PROGRAM
Management hereby submits this report and recommendation concerning a proposal to award ADB
sovereign loan of EUR51.164 million (US$60.000 million equivalent), an ADF loan of UA3.552
million (EUR4.264 million or US$5.000 million) and an ADF Partial Risk Guarantee (“PRG”) of
EUR17.055 million (US$20.000 million equivalent of which EUR4.264 million or US$5.000 million
equivalent or UA3.552 million will be set aside from Côte D’Ivoire’s PBA) to the Republic of Côte
D’Ivoire to finance the Air Côte D’Ivoire Modernization & Expansion Program.
1. STRATEGIC THRUST AND RATIONALE OF THE PROJECT
1.1 Project Linkages with Country Strategy and Objectives
1.1.1 Côte D’Ivoire’s geographical location alongside its commercial and demographic assets, positions
it as an aviation hub in West and Central Africa region (WCA), with the ease to connect traffic from
within the continent and to the outside world. The Government of the Republic of Côte D’Ivoire (GoC)
is keen to leverage its national advantage to develop Abidjan into a hub and to respond to the growing
demand for an aviation hub to serve the WCA region. This objective is articulated in the country’s
National Development Plan (NDP 2016 - 2020) of which Air Côte D’Ivoire (ACI), “a national carrier”,
plays a very critical role towards its actualization. The proposed Air Côte D’Ivoire Modernization &
Expansion Program (“the Project”) is aimed at repositioning ACI to deliver on this mandate.
1.1.2 The Project supports the regional integration strategies (RISPs) for West Africa and Central Africa
(2011–2017: both RISPs period) which promotes investments in regional transport infrastructure and
transport facilitation measures to boost regional integration, aligned with the Economic Community of
West African States (ECOWAS) Vision 2020, and Economic Community of Central African States
(ECCAS) Vision 2025. It is also in line with the Bank’s Country Strategy Paper (CSP) 2013-2017 for
Côte D’Ivoire, which anchors on two pillars: (i) Strengthening of governance and accountability and
(ii) Infrastructure development in support of economic recovery. The Project aligns with the Bank’s
Ten Year Strategy (TYS), and Hi5 priorities in terms of (i) Integrate Africa by improving air
connectivity in WCA region and enhancing intra-regional trade and (ii) “Improving the quality of life
of the people of Africa” through Tourism and its related jobs creation and private sector development.
The Project also complements the Bank’s Transport policy in supporting core transport/aviation
infrastructure development, regional integration, and technical skill capacity building. It is tandem with
the Bank’s Private Sector Development Strategy in developing productive and competitive enterprises.
1.2 Rationale for the Bank’s Involvement
1.2.1 Addressing Aviation Market Failure in West and Central Africa (WCA) Region –The
1970s/80s saw African airlines accounting for over 60% of inter-Africa traffic with positive
consequences on trade and integration. Over the same period, almost all the countries in WCA region
were connected by airlines notably Ghana Airways, Nigeria Airways, and Air Afrique - which covered
11 States. Unfortunately, these airlines failed, due to mismanagement and a complex ownership
structure (particularly for Air Afrique), leaving a huge vacuum. Today, WCA region faces an aviation
market failure. While other regions in the continent have developed aviation hubs and air corridors with
significant boost on regional economic growth - Johannesburg (Southern Africa), Casablanca, and Cairo
(Northern Africa), Addis Ababa and Nairobi (Eastern Africa), all backed by strong national carriers
with considerable public support, WCA region is lacking – there is no national carrier in the region that
can support intra-regional connectivity and no viable hub(s), albeit Lomé (home to ASKY) which
appears an emerging hub, but is small compared to the region’s market size and to busier airports such
as Lagos, Abidjan, and Accra. It is to be noted that airport infrastructure expansions and upgrades are
presently ongoing in several WCA cities, as such there is considerable capacity to cater for current and
near future passenger traffic demand. In Abidjan in particular, the main international airport is currently
undergoing an expansion program which includes construction of a new terminal and parallel taxiway to support ACI’s business plan and the Abidjan Hub Development Agenda. The funds for the airport expansion
have been secured and procurement has already commenced.
2
1.2.2 Furthermore, although 12 airlines (mainly domestic airlines in Nigeria) operate in WCA region,
there is little or no competition on the regional market, which is presently served by ASKY. All
Attempts by countries in the region to grant Fifth Freedom rights3 (quite extensive than any part of the
continent) to airlines from outside the region and the continent4 have not sufficiently tackled the issue
of poor and fragmented regional connectivity and integration. There is a growing consensus among
development partners that the use of concessional finance to support directly the private sector could
be justified in situations of market failures. The Bank’s intervention would help to address gaps in
WCA region aviation market, improve air connectivity, and enhance market competition.
1.2.3 Promoting private sector development in an ADF country – Access to Aviation Finance for
Africa Airlines is limited and inadequate, and where available is quite expensive particularly for start-
up airlines such as Air Côte D’Ivoire, due to perceived and real risks. Air Côte D’Ivoire sought financing
from commercial banks but was unable to obtain long-term financing for its aircraft acquisition. Indeed,
very few commercial banks could offer short to medium term financing but at prohibitive terms, with
required guarantees from the state, which the government was not in a position to provide. There is no
aviation leasing platform on the continent while access to aircraft lease market abroad is also more
costly for Africa Airlines compared to their counterparts in other regions (Europe, Asia, North
America etc.). Export Credit Agencies (ECAs) have played a useful role, and remain a source of
financing, however they have become unstable source of financing recently.
1.2.4 During the ADF14 replenishment, the Fund mandated the Bank to promote innovative financing
and policy solutions to address the peculiar needs of the private sector in ADF countries and to crowd
in resources from the private sector via the use of guarantees. Under the recent Presidency of Germany,
the G20 strongly called on Multilateral Development Banks (MDBs) to scale up innovative financing
solutions to mobilize more private sector investment in Africa, by de-risking investments to crowd in
private capital, and promoting Public Private Partnerships (PPPs). Also, a number of bilateral and
development partners have embraced the use of blended finance, as a way to align the financial returns
of projects with their socio-economic returns5. The Bank has also leveraged blended finance in availing
ADF resources through a sovereign entity that invested into a private sector project, while the ADB
directly funded the private sector component of the transaction. Other interventions have been via
dedicated trust funds such as the Sustainable Energy Fund for Africa (SEFA), and the Green
Environment Fund (GEF) etc.
1.2.5 The Bank’s intervention on this project is a PPP solution, which aligns with the above
objectives in supporting a state owned enterprise with significant socio-economic returns of regional
dimension. The Bank is deploying a combination of innovative financing and policy tools which
include an ADF PRG to de-risk the transaction and crowd in about US$112 million from commercial
banks – a leverage factor (1:22 times - ADF PBA allocation to private capital mobilised). Blended
finance from ADB Sovereign and Non-Sovereign windows to support private sector development via
facilitating long term cost effective financing to a start-up Airline operating from an ADF country, with
positive signs of growth, and goal to contribute towards addressing the connectivity deficit in WCA
region. The Bank’s support is also improving aviation business climate by supporting reforms in
aviation Tax, Fees, and Charges, while building industry capacity through the training of pilots and
aircraft technicians. Without the Bank’s intervention the transaction would hardly be bankable.
1.2.6 Supporting Regional public good to boost regional integration – The regional economic
communities (RECs) in WCA region - ECOWAS and Central African Economic and Monetary
Community (CEMAC), have the core mandate to drive regional economic integration. While both RECs
have made progress in restoring peace, containing conflicts, and facilitating the free movement of goods
3 The fifth freedom right is the right for one to fly between two foreign countries on a flight originating or ending in one's own country. 4 Non-African airlines carry over 75% of traffic from the continent, most of which are outbound from the continent with limited impact
on intra-regional traffic. 5 The World Bank, IFC, the EU via the EU Africa Investment Facility, the Intra-American Development Bank and bilateral development
banks such as KfW and CDC have all deployed blended finance facilities to crowd in capital and promote private sector development.
3
and people, the initial aspirations of regional integration have not been met, particularly in deepening
trade and economic cooperation. WCA region remains the most poorly connected and underserved in
the continent – a situation that as hampered regional growth. While intra-Africa trade is currently at
18% - the lowest globally- a deeper look into the RECs is even more depressing. Intra-trade of total
Africa trade in ECOWAS (8.9%) and CEMAC (2.1%) trail other RECs e.g. SADC (19.3%), EAC
(18.4%) due to poor regional transportation connectivity6 – air, road, and sea.
1.2.7 Insufficient and/or poorly developed nature of other modes of transport makes air transport a vital
and inevitable alternative to link countries in WCA region. Overcoming disadvantages arising from
geographic isolation and fragmentation, is a key focus of the ADF which aims to address the
gaps/challenges of regional integration, and to link countries to regional markets. The foregoing also
complements the objectives of “Integrate Africa” priority of the Hi5s which aims to create regional
value chains, leverage complementarities and reduce the costs of movement of goods, services and
people in order to exploit the continent’s huge market potential. The project supports the aspiration of
the RECs in WCA region towards regional integration and would create a considerable regional
public good in a region with the most disadvantaged aviation market, by facilitating connections to
23 destinations and boosting regional integration and trade. The project will ultimately contribute to
the overarching goal of ADF14 to improve access to transport to +73 million people.
1.2.8 In addition to the above, it is worth noting that this Project is expected to positively contribute to
inclusive growth, through its support to three core dimensions of inclusion, namely economic, spatial
and social inclusion. More specifically, the following outcomes are expected: i) contribution to
economic inclusion: the project is expected to help increase economic opportunities for 400 people
through the creation of new direct jobs for them. This corresponds to 1.27 job per million invested,
which is considered as satisfactory. ii) contribution to spatial inclusion: It is expected that Air Cote
d’Ivoire’s expansion and modernization plan will help further unlock 6 transitions states (including
Democratic Republic of Congo, Mali, Liberia, Sierra Leone, Togo and Central Africa Republic) by
generating incremental traffic on Air Cote d’Ivoire’s regional routes connecting them with other
countries. In particular, as a result of the project, Central Africa Republic will be added to Air Cote
d’Ivoire’s destinations network, which should further integrate this transition state with the rest of the
continent. iii) contribution to social inclusion: The project is expected to contribute to narrow the
gender gap in economic opportunities in Cote d’Ivoire by creating 136 new female jobs. This represents
34% of total incremental jobs to be created under the plan, which is higher than the share of female
employment in the non-agricultural sector in Côte d’Ivoire (21%).
1.3 Donor Coordination
1.3.1 Aid coordination is structured at the national and sectoral levels with the formation of working
groups, establishment of the External Resources Mobilization Committee (COMOREX) and
preparation in 2014 of a Joint Aid Coordination Programme. The National Coordination and Financing
System established is a five-level system comprising the National Development Commission chaired
by the Presidency of the Republic, and then a first general coordination level chaired by the Prime
Minister’s Office, which consists of inter-ministerial coordination bodies and the COMOREX platform,
followed by ministerial coordination bodies (technical secretariats) co-chaired by the Ministries of the
Economy and Planning and lastly sectoral coordination groups.
1.3.2 There is also a Development Partner (DP) consultation mechanism which helps to define the
common positions and guidelines for discussions with the Government. It is organised into three levels,
namely the Ambassadors and Mission Heads Consultative Framework, the heads of cooperation
committees and thematic groups. The EU chairs the "Infrastructure" thematic group comprising the
"Transport", "Water and Sanitation", and "Energy and ICT" sub-groups. In addition to the above-
mentioned mechanism, regular consultations are held with the Government to address specific issues.
Details of the donors’ activities are presented in Annex III.
6 Africa regional integration index report (2016) - ECOWAS and ECCAS have a regional infrastructure index of 0.426 and 0.451
respectively below 0.461 average of the 8 RECs in the continent.
4
2. PROJECT DESCRIPTION
2.1 Project Objectives and Components
Project Objectives
2.1.1 The overall objective of the project is to boost national/regional economic growth and integration
by developing the aviation sector in West and Central Africa. This will promote job creation, trade,
tourism, and private sector development. Specifically, the project will improve national/regional
connectivity and support the Abidjan aviation hub concept. It will also address the human capital deficit
in the aviation sector by supporting the training of pilots and aviation technicians while facilitating a
business plan to establish a regional aviation training center of excellence, at INP-HB, Yamoussoukro.
Project Design
2.1.2 The Project is first of its kind for the Bank with a novel transaction structure (see Figure 2 for
transaction structure), which leverages blended finance of ADB Sovereign and Non-Sovereign
resources, and ADF Partial Risk Guarantee (PRG), to address market failure in the most disadvantaged
aviation market in the continent, using global best practice and widely used lease buy back aviation
finance principles. The Project records a major mark as the first use of the Bank’s PRG for the
Transport sector in Africa.
2.1.3 The Project consists of the following main components: The funding of the Technical Assistance
Package and ADF PRG will be funded by the Performance-Based Allocation (PBA) of Côte D’Ivoire
under ADF-14.
A. Aircraft Acquisition – EUR222.222 million (equivalent to UA185.118 million). This component
entails acquisition of 5 Airbus A320 series aircrafts7, including “Buyer Furnished Equipment” (BFE)
aligned to ACI’s specification. The purchase will replace five A320-200s currently being dry leased
on costly terms. Delivery of the aircrafts is as follows: 1st aircraft was delivered in July2017, 2nd
aircraft is due in October 2017, while the remaining 3 aircrafts will be delivered in 2020/2021.
B. Technical Assistance (TA) Package – EUR13.594 million (equivalent to UA11.324 million)
i) Aviation Technical Training Program – EUR12.928 million (equivalent to UA10.770 million): This component will cover Aviation Technical Training Program of additional 77 Aircraft Pilots and
120 Technicians over ACI’s business plan period (2016–2026). The executing agency for this
component will be INP-HB. The Bank will co-finance this component via an ADF loan EUR3.496
million – EUR2.676 million for the 1st and 2nd batch of Pilot training (in 2017 and 2018) and
EUR0.820 million for the 1st batch of Aircraft Technician training (in 2018). ACI will contribute
EUR9.432 million towards the training program and will cover the costs for training of the 3rd, 4th
and 5th batch of pilots and the 2nd, 3rd, 4th and 5th batch of aviation technicians commencing 2019 to
2026. The TA intervention will boost ACI’s capacity and cost efficiency, and by extension address
the glaring technical capacity gap in the region’s aviation market/industry. To achieve a better gender
balance in the Aviation work force, the TA will strive to achieve a 35:65 female to male balance by
2025 from the 10:90 female to male ratio in the program presently.
ii) Study To Improve Aviation Policy Environment – Support for reform in Tax, Fees & Charges
(TFCs) – EUR0.324 million (equivalent to UA0.270 million): This component would provide
technical assistance support towards improving aviation business environment via a study aimed to
reform aviation market Tax, Fees, and Charges (TFCs).
iii) Development of Aviation Training Program and Business Plan for INP-HB – EUR0.341 million
(equivalent to UA0.284 million): This component would finance a business plan to establish a
regional aviation training center of excellence at INP-HB, Yamoussoukro under PPP, and INP-HB
will be the executing agency. The center is expected to serve the region’s aviation market/industry
7 The acquisition of five aircrafts including: two A320CEO, three A320NEO (with the option to convert the last two A320NEO aircrafts
to A319NEO as per the purchase agreement signed with AirBus and based on traffic demand and competition).
5
by offering aviation training program in both English and French, thereby attracting candidates
across the region. Both the theory and practical components of the training will be in-country saving
valuable forex.
C. ADF Partial Risk Guarantee (PRG): This component will provide a vital ADF PRG8 with
guarantee coverage of EUR17.055 (US$20.000 million equivalent of which only EUR4.264
million or US$5.000 million or UA3.552 million of the country’s PBA will be set aside) to
backstop ACI’s annual lease payment commitments to the Special Purpose Vehicle that has been
created to ring-fence the aircrafts (see transaction structure – Figure 1). The PRG is covering the risk
of breach of contract (failure by the state-owned entity ACI to make payment under the lease
agreement). It will use a letter of credit (L/C) structure via a commercial bank (L/C Bank) to be
selected by the Bank and ACI. The PRG will backstop the failure by the L/C Applicant (ACI) to
reimburse the L/C Bank amounts drawn by the L/C Beneficiary (the SPV) under the L/C, following
the occurrence of a breach of contract. The PRG will cover both principal and interest payments
under the L/C. It would help crowd-in cost-effective financing of up to EUR95.088 million from
Commercial Lenders to the Project at competitive tenor and terms – about 6 times multiplier factor
of the guarantee coverage to the PRG. The ADF PRG will have a cross-guarantee with GoC, whereby
the Government undertakes to repay to the Fund any amount paid under the guarantee.
D. Audit – EUR0.102 million (equivalent to UA0.085 million): This component covers the project’s
financial audit over 3 years and procurement audit (in 2019).
2.2 Technical Solution Retained and Alternative Solutions Considered
Technical Consideration
2.2.1 In deciding for a retained solution, ACI made both technical and financing considerations. On the
technical side, ACI considered 4 Aircraft types suitable for short and medium haul flights from 4
manufacturers in line with its fleet structure, network plan, specifications, and market. See section 3.3.8
to 3.3.13 for details of the technical consideration during the procurement process.
Financing Consideration
2.2.2 Following the above technical consideration, ACI made the following financing considerations:
2.2.3 Doing Nothing – ACI currently operates at a very high operating cost structure, which is
unsustainable – the airline’s current fleet include 10 aircrafts - 5 of which are leased. Apart from its
current expensive leases most of which are nearing the end of their respective terms and also aging
aircrafts, it seems implausible for the Airline to maintain or renew these leases to drive its 10 year
business plan (2016–2026). Replacing these leases with expensive lease contracts is also not cost
effective, particularly for a startup Airline as ACI. There is no aviation leasing platform in the continent
for African Airlines. In developed markets, lease rates for African Airlines are more expensive (1.25 -
2% of the aircraft’s market value) plus security deposit (2–3 months payments) compared to Airlines
from other regions (<1% of the aircraft’s market value) and with little or no security deposit.
2.2.4 Aircraft Acquisition - Corporate Finance Option – ACI has been operating for about 5 years and
has a lean balance sheet (as expected from a start-up airline) to support corporate acquisition of its fleet
requirements. The Airline is only expected to achieve profitability from 2018. ACI therefore has limited
access to on-balance sheet finance, which if possible is prohibitive. As a result, the Airline could only
consider 2 Aircraft acquisitions, which was inadequate to execute its business plan. In addition
commercial lenders had requested for a full sovereign guarantee, which GoC was not in the position to
grant, and even where plausible, would only have marginal impact on the terms, given that the sovereign
rating of Cote D’Ivoire is Ba3 (Moody), and B+ (Fitch).
8 The ADF PRG is a leveraged instrument which will use only 25% of the nominal value of the guarantee of the country’s performance-
based allocation (PBA) - a leverage effect of the guarantee coverage to the Fund’s resources of 4:1.
6
2.2.5 Aircraft Acquisition - Blended Finance Option9 – In the quest for a cost effective option to
finance its 10 Year business plan, ACI engaged with the Bank who then supported the Airline in
structuring a novel transaction solution, which would allow ACI acquire 5 Aircrafts via a lease buyback
bankruptcy remote SPV structure. The SPV helps to ring fence the assets away from ACI, thereby giving
lenders some comfort and rights over the assets (if things go wrong), especially as aircrafts are movable
assets with a well-developed liquid secondary market. This structure is suited for a start-up airline such
as ACI with limited balance sheet, but can also be valuable for even matured airlines.
2.2.6 The Government and ACI analyzed and reviewed the above options and decided on Airbus and
the Aircraft Acquisition - Blended Finance Option.
2.3 Project Type
Transaction Structure
2.3.1 The transaction structure is presented in figure 1 below. The proposed project is a PPP lease
buyback transaction structure with a bankruptcy remote Special Purpose Vehicle (SPV) was created on
21st September 2017 under the name BAGOE domiciled in Mauritius10 managed by an
Administrator/Purposed Trust. The SPV is a non-operational entity, created with the main purpose to
ring fence and own (take legal title) the aircrafts via the assignment of the Aircraft Purchase Agreement.
The SPV will act as the “Aircraft Lessor” and will enter into an Aircraft Lease Agreement with ACI
which will act as the “Aircraft Lessee”, where ACI will make quarterly lease payments to the SPV, and
the SPV will in turn service its debt to lenders.
Figure 1: Proposed Transaction Structure (Aircraft Acquisition)
2.3.2 On lending structure: The Bank will sign a Loan Agreement with the Republic of Côte d’Ivoire
with respect to the ADB Sovereign loan (EUR51.164 million). This support will be applied at the SPV
level as Public Tranche. It is therefore proposed that the loan to Côte d’Ivoire be on-lent to the SPV.
The financial terms applicable to the on-lent resources will be the one applicable to the ADB Sovereign
financing to Côte d’Ivoire while the repayment period will be determined according to the specific
conditions relating to the duration of the SPV. The SPV will reimburse the Borrower through the lease
payments and the on lending agreement to be concluded with the SPV will contain appropriate reporting,
audit and other fiduciary provisions.
2.3.3 Justification for on lending at ADB public sector financial conditions – The Bank’s On-
lending Policy (the “On-Lending Policy”) requires “that project loans granted to member countries from
ADB ordinary resources should be on-lent to enterprises on no more favorable conditions than those
9 Source OECD - Blended finance is the strategic use of public or private funds, including concessional tools, to mobilise additional
capital flows (public and/or private) to emerging and frontier markets 10 Mauritius is a well-known tax efficient environment for incorporating SPVs. Most, if not all of the project finance SPVs
(financed by the Bank) are created in Mauritius. The setup cost of the SPV is borne by ACI.
7
that would have been offered by the enterprise by the Bank if the enterprise were the direct borrower.
The duration and grace period should be determined by the capacity of the project and the enterprise to
manage the repayment scheme.” Section 30 of the On-Lending Policy on clause 30 also provides
guidance to justify circumstances where On-lending from Government to an enterprise could be
considered below market rate, particularly with regard to the financial state of the enterprise. The
support of Côte d’Ivoire towards the transaction structure (SPV – which is a shell to ring fence the
aircraft off the balance sheet of ACI) is justified as it is geared towards supporting the financial state of
ACI. Also ACI as a carrier focused on WCA region fulfils a regional public good. As a startup Airline
with a lean balance sheet, ACI has limited capacity to pursue such acquisition and execute its business
plan. This is evident from the Airline’s inability to attract long term cost effective financing. The
proposed on-lending terms (which matches the capacity of the firm to manage repayment) will for the
Airline achieve a blend effect with about EUR95 million commercial financing crowded in. This would
support the financial and economic performance of the project – an objective that aligns with the views
of development partners to leverage blended finance as a way to align the financial returns of projects
with their socio-economic returns (in this case of regional significance). The support from the
Government is also financially sustainable as the government is not passing on a subsidy to the Airline
but directly passing over its cost for facilitating the ADB Sovereign loan to ACI through the SPV.
2.3.4 The SPV will enter into a Loan Agreement with Lenders - ADB Non-Sovereign (EUR42.637
million or US$50.000 million) as Private Tranche, and Commercial lenders as Commercial Tranche
(EUR95.088 million or US$111.500 million), given their respective terms of financing, and with GoC
(via a special escrow account structure to be created). The escrow account interfaces between GoC and
the SPV - as per its jurisdiction GoC cannot interface directly with the SPV. ADB Non-Sovereign and
commercial lenders would be senior lenders to the SPV.
2.3.5 The SPV will lease the Aircrafts to ACI (under similar terms and conditions extended by lenders
to the SPV) as borrower under the financing agreement. The SPV would then enter into a Lease
agreement with ACI under which the Airline makes quarterly lease payments to the SPV. On final
payment under the Lease agreement, the title to the Aircraft(s) would be transferred back to ACI. On
receiving the quarterly lease payments from ACI, the SPV will service the debt to lenders/other
financing parties in a waterfall arrangement – which repays the senior lenders first and then GoC.
2.3.6 As part of the PRG guarantee structure, a Letter of Credit (L/C) Bank will be competitively
selected to backstop the lease payment obligations of ACI. ACI will enter into a Reimbursement and
Credit Agreement with the L/C Bank in which it will undertake to repay the L/C Bank for the amounts
drawn under the L/C by the SPV plus accrued interests within a specified period from the date of each
drawing. In an event of ACI’s lease payment default, the SPV will therefore be able to draw from the
L/C bank to fulfill the loan repayment obligation. The ADF Guarantee is only called by the L/C Bank
when ACI fails to repay the L/C Bank. ADF PRG actually guarantees the L/C Bank against ACI default.
2.3.7 The Bank will enter into a guarantee agreement with the L/C bank. As is required pursuant to the
Strategic Framework and Operational Guidelines for the African Development Fund Partial Risk
Guarantee Instrument, the Republic of Côte D’Ivoire will enter into an counter indemnity agreement
with the ADF pursuant to which Côte D’Ivoire undertakes to repay the Fund on demand for any and all
payments made by the Fund to the L/C bank.
2.4 Project Cost Estimate and Financing Mechanisms
Project Costs by Component
2.4.1 The total Project cost, net of taxes and customs duties, including financial contingencies, is
EUR252.973million or UA210.734 million or CFA165,938.682 million at the August 2017 exchange
rate of UA1 = CFAF 787.430 or EUR 1.20043.
8
Table 1: Estimated Project costs per component
Table 2: Source of Financing
Table 3: Project activities financed by ADB Sovereign Loan and ADF PBA
Financing Arrangements
2.4.2 The financing structure of the project is done under a debt to equity ratio of 85:15. GoC/ACI have
contributed / pre-financed EUR36.377 million (US$42.660 million) as counterpart funding (more than
its 15% equity contribution for the whole project) to cover Pre-delivery payments (PDP) to date for all
the five aircrafts as well as Buyer Furnished Equipment (BFE) payment and part delivery payment for
the first aircraft delivered in July 2017. This pre-payment “counterpart funding” demonstrates the strong
commitment of GoC/ACI, and by extension its Abidjan Hub development.
2.4.3 On the debt side, the Bank is considering the following comprehensive financing package
alongside side other financiers:
FE LC Total Cost FE LC Total
Cost
FE LC Total Cost
A. Aircraft Acquisition (5 No) 222.222 - 222.222 185.118 - 185.118 145,767.684 - 145,767.684 100% 87%
ADB Sovereign (Loan) 51.164 - 51.164 42.621 - 42.621 33,561.234 - 33,561.234 23% 20%
ADB Non-Sovereign (Loan) 42.637 - 42.637 35.518 - 35.518 27,967.695 - 27,967.695 19% 17%
INVESTEC (Loan) 25.582 - 25.582 21.311 - 21.311 16,780.617 - 16,780.617 12% 10%
Commercial Banks (Loan) 69.506 - 69.506 57.901 - 57.901 45,592.984 - 45,592.984 31% 27%
Air Cote d'Ivoire (Equity) 33.333 - 33.333 27.768 - 27.768 21,865.153 - 21,865.153 15% 13%
B. Technical Assistance 0.665 12.928 13.594 0.554 10.770 11.324 436.296 8,480.502 8,916.798 5% 5%
ADF PBA (Loan) 0.665 3.496 4.161 0.554 2.912 3.467 436.296 2,293.351 2,729.647 31% 2%
Air Cote d'Ivoire (Equity) - 9.432 9.432 - 7.857 7.857 - 6,187.151 6,187.151 69% 3%
C. Credit Enhancement 17.055 - 17.055 14.207 - 14.207 11,187.078 - 11,187.078 100% 7%
ADF PBA (Guarantee) 17.055 - 17.055 14.207 - 14.207 11,187.078 - 11,187.078 100% 7%
D. Audit - 0.102 0.102 - 0.085 0.085 - 67.122 67.122 100% 1%
ADF PBA (Loan) - 0.102 0.102 - 0.085 0.085 - 67.122 67.122 100% 1%
TOTAL PROJECT COST 239.942 13.031 252.973 199.879 10.855 210.734 157,391.058 8,547.624 165,938.682 100% 100%
SOURCE % of
Component
% of
Project
EUR (million) UA (million) CFA (million)
9
Aircraft Acquisition
ADB Sovereign Debt Tranche
ADB Sovereign Loan – EUR51.164 million (US$60.000 million) to GoC, applied at the SPV level
for the benefit of ACI. The Bank’s ADB Sovereign financing would cover the delivery payment of
the second Aircraft (US$32.336 million or EUR27.574 million) and ongoing PDP and BFE payments
(up to US$27.664 million or EUR23.590 million) sufficient to cover PDP payments till the financial
close of the Private financing (estimated by July 2018). Côte D’Ivoire’s access to the ADB window
aligned with due credit assessment - reviewed in April 2017 by RDVP and Credit Risk Committee
(CRC), which supported this Project’s presentation to the Board in September 2017.
ADB Non-Sovereign Debt Tranche
ADB Non-Sovereign Loan – EUR42.640 million (US$50.000 million) ADB Non-Sovereign Loan
to the SPV to cover the cost of the 3 remaining Aircrafts whose delivery are due in 2020/2021. This
part of financing will be presented to the Board alongside the Public Debt, on the same day, but as a
separate PAR.
Commercial Debt Tranche
Commercial Banks – EUR95.089 million (US$111.510 million) would come from commercial
banks – Standard Chartered, Investec (already financed), and Societe Generale have already
indicated interest. ACI will issue a competitive RFP to crowd in the commercial lenders. Payments
from this tranche will cover the cost of the 3 remaining Aircrafts that are due in 2020 and 2021.
Investec Financing (EUR25.582 million or US$30.000 million) – Given the delivery date of the
first Aircraft in July, 2017, ahead of the Bank’s proposed Board approval (September, 2017), ACI
solicited alternative financing from Investec. Investec financed the delivery payment of the first
Aircraft to the tune of EUR25.582 million or US$30.000 million. The Bank engaged with Investec
and confirmed that Investec’s financing would be considered as part of the commercial tranche of
the project. As at when the Bank considers a Board approval for the project, the terms of Investec
financing would be re-negotiated between ACI and Investec, and brought under the above transaction
structure – thus Investec would benefit from the ADF PRG.
Equity
2.4.4 Due to delays in ascertaining Côte D’Ivoire access to ADB window, the Bank could not meet up
with the debt financing for the first aircraft delivery. As a result, ACI financed the PDP and BFE with
additional equity participation of EUR17.055 million (USD20 million) alongside Investec’s financing
of EUR25.582 million (US$30.000 million). In line with the above, the following scheme has been
agreed:
The Bank Sovereign loan will refund part of the equity surplus (approximately EUR9.100 milion)
(above the 15% equity limit agreed with ACI) advanced by the company for the payment of PDP for
acquisition of the aircrafts (with the exception of the 1st aircraft which has already been delivered).
Following the Bank’s refund, ACI will have a balance of EUR6.06 million to complete its 15% equity
contributions for the five aircrafts. This balance will go towards PDP and BFE (from December 2018
to July 2021) for the three remaining aircrafts due for delivery in 2020 & 2021.
2.5 Project Area and Beneficiaries
2.5.1 While ACI is based in Abidjan, the project area will cover (6) major regional economic centres in
the country and benefit their district populations through trade and tourism facilitated by air connectivity
services from ACI. These include: i) Abidjan District (Abidjan, 4.7 million), ii) Denguélé District
(Odienne, 289,779), iii) Savanes District (Korhogo, 1.6 million), iv) Montagnes District (Man, 2.4
million), v) Vallée du Bandama (Bouaké, 1.4 million) and vi) Bas-Sassandra (San Pédro, 2.3 million).
Over the life of ACI’s business plan, it is expected that the project area would expand to 7 regional
economic centres. The project will support the tourism industry across the country.
10
2.5.2 In addition, the project area will also cover 2311 locations in West and Central Africa region via
regional air connectivity network of the Airline. This would help boost both national/regional
integration and promote trade within and beyond the WCA region. It is to be noted that 1.039 million
passenger traffic would be facilitated via ACI network by 2030 with increased cargo volumes by 35%
between now and 2030.
2.6 Participatory Approach to Project Identification, Design and Implementation
2.6.1 Consultations were carried out at the highest levels across several stakeholder groups:
Government – the Presidency, Ministries of Finance, and Plan, as well as Senior Managements of ACI
and INP-HB. The Bank supported the Airline and GoC in structuring the transaction (an innovative
lease buyback bankruptcy remote SPV transaction structure) which accommodated the 5 Aircrafts
required by ACI’s business plan. This was followed by extensive consultations between the Government
and ACI on the optimal option which delivered value for money - Aircraft Acquisition - Blended
Finance Option. The Bank also engaged with INP-HB on establishing a regional center of excellence
on aviation training in the WCA region to train Pilots and Aeronautic Technicians, an outcome which
will see the project develop a business plan for the center – under PPP, while supporting the training of
the Pilots (77) and Technicians (120) required by ACI’s business plan. Periodic monitoring/evaluation
will be carried out by INP-HB for the trainees and certification, while ACI and ANAC (Autorité
Nationale de l’Aviation Civile) will oversee the performance of the airline’s operations. The Bank will
periodically monitor the project with scheduled follow-ups, reviews, and supervision missions.
2.7 Bank Group Experience and Lessons Reflected in Project Design
2.7.1 The Bank’s engagement in the transport sector in Cote D’ Ivoire, dates back from 1967. To date
the Bank has financed 22 operations (mainly in the road sub sector) to a tune of UA 525.72 million, of
which 20 operations are completed, including Henri Konan Bédié (HKB) Abidjan, toll bridge project.
2.7.2 There are 5 ongoing operations (progressing well) to enhance regional integration between Cote
d’ Ivoire and its neighboring countries namely - (i) study on San Pedro port extension, (ii) road
development and transport facilitation program within the Manu River Union - consisting Côte
D’Ivoire, Guinea and Liberia, (iii) road development and transport facilitation program along the San
Pedro – Boundiali - Zantiébougou -Bamakowere corridor, and (iv) study on Lagos - Abidjan Super
Highway project. (v) Abidjan Urban Transport Project with the aim to link Abidjan city to the
international corridors. The completed projects have contributed sizably to economic growth via
improved mobility, access to socioeconomic opportunities and rural areas to urban center linkages.
2.7.3 The Bank has historically supported the Aviation sub-sector in the WCA region. In 2005, the Bank
financed (UA4.6 million ADF Grant) the COSCAP project to improve civil aviation safety and
consolidate the Yamoussoukro Decision, to integrate WCA into the global air transport market. The
Project Completion Report (PCR) for the project was concluded in 2014. Also in 2015, the Bank
approved UA11 million ADF Grant, to finance the PASTA-CO project, to help ECOWAS and CEMAC
establish a Regional Safety Oversight Organization and Regional Accident and Incident Investigation
Organization in WCA.
Lessons learnt 2.7.4 Lessons learned from the Bank’s operations in the country, and from other development partners,
suggest the crux need to ensure high project quality at entry, and to promote PPP to enhance
implementation capacity and ensure sustainability. There is the need to minimize delays following
approval, late availability of counterpart funds, and slow project management arrangements. The
proposed project takes the above lessons into account. The project is structured as PPP via its lease-buy
structure, which promotes sustainability. A dedicated team has been put in place at ACI and INP-HB to
oversee the implementation of the project. Counterpart funding from GoC/ACI has already been
committed into the pre delivery payments for the first two aircrafts, thereby eliminating any delays. The
project enjoys close oversight from ACI’s senior management to ensure successful execution.
1122 locations plus the hub - Abidjan
11
2.7.5 Whilst the proposed project would be the Bank’s first direct aviation project in the country, the
Bank has financed similar aircraft acquisition transaction with Ethiopia Airlines, where strong
operational capacity was identified as a success factor. ACI benefits from its strategic partnership with
Air France which has impacted positively on its operations. Within 5 years of operation ACI has risen
to be the 3rd market leader in the WCA region. Though an SOE, ACI operates in an autonomous fashion
with regard to its operations and decisions. The Project also captures lessons from the COSCAP project
on promoting air safety, while the proposed Technical Assistance Package would beef-up ACI’s
operational capacity, boost air safety, and improve enabling environment.
2.8 Key Performance Indicators
2.8.1 The Project will support air connectivity and economic activities in 7 (2026) regional economic
centers within the country from 3 (2016). From a regional integration perspective, the Airline would
improve regional air connections from 19 (2016) to 23 (2026), facilitating passenger traffic from
719,972 (2016) to 1,039,329 (2026) and projected to reach about 1.2 million+ (2030). Aviation
contribution to GDP would grow from 2.7% of GDP (2016) to 4% (2030). The project will also create
jobs (direct ~529 (2016) to ~ 684 (2020) – operations (cabin, air and, ground crew) and aviation related
services, and indirect jobs ~1600 (2016) to ~ 3000 (2020) in tourism and other private sector jobs
induced by the Abidjan hub development. Aviation is a sector with high propensity for gender inclusion,
as such the project would promote jobs for women. The project will also address the human capital
deficit in the aviation sector by supporting the training of additional 77 pilots and 120 aviation
technicians (of which 35% are targeted to be women) required by ACI to delivery its business plan by
2026. The Project will support the establishment of a regional aviation training center at INP-HB,
Yamoussoukro under PPP, to offer regional technical training for pilots and aviation. A business plan
to establish the center will be delivered under this Project. The identified key performance indicators
and expected outcomes at project completion are presented in the results-based logical framework. The
baseline situation for these indicators as defined in the logical framework will be verified and an
assessment will be conducted at mid-term and at project completion by a consultancy firm.
2.8.2 Apart from these outcome and achievement indicators in the logical framework, project
implementation performance indicators will also be monitored. They were selected based on the Bank's
institutional performance indicators defined in Presidential Directive No. 02/2015 on the design,
implementation and cancellation of sovereign Bank Group operations. These are essentially: (i)
deadlines for implementation and fulfilment of conditions precedent to first disbursement; (ii)
procurement deadlines; (iii) average project progress status indicator (PI); and (iv) changes in the
disbursement rate in accordance with the expenditure schedule. These indicators will be monitored
during supervision missions and in the daily management of the project.
3. PROJECT FEASIBILITY
3.1 Financial & Economic Performance
3.1.1 Operational Performance - The financial position and viability of ACI continues to improve. The
Airline’s revenue has grown steadily from its inception in 2012. ACI’s revenue grew by 83% from 27.8
billion CFA (US$48.8 million) in 2013 to 50.9 billion CFA (US$89.4 million) in 2014. The Airline also
had 16.5% year on year growth reaching 86.5 billion CFA (US$151.9 million) in 2016, and is expected
to grow further by 17% in 2017.
0
50 000
100 000
150 000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Figure 3: Air Côte D’IvoireRevenue Profile
Total Revenue (mil in XOF) Transport Revenue (mil in XOF) Other Revenue(mil in XOF)
12
3.1.2 A closer look at EBITDA margins reinforce the same progressive trend from -66.8% in 2013 to -
0.84% in 2016, showing strong operational fundamentals. EBITDA margins are expected to trend to
positive figures from 2017 (3.47%), and projected to grow to double digits 13.8% in 2020 and 20.2%
in 2022. The Global aviation industry (characteristic of its low margins) EBITDA margins was 8.3% in
2015, up from 4.7% in 2014. ACI is a start-up Airline, and as typical, it is not unusual to have negative
EBITDA margins at the early stage of its development, given continuing investments being made to
pursue growth. To further buttress the strength of ACI’s core operations, about 93% of the Airline’s
revenue come from Transport revenue (passenger tickets). Whilst reassuring, the foregoing also
demonstrates the potential for ACI to grow “other revenue” such as cargo/freight revenue, a business
line ACI plans to further develop with positive impact on boosting intra Africa trade in the region.
3.1.3 ACI has increased passenger numbers over the years from 398,761 in 2014 to a projected 834,833
in 2020, with an average load factor of 64% - which measures its capacity utilization. However, ACI’s
load factor is below industry average in Africa (68.2%) and when compared with its main competitor
ASKY (at 70.8% in 2015). The Airline would need to improve its load factor to continually boost
revenue. With higher load factor, profitability increases, as the fixed costs are spread across more
passengers. It is expected that as the economies in the region recover from the recent economic
headwind, and with improved services, route and frequency optimization, and the launch of strategic
partnerships and code share arrangements with Air Burkina, Air France, and Kenya Airways, ACI
would be able to improve its load factor.
Table 4: Air Côte D’Ivoire Operational Data
2014 2015 2016 2017 2018 2019 2020
Load Factor (%) 67% 65% 64% 62% 63% 65% 65%
Passenger Traffic 398,761 567,671 657,908 754,998 792,496 804,686 834,833
Passenger growth (%) 42% 16% 15% 5% 2% 4%
3.1.4 Debt Capacity of ACI - ACI has financed its growth via a mixture of debt and equity. GoC has
over the years demonstrated its commitment to the Airline. However, this is to support ACI’s start-up
phase, as GoC plans to divest from the Airline once it becomes fully profitable. Debt Service Coverage
Ratios (DSCRs) appear relatively okay following the project with Minimum DSCR (1.66x) and Average
DSCR (3.84x) at base case scenario. However, ACI would need to manage short term liquidity
challenges, particularly as it relates to the repayment of its existing debt with Afrexim Bank and EDC
which in 2016 was XOF 41 billion (US$72.8 million), that would impact negatively on coverage ratios.
To address this issue the Board this year, approved a new general capital increase for the Airline (which
is being implemented) to a tune of 67 billion CFA (USD 118 million) over a 3 year period of which the
GoC has already advanced billion CFA (US$35.5 million) out of its share of 38.6 billion (US$68.6
million) as follows (see below Table 5) with the following payment timelines: 50% to be paid in 2017,
30% in 2018, and 20% in 2019. The new equity injection will support the free cash flows of the Airline
and as well enable ACI comply with OHADA minimum equity regulatory requirements12. It is expected
that part of the new equity injection would be used to pay down the existing debt – this would be made
an undertaking on the loan agreement on the Public window and a loan condition on the Private window.
12 OHADA rules - equity after losses should not to be lower than 50% of the nominal share capital.
-100,00%
0,00%
100,00%
EBITDA Margin
Figure 4: Air Côte D’Ivoire EBITDA Margins
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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Table 5: Schedule for New Capital increase
3.1.5 Sensitivity Analysis – The Sensitivity analysis on the project was performed on average ratios
and presented below. It demonstrates the project’s capacity to withstand several down side scenarios.
However it is to be noted that this only dependent on ACI’s ability to execute its business plan.
Table 6: Sensitivity Analysis
Min. DSCR Avg. DSCR Min. ICR
Base case 1.66x 3.84x 4.40x
Changes in passengers volume (5% down) 1.30x 2.90x 3.34x
Changes in price (5% down) 1.27x 2.81x 3.25x
Changes in frequencies and block hours (10% down) 1.29x 2.94x 3.32x
Changes in flight related cost (10% up) 1.55x 3.51x 4.08x
Changes in fuel price (10% up) 1.54x 3.48x 4.04x
Combined: prices (5% down) & flight related cost (5% up) 0.87x 2.21x 3.29x
3.1.6 Economic Analysis – ACI is bound to have considerable economic benefits in line with boosting
regional economic integration and trade, externalities towards private sector development, particularly
SMEs in the tourism and aviation related sector, and improving the competitiveness of the Abidjan hub
development. This would lead to job creation, economic diversification, and growth. The economic
analysis below looked at various stakeholders group - Government of Côte D’Ivoire, Service providers.
Passengers, Society, Passengers, investors. It is expected that GoC would gain increased tax income
from growth in private sector activities stimulated by ACI. Passenger would enjoy better connectivity
and choice, and the industry would benefit from improved technical capacity in terms training for pilots
and technicians. The Project would deliver an estimated Economic NPV of US$32 million (at 12%
discount rate real).
Table 7: Economic Analysis
3.2 Environmental and Social Impact
Environment
3.2.1 This Project is classified as a category 4b (Medium to Low risk) in line with the Bank’s Integrated
Safeguards System (ISS) and Environmental and Social Assessment Procedures (ESAP). The
Environmental and Social Management System (ESMS) developed by ACI reflects the systems and
[SUM] [PV @EOCK 12%]
Government 50,195 20,473
Corporate Income Tax (CIT) (10,808) (1,890)
Tax on Tickets 37,226 13,964
Labor Incone Tax 681 206
Value-added-Tax 10,202 3,304
Withholding tax (on profits) 9,988 3,949
Import tarifs 2,906 940
Society 1,590 480
Incremental earnings to labor 1,590 480
Cost of Environmental Degredation Avoided - -
Passengers 106,836 44,002
Nationals 32,051 13,201
ECOWAS 53,418 22,001
Others 21,367 8,800
Service Provider 63,587 24,249
ACI 63,587 24,249
Net foreign exchange premium to Cote d'Ivoire 4,273 (7,406)
Total Externality from ACI Investment to Economy 226,480 81,798
ACDI Investors 25,592 (49,531)
Net financial returns to ACDI Investors (Lenders & Shareholders) 25,592 (49,531)
Total Net Benefit to Stakeholders [Economy] 252,072 32,268
Financial IRR (Incremental) 2.3%
Financial NPV (49,531) USD '000
Economic IRR (Incremental) 17.6%
Economic NPV 32,227 USD '000
SUMMARY STAKEHOLDERS/DISTRIBUTIVE IMPACT, In Thousand USD
14
mechanisms in place to manage the environmental and social risks associated with the procurement,
operation, and decommissioning of aircrafts. The environmental, health, and safety risks identified are
mainly related to the maintenance and operation centers and include: surface/ground water and soil
pollution through waste disposal, noise, olfactory and vibratory nuisance generated by the aircrafts as
well as the emission of Volatile Organic Compounds (VOCs); impacts on health and safety and energy
use. ACI activities do not involve any resettlement.
3.2.2 During appraisal, the Environmental and Social Management System (ESMS) was assessed and
found to be complaint with the Bank’s ISS. Since commencing operations, ACI has made consistent
effort to comply with environmental and social standards and sustainability issues of its various
stakeholders. The Airline’s first formal safeguard policy was issued in 2014. A recent ESMS was
developed in 2017 with the proactive support of the Bank’s E&S specialist, aligned with the operational
safeguard policies of the Bank and IFC. The new ESMS covers 9 key areas including amongst others -
the E&S policy and commitment of the management, various management programs, increased capacity
and organizational skills, preparation and response to emergency situations, commitment of different
stakeholders, external communication and permanent dialogue with potentially affected communities.
3.2.3 It is to be noted that ACI’s ESMS would be published prior to the board date. ACI would be
expected to take the following next steps – (i) assign an E&S coordinator and forward of his/her resume
to the Bank – a condition to first disbursement (ii) a commitment to constitute and train the committee
in charge of the implementation of the environmental and social regulatory system, and (iii) present a
proposal of an outline of the annual environmental monitoring report, attached to the loan agreement.
3.2.4 The environmental monitoring report will be transmitted to the Bank on an annual basis as per the
ISS requirements and will report on the implementation of the mitigation measures included in the
ESMS. Besides the Bank’s ISS policy and procedures, ACI is required to comply with host country
requirements as well as global industry safety standards.
Climate Change
3.2.5 In term of Greenhouse Gas Emissions (GHG), the aircrafts A320 series are more environmental
friendly and are 15% more fuel efficient. The new aircrafts will reduce the CO2 emissions by more than
900 tons per year and will emit 10% less of nitrogen oxide (NOx) comparing to the previous A 320
version. In terms of additional mitigation measures, the Airport operator (AERIA) is working to
construct a new parallel taxiway to reduce the waiting time of aircrafts and consequently the emission
of GHG. ACI is also supporting the National Forest Conservation and Development program in
partnership with the Forest Development Corporation (SEDEFOR).
Gender
3.2.6 Air Côte D’Ivoire is applying an employment equity strategy, despite the challenges in attracting
women in operations-heavy work streams. As such, women are increasingly encouraged to participate
in the job market and represented in all aspects of its operations including for pilots and technicians. As
part of the intervention, the project comprises a technical assistance component to address the human
capital deficit in the aviation sector by supporting the training of additional 77 pilots and 120 aviation
technicians for ACI (of which 35% are targeted to be women), at INP-HB, Yamoussoukro. The Project
will also facilitate the establishment of a regional aviation training center at INP-HB, which would
support Airlines operating in the region, proffering more opportunities for gender inclusion with
regional impact. The Bank intervention would promote youth empowerment and employability via
increased access to the training program with the evolution towards a bilingual curriculum.
3.2.7 As a first step however to achieving gender equity, the Aircrafts would have gender/women
friendly features including: baby carriers (the existing ones don’t have them and it complicates women
traveling with babies). The project will also put in place measures to facilitate pregnant women and
parents traveling with infants, elderly persons and people living with disability, to pass as business class
passengers, and avoid the queueing.
15
Social Situation and Youth Employment
3.2.8 According to AEO (2017) the “service and industry” sector contributes about 50% of GDP and
22% of employment of the working population. With respect to technical education and vocational
training, the youth without basic education are trained in a job adapted to market needs, however
significant challenges remain. Substantial investment are needed to rehabilitate classrooms, equip
colleges, recruit teachers, implement re-tooling workshops and initiate content review of curriculum.
Given the vast, untapped potential in the interior of Côte D’Ivoire and its neighboring countries,
implementation of this project will unlock new economic centers, build local knowledge, enhance youth
engagement to develop businesses across value chains in tourism and other related sectors. An
anticipated domino effect is increased private sector investment driven by the Abidjan hub development,
which would result in job creation and ultimately support the achievement of the Bank’s Hi5s.
3.3 Implementation Arrangements
Executing Agency
3.3.1 The Implementing Agencies for the project include: (i) ACI for the Aircraft Acquisition program
and operation, and INP-HB for the TA Training program.
3.3.2 Air Côte D’Ivoire (ACI) - ACI is the national carrier of Côte D’Ivoire. The airline commenced
operations in 2012 as a Short Medium Haul (SMH) airline. In a very short time, the airline rose to
become the 3rd regional market leader (offered capacity), behind ASKY and Arik Air. ACI currently
has 63 billion CFA share capital, with a planned capital increase to 130 billion CFA in September 2017.
GoC is a majority shareholder – 57.54%, alongside Goldenrod Investment – 23.41%, Air France
(strategic and technical partner) – 11.11%, and BOAD – 7.94%. ACI has 529 permanent staff with 65%
of the workforce located in the Flight Operations Department. As one of the market leaders in the WCA
region, the airline is well positioned to act as implementation agency for the aircraft acquisition and
operation. ACI operates a hub strategy which interconnects traffic from western to Central Africa.
3.3.3 Operations & Maintenance – The 5 aircrafts will be manufactured and delivered by Airbus with
airworthiness certification. The aircrafts will immediately enter into service and commence flight
operations as part of Air Côte D’Ivoire’s fleet in accordance with existing fleet management plan. ACI
has considerable experience currently operating its 10 aircrafts. The national regulator ANAC (Autorité
Nationale de l’Aviation Civile), under the supervision of ICAO (International Civil Aviation Authority),
has renewed on an annual basis the technical and operational licenses granted to ACI. In order to ensure
full respect of ANAC rules, ACI technical team is composed of two complementary and dedicated teams
namely: i) CAMO (Continuity Airworthiness Management Organization) – focused on design and
control of ACI’s maintenance systems, procedures, and tasks; and ii) AMO (Approved Maintenance
Organization) - in charge of the execution of maintenance and repairs. The CAMO team consists of 9
staffs (mainly senior technicians) and the AMO team is composed of 71 staffs (mainly technicians,
support being provided by senior staff). The operating rules of the two organs are formally described in
internal manuals approved by ANAC. To strengthen its maintenance capacity, the company is also
operating an aircraft hangar (2,250 square meter) at the Abidjan airport.
3.3.4 INP-HB – is the country’s elite engineering and technology institution focused on training high
quality human capital for the country and the sub region, it was established in 1996 and based in
Yamoussoukro, Côte D’Ivoire. INP-HB has a staff strength of about - 398 professional staff, and 318 -
administrative and technical staff, with a current student size of about 3000 coming from 15 countries.
The institution is notable for delivering high quality programs in the sub region. With regard to
Aviation/Aeronautics, in November 2015, ACI partnered with INP-HB, and AIRWAYS College,
France, to begin the training of 15 pilots. In April 2016, ACI partnered with INP-HB and Institut
Aeronautique Amaury de la Grange (IAAG) to train 20 mechanical and aeronautical technicians. INP-
HB commenced an aviation training program in 2015, through strategic partnerships with AIRWAYS
College, France, to train pilots and with IAAG, France to train mechanical and aeronautical technicians.
INP-HB is both a WAEMU and World Bank regional center of excellence. The Bank’s team undertook
a site visit to the institution during the preparation/appraisal mission, the assessment concluded that the
institution has the requisite capacity to execute the TA.
16
3.3.5 Regulatory Environment – The national regulator of the aviation industry is ANAC (Autorité
Nationale de l’Aviation Civile). ANAC has put in place a regulatory framework, which oversees all
aspects of civil aviation, including air safety and operating procedures. ACI undergoes an annual review
and certification for its fleet of aircrafts, pilots, maintenance staff, and processes. Routine inspections
and audits are also performed annually. ACI is a member of ICAO (International Civil Aviation
Organization), which promotes international civil aviation standards, and also part of the Africa Airline
Association (AFRAA), which advocates and facilitates cooperation among African airlines. ICAO
oversees the activities of ANAC.
3.3.6 Market liberalization - the Yamoussoukro Decision (YD, 1999) was a key step towards opening
up the Aviation market in Africa. The Decision (YD) was adopted by all the African States in 1999 and
to date 20 States have shown solemn commitment on its expeditious implementation of which 11
countries (more than half) are located in the WCA region. WCA region has the highest number of states
implementing the Y.D, granted 5th freedom rights to airlines and has actualised the Single African Air
Transport Market (SAATM); therefore ACI (which is a short medium haul airline focused on WCA
region only)and other airlines in WCA region do not face major market access challenges.
Notwithstanding, due implementation and monitoring of the YD would be beneficial to the Aviation
industry in Africa at large. This would result in reduced air fare, improved connectivity and growth in
passenger traffic. On modelling 12 countries, it was estimated that full implementation of YD across
these countries could lead to a GDP increase of +US$1,297 million. The Bank will further support
efforts to liberalise the aviation market in WCA and the continent at large through a multi-pronged
approach: i) under this project the Bank’s financing would support study to provide better understanding
of Tax Fees and Charges (TFC) issues and provide a roadmap towards the normalisation of the TFCs in
Cote D’Ivoire and the WCA region; with a view to extending this to cover the other regions in the
continent; ii) provide finance and technical assistance support to the African Civil Aviation Commission
(AFCAC) - the body entrusted by the AU with the responsibility of Executing Agency (EA) of the YD
to facilitate, coordinate and ensure the successful implementation of the YD; iii) play an advocacy role
through dialogue with the AU and RECs and through specific sector dialogues with Member Countries
to push the YD implementation agenda; iv) help develop the structure and complete the legal framework
in which to apply the YD.
3.3.7 Airport Capacity – Côte D’Ivoire has 3 international airports located in Abidjan, Yamoussoukro,
and Bouaké. The Abidjan Felix Houphouet Boingny international Airport covers 90% of the air traffic
of Côte D’Ivoire and generate 95% of the overall revenue of the sector. It is operated by AERIA, under
a PPP concession which runs out in 2029. The Airport has witnessed growth in passenger traffic by 23%
between 2012 and 2013, reaching 1.3 million passengers in 2014, 1.6 million in 2015, and a further
increase by 11% totalling 1.8 million in 2016. The current Airport passenger capacity is 3 million,
however plans are underway by the operator/authorities to build a new terminal to expand capacity to 8
million passengers/year by 2020, in line with the Abidjan Hub Development goal and the expansion
ACI’s operations. Several investments have already been committed up the tune of 41 billion CFA
starting 2017 to 2020 to construct a parallel taxiway for simultaneous landing and take-off, and 10
additional aprons to accommodate ACI’s A320s. The foregoing investment is backed by Propaco
(CFA10 billion), and BOAD and BCICI (CFA8 billion), the remaining CFA24 billion is covered by
equity from AERIA. Tenders have been launched and contract award and implementation are underway.
Procurement Arrangements
3.3.8 The procurement of goods and the acquisition of consulting services financed by the Bank under
the Project will be carried out in accordance with the Procurement Framework for Bank Group-Funded
Operations dated October 2015 and in line with the provisions of the Financing agreement. More
specifically, procurement will be conducted following the Bank’s Procurement Methods and Procedures
(PMP) using the Bank’s relevant Standard Bidding Documents for the recruitment of consulting services
for which PMP was considered to be more appropriate.
3.3.9 The procurement process followed by ACI to purchase the 5 new aircrafts was found generally
acceptable based on the Bank’s due diligence of the process. The Bank needed to ensure that the
17
procurement process was conducted in line with internationally accepted best practices namely the
principles of transparency, competition, equity and that the outcome of the process achieved value for
money. The due diligence report providing details on the review by the Bank can be found at Annex
B5, Para. B 5.10 of the Technical Annexes. Given the specific type of goods to be purchased, The Board
of ACI via its Strategic Committee evaluated and identified 4 manufacturers given the aircraft type and
its fleet network, and launched a procurement process in 2014. These manufacturers were: Airbus,
Embraer, Bombardier and Boeing. Based on information from ACI, it is to be noted that at the time
(2014) these were the only aircraft manufacturers in the world, meeting the required specifications.
3.3.10 The four manufacturers submitted their bids which were reviewed by the above-mentioned
Strategic Committee. The bids were evaluated including preliminary discussions with the
manufacturers. Bombardier and Airbus were selected for the second phase of the negotiations while
Embraer and Boeing were dismissed for a number of reasons. As regards Boeing, the reasons for
disqualification were: the impossibility to deliver the new generation B-737 MAX aircrafts before 2021;
purchase price was US$5 million higher than price for similar Airbus A319; lack of a maintenance
and/or training center in Côte D’Ivoire, and no offer was provided to help establish same; high PDP
Payments for aircrafts to be delivered in 2021; and no bridging solution to enable ACI to operate
efficiently until 2021 - the deadline for new aircrafts delivery according to the approved ACI business
plan. The reasons for disqualifying Embraer were: new generation aircrafts only available in 2019; the
combination of Embraer 195 (105 seats) and the Embraer 175 (75 seats) were not convenient for high
density routes; no aircraft bigger than 105 seats; the aircrafts are long and narrow, with seating chart in
economy and business only convenient for local flights and uncomfortable for longer flights; the
baggage compartment is narrow and long, making loading and offloading difficult especially in cases
of passenger late or no show ; and impossibility to carry fuel for long flights.
3.3.11 The negotiations with Airbus and Bombardier led to Airbus as the final choice. Bombardier’s
offer had too many constraints notably reservations on manufacturers’ guarantees and the unavailability
of aircrafts in the short term which negatively impacts ACI’s operational risks and transition cost.
3.3.12 Considering that the financing of aircrafts is to be done through the ADB window, the Bank has
ensured that all four Manufacturers satisfy the country of origin requirement under article 17 (1) (d) of
the agreement establishing the African Development Bank (ADB) which stipulates that the proceeds
from any loan, investment or other financing within the context of Bank operations will be used to
procure goods, works and services, provided by bidders from eligible Bank member countries. Bidders
from non-member countries of the Bank are not eligible even if they offer the said goods, works and
services from eligible member countries.
3.3.13 Procurement Risks and Capacity Assessment (PRCA): The assessment of procurement risks
at the Country, Sector, and Project levels and of procurement capacity at the Executing Agency (EA),
were undertaken for the project and the output have informed the decisions on the procurement regimes
(BPS, Bank or Third party) being used for specific transactions or groups of similar transactions under
the project. The appropriate risks mitigation measures have been included in the procurement PRCA
action plan proposed in Annex B5, Para. B 5.8 of the Technical Annexes.
Financial Management
3.3.14 Financial management of the project will be handled by the existing accounts department of Air Côte
D’Ivoire, using the company’s existing financial management procedures, as customised to incorporate bank
specific requirements. ACI has adequate and qualified finance and admin staff, from which a project
accountant would be identified in addition to the Administrator of the SPV. The accountant would report to
the Head of Finance, who will be the point person for financial management matters for the project, and will
use the company’s existing accounting software for maintaining required project accounting records to
ensure completeness, transparency and full traceability of project related transactions. Quarterly interim
unaudited financial reports showing all funds receipts by the project, and their uses, will be required to be
produced and submitted to the Bank within 30 days of the end of the quarter reported on, while annual
financial statements will also be produced and presented for audit at the end of each financial year. ACI
internal audit section will also be requested to incorporate reviews of project related activities in their annual
work program.
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Disbursement
3.3.15 The direct disbursement and reimbursement methods will be used for Bank-financed activities
under this project, in accordance with the Bank’s Disbursement Handbook. Counterpart funds out of
Air Côte D’Ivoire will be mobilized and used in accordance with the company's own procedures.
Audit
3.3.16 In accordance with the Bank's reporting requirements, a financial and accounting audit will be
undertaken at the end of each financial year by an independent/qualified external auditor competitively
selected based on terms of reference approved by the Bank. The purpose of this audit is to validate the
accuracy of the financial statements prepared by the project management, and provide an opinion
regarding the proper use of project resources, in accordance with the Bank approved terms of reference.
The yearly audit report will be submitted to the Bank no later than 6 months after the end of the year
audited. The audit contract would be for a period of 3 years, renewable annually based on satisfactory
performance, after which mandatory auditor rotation would apply. Audit fees will be paid directly by
the Bank after validation of submitted reports. At the same time, the project is subject to audit by the
Court of Auditors, in accordance with Decree No. 2015-475.
3.4 Monitoring and Evaluation
3.4.1 The estimated implementation period is approximately 5 years considering that the procurement
process for the aircrafts is already completed. The project is scheduled to be completed on in 2021 and
closed in December 2022 after submission of the latest monitoring and evaluation reports. Project
monitoring and evaluation will comprise internal and external monitoring, supervision missions from
the Bank, a mid-term review and a final evaluation including completion reports from ACI. Quarterly
project implementation report shall be drafted by ACI and forwarded to the Bank.
Table 8: Project Monitoring and Supervision Schedule
Proposed date Activity Man-weeks
Oct/Nov 2017 Launching & Inspection / Inauguration of 2nd Aircraft 4
July & Dec 2018 Supervision 4
July 2019 Mid-term review of the project 7
July 2020 Supervision 4
Completion Report 6
Total 40
3.5 Governance
3.5.1 In area of governance at the national level, the authorities of Côte D’Ivoire have promoted
transparency and accountability in public finance management by aligning with the WAEMU budgetary
classification and nomenclature standards, as well as preparing an interface between the budget
execution system and the procurement system. However, there is need for improvements regarding the
review of the annual Finance Law and reports by Parliament, spending effectiveness, internal control
effectiveness and the mobilization of domestic resources. In addition, the country’s perceived level of
corruption is still high according to the Transparency International Corruption Perceptions Index
(ranked 108th out of 176 countries in 2016), with a score of 34 on a scale of 100.
3.5.2 At the Sector level, the technical and funding support of the EU is helping the Government to
carry out a sector transport policy and strategy within a program-based approach for transport
infrastructure development. The Ministry of Transport is the line Ministry for Aviation.
3.5.3 Corporate Governance, The Chief Executive Officer (“CEO”) of ACI reports to the Board of
Directors. Ivorian nationals, with broad experience in the airline industry, manage the company and
constitute the top management. The Airline operates with a high degree of autonomy with minimal
political interference in its operations. ACI’s operations are regulated by the Ivorian Law N 97-520
(September, 1997) applicable to all SOEs with GoC participation. The Airline is also subject to
provisions applicable to private and commercial companies.
19
3.5.4 ACI’s Board of Directors is composed of 11 members, of which 6 represent GoC (including the
Chairman). The Board of Directors also include 2 representatives for GoldenRod Investment, 2 from
Air France and 1 from BOAD. There are 3 Board sub-committees including (i) a “Strategic” committee
in charge of designing and implementing strategic orientations of the company (fleet acquisition,
development of new routes etc); (ii) “Nominations and Remuneration” committee approve HR policies,
validate internal and external promotions and review wages’ increase and performance compensations;
and (iii) “Audit and Risk” committee to design and improve internal audit procedures and financial
related items, and risk management.
3.5.5 Given the current governance structure of ACI (particularly the Board) which has a heavy
government representation, the Bank has worked and agreed with both ACI and the Government to
improve this structure to align with global best practice. This would include amongst others the
introduction of two independent Board members with aviation sector expertise and a downward scaling
of Government representation (Public officials) at the Board. Refer to section 4.2 for more details.
3.6 Sustainability
3.6.1 The transaction structure and financing arrangement offers considerable room for ACI to execute
its business plan and boost its sustainability. The approved new general capital increase for the Airline
- 67 billion CFA (USD 118 million) over the next 3 years, which is already being implemented will
support the Airline, particularly to pay down the existing debt and address short term liquidity issues.
ACI expects to post positive EBITDA from this year and become more profitable. While GoC has
provided substantial support to ACI at its start-up phase, it plans to divest from the Airline to private
investors, once it becomes fully profitable.
3.6.2 On the operational side, ACI’s Maintenance Division has built up significant experience in
maintenance processes. Air France continues to provide technical assistance on A320 & A319 aircrafts,
while partnerships and Operation and Maintenance contracts (O&M) are in place with well recognized
industry experts, - SAMCO (for technical assistance on Q400), Safran (for trend monitoring on A320
& A319), Lanema (for weather forecast and wheels’ revisions) and Star Kan Aviation (for aircraft
cleaning). Furthermore, ACI has concluded plans in partnership with Airbus to construct and operate a
new Airbus A320 and A330 maintenance hangar at the Felix Houphouet Boingny Airport.
3.7 Risk Management
3.7.1 Risks related to the achievement of project outcomes are mainly operational and market risks. ACI
would need to maintain operational excellence in executing its strategy and continue to manage a cost
effective operations structure. Whilst market demand projections are favourable for ACI, the Aviation
sector remains exposed to exogenous risk beyond ACI’s control. The management of ACI have
extensive experience in managing SMH carriers and well knowledgeable about the African market. This
will help mitigate the above risks.
3.7.2 Risks Related to Project Implementation: Below is a risk matrix for the project.
Table 9: Project Risk Matrix
Risk Mitigation Rating Financing - likelihood
that the project will not be
bankable/ achieve
financial close
The Bank will leverage its AAA rating to attract cost effective financing at competitive
terms from commercial banks: Standard Chartered Bank, Société Générale, have
indicated interest. Investec Aviation has already financed. The Bank’s blended
financing solution would make ACI’s lease payment cost effective than otherwise
would have been the case without the Bank’s comprehensive intervention.
Low -
Medium.
Environmental – the
risk that the Aircrafts are
relatively not
environmental friendly
The Aircraft acquisition would improve the carbon foot print of ACI. A320 series are
notable for fuel efficiency (15%) and environmental friendliness – reduced CO2
emissions by more than 3,600 tons/year and lower noise. The Bank’s will ensure ACI
complies with expected international environmental and social management standards.
Low -
Medium
Operational – likelihood
that the project will not
improve cost-efficient
The expansion plan/fleet structure will improve ACI cost structure. The Project will
also help beef up ACI’s operational capacity to support its growth strategy. These will
help mitigate the risk.
Medium
Regulation – the risk
that ACI operates un-
checked
ACI undergoes an annual review and certification for its fleet of aircrafts, pilots,
maintenance staff, and processes. Routine inspections and audits are also performed
Low -
Medium
20
annually by ANAC. ACI is a member of ICAO (International Civil Aviation
Organization), which promotes international civil aviation standards.
Market – the risk of
insufficient demand for
the project/ACI
Past/future market projections show progressive passenger and cargo demand traffic
to leverage ACI’s business plan. However, this will depend largely on how ACI
effectively executes its business plan. The management of ACI have extensive
experience in managing SMH carriers and conversant with the African market. They
have been responsible for the rapid growth of the airline. External market factors
beyond the control of ACI may pose a risk.
Medium
3.8 Knowledge Development
3.8.1 The project will provide the Bank an opportunity to deepen its knowledge on aviation finance,
beef-up understanding on the key issues affecting the industry, and maximising the impact of the
aviation sector in stimulating regional integration, trade, job creation, and economic growth. The
monitoring and evaluation of impact from the Project have been specifically designed to build and
disseminate this knowledge to the entities in charge of aviation policies at the national and regional
levels. The key lessons and knowledge gained in designing this novel transaction structure could serve
as a model to be replicated in future aviation finance projects.
4. LEGAL FRAMEWORK
4.1 Legal Instrument
4.1.1 The legal instruments associated with this project include inter alia: i) For the ADB Sovereign
Loan: a loan agreement between the Bank and the Republic of Côte D’Ivoire (the “Borrower”); ii) For
the ADF Loan: a loan agreement between the Fund and the Borrower; and iii) For the ADF Partial Risk
Guarantee: (a) a guarantee agreement between the Bank and the Letter of Credit commercial bank which
will be selected and (b) a counter-indemnity agreement between the Bank and the Borrower.
4.2 Conditions Associated with the Bank’s Intervention
A. Conditions Precedent to Loan Effectiveness
4.2.1 Effectiveness of the loan agreement and the counter-indemnity agreement shall be subject to
fulfilment by the Borrower of the conditions set forth in Section 12.01 of the General Conditions
Applicable to Loan Agreements and Guarantee Agreements of the Bank and the Fund (Sovereign
Entities).
4.2.2 Effectiveness of the guarantee agreement shall be subject to its signature by the Fund and the
commercial bank concerned, as well as signature of the counter-indemnity agreement and additional
conditions that may be negotiated with the commercial bank following its selection
B. Conditions Precedent to First Disbursement of the ADB and the ADF loans
4.2.3 In addition to the conditions for effectiveness mentioned under paragraph 4.2.1 above, first
disbursement of the loans shall be as follows:
ADB Loan:
The first disbursement of the ADB loan shall be subject to fulfilment by the Borrower of the following
conditions to the satisfaction of the Bank:
(i) Evidence of the creation of the SPV in form and substance satisfactory to the Bank;
(ii) Evidence of the execution of an on-lending agreement between Côte d’Ivoire and the SPV, in
form and substance satisfactory to the Bank; and
(iii) Evidence of the establishment of a special escrow account dedicated for the deposit of the lease
payments and transmission to the Bank of the escrow account agreement in form and substance
satisfactory to the Bank;
ADF Loan:
The first disbursement of the ADF loan shall be subject to fulfilment by the Borrower of the following
condition to the satisfaction of the Fund:
(i) Evidence of the establishment of a training plan satisfactory to the Fund.
21
C. Other conditions applicable to the ADB and ADF loans
4.2.4 Furthermore, the Borrower should fulfil the following conditions, to the satisfaction of the
Bank/the Fund:
(i) Cause ACI to assign, by [15th December 2017] an E&S coordinator which qualifications and
experience are satisfactory to the Bank/the Fund.
D. Undertakings:
(i) The Borrower endorse the conclusions and implement the pertinent recommendations resulting
from the study on improving the Aviation Policy Environment; and
(ii) The Borrower shall comply with the timeline agreed upon for the new general capital increase on
To support the listing of ACI as and when the airline achieves financial stability.
(iii) The Government undertakes to cause ACDI to comply with the statutory capitalization requirements
provided for by the applicable company laws (OHADA);
(iv) The Government undertakes to cause ACDI to adopt Compliance Policies, namely Anti-Money
Laundering and Anti-Corruption Policies, in form and substance satisfactory to the Bank [Bank’s Integrity
Department (PIAC) is to provide assistance in that respect];
(v) The Government undertakes to cause ACDI’s corporate documentation to be amended in such a manner
to introduce two (2) independent members in the Board of Directors who will have proven experience in
the aviation sector; and
(vi) The Government shall cause ACDI to take appropriate steps for the purpose of (i) introducing in its bylaws
a provision by virtue of which no single Class C Shareholder will be entitled to hold a stake equal or higher
than a “blocking minority” determined on the basis of the applicable company laws, and (ii) ensuring that,
within three years of the date of signature of the Bank’s Public Sector Loan Agreement, no single Class C
Shareholder, unless otherwise agreed by the Bank, will hold a stake representing more than 20% of the
share capital, it being understood that such a restriction will apply until full repayment of the Bank’s Private
Sector Loan;
4.3 Conformity with Bank Policies
4.3.1 This project complies with all the Bank’s applicable policies.
5. RECOMMENDATION
5.1.1 Management hereby submits this report and recommendation concerning a proposal to award an
ADB sovereign loan of EUR51.164 million, an ADF loan of UA3.552 million (EUR4.264 million
million) and an ADF Partial Risk Guarantee (“PRG”) of EUR17.055 million (UA3.552 million will
be set aside from Côte d’Ivoire’s PBA) to the Republic of Côte d’Ivoire to finance the Air Côte
d’Ivoire Modernization & Expansion Program in accordance with the conditions set forth in this report.
ANNEX I
I
COUNTRY MAP
ANNEX II
II
COMPARATIVE SOCIO-ECONOMIC INDICATORS
YearCôte
D'IvoireAfrica
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2016 322 30,067 97,418 36,907Total Population (millions) 2016 23.3 1,214.4 6,159.6 1,187.1Urban Population (% of Total) 2016 51.4 40.1 48.7 81.1Population Density (per Km²) 2016 73.1 41.3 65.1 33.8GNI per Capita (US $) 2015 1410 2 153 4 509 41 932Labor Force Participation *- Total (%) 2016 67.0 65.7 63.5 60.0Labor Force Participation **- Female (%) 2016 52.5 55.7 48.9 52.1Sex Ratio (per 100 female) 2016 103.4 100.1 106.0 105.0Human Dev elop. Index (Rank among 187 countries) 2015 171 ... ... ...Popul. Liv ing Below $ 1.90 a Day (% of Population) 2008 29.0 ... 21.1 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2016 2.4 2.5 1.3 0.6Population Grow th Rate - Urban (%) 2016 3.6 3.6 2.4 0.8Population < 15 y ears (%) 2016 42.3 40.9 27.9 16.8Population 15-24 y ears (%) 2016 20.3 19.3 16.9 12.1Population >= 65 y ears (%) 2016 3.0 3.5 6.6 17.2Dependency Ratio (%) 2016 83.0 79.9 54.3 52.0Female Population 15-49 y ears (% of total population) 2016 23.5 24.0 25.7 22.8Life Ex pectancy at Birth - Total (y ears) 2016 52.3 61.5 69.9 80.8Life Ex pectancy at Birth - Female (y ears) 2016 53.2 63.0 72.0 83.5Crude Birth Rate (per 1,000) 2016 36.6 34.4 20.7 10.9Crude Death Rate (per 1,000) 2016 13.1 9.1 7.6 8.6Infant Mortality Rate (per 1,000) 2015 66.6 52.2 34.6 4.6Child Mortality Rate (per 1,000) 2015 92.6 75.5 46.4 5.5Total Fertility Rate (per w oman) 2016 4.9 4.5 2.6 1.7Maternal Mortality Rate (per 100,000) 2015 645.0 476.0 237.0 10.0Women Using Contraception (%) 2016 20.7 31.0 62.2 ...
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2005-2015 14.3 41.6 125.7 292.2Nurses and midw iv es (per 100,000 people) 2005-2015 47.9 120.9 220.0 859.4Births attended by Trained Health Personnel (%) 2010-2015 59.4 53.2 69.1 ...Access to Safe Water (% of Population) 2015 81.9 71.6 89.4 99.5Access to Sanitation (% of Population) 2015 22.5 39.4 61.5 99.4Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2015 3.2 3.4 ... ...Incidence of Tuberculosis (per 100,000) 2015 159.0 240.6 166.0 12.0Child Immunization Against Tuberculosis (%) 2015 79.0 81.8 ... ...Child Immunization Against Measles (%) 2015 72.0 75.7 83.9 93.9Underw eight Children (% of children under 5 y ears) 2010-2015 15.7 18.1 15.3 0.9Prev alence of stunding 2010-2014 29.6 33.3 25.0 2.5Prev alence of undernourishment (% of pop.) 2015-2016 13.3 16.2 12.7 ...Public Ex penditure on Health (as % of GDP) 2014 1.7 2.6 3.0 7.7
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2010-2016 93.6 101.2 104.9 102.4 Primary School - Female 2010-2016 88.0 98.4 104.4 102.2 Secondary School - Total 2010-2016 43.9 52.6 71.1 106.3 Secondary School - Female 2010-2016 36.6 50.2 70.5 106.1Primary School Female Teaching Staff (% of Total) 2010-2016 27.8 47.1 59.8 81.0Adult literacy Rate - Total (%) 2010-2015 43.3 66.8 82.3 ...Adult literacy Rate - Male (%) 2010-2015 53.3 74.3 87.1 ...Adult literacy Rate - Female (%) 2010-2015 32.7 59.4 77.6 ...Percentage of GDP Spent on Education 2010-2015 4.7 5.0 4.0 5.0
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2014 9.1 8.7 11.2 10.3Agricultural Land (as % of land area) 2014 64.8 41.7 37.9 36.4Forest (As % of Land Area) 2014 32.7 23.2 31.4 28.8Per Capita CO2 Emissions (metric tons) 2014 0.4 1.1 3.5 11.0
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+)
** Labor force participation rate, female (% of female population ages 15+)
COMPARATIVE SOCIO-ECONOMIC INDICATORS
Côte D'Ivoire
June 2017
0
20
40
60
80
100
120
2000
2005
2009
2010
2011
2012
2013
2014
2015
Infant Mortality Rate( Per 1000 )
Côte D' Ivoi re Africa
0
500
1000
1500
2000
2500
2000
2005
2009
2010
2011
2012
2013
2014
2015
GNI Per Capita US $
Côte D' Ivoi re Africa
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2000
2005
2009
2010
2011
2012
2013
2014
2015
Population Growth Rate (%)
Côte D'Ivo ire Africa
01020304050607080
2000
2005
2009
2010
2011
2012
2013
2014
2015
Life Expectancy at Birth (years)
Côte D' Ivoi re Africa
ANNEX III
III
MAJOR RELATED PROJECTS FINANCED BY THE BANK AND OTHER
DEVELOPMENT PARTNERS OF THE COUNTRY
INFRASTRUCTURE NATURE OF WORKS AMOUNT
(CFAF
Million)
IMPLEMENTATION
PERIOD
FINANCING REMARKS
Extension of the North motorway Construction of an 85.9 km-long
double-lane motorway
166 400 Date of end of
commissioning:
December 2013
BADEA - OFID
IsBD – FSD –
FKDEA -
STATE
Tarring of the Boundiali-Bolona
road- 92.5 km
Tarring of single-lane road 23 930 Date of end of
commissioning:
December 2013
BOAD -STATE
Tarring of the Abobo-Anyama
road – 5.6 km
Tarring of double-lane road 9 400 Date of end of
commissioning : March
2015
BOAD -STATE
Urban road networks – Agboville
– Bingerville - Abobo
Urban road works 30 000 Date of end of
commissioning: March
2015
IDA
Abidjan-Bassam motorway Widening of the Place Akwaba -
Gonzagueville expressway
(double-lane) into three lanes over
a 10.68-km distance; Widening
into three lanes of the 17.45 km-
long Gonzagueville - Grand
Bassam motorway;
Reinforcement of the existing
road (single-lane) over a distance
of 14.04 km ; 05 footbridges
65 000 Date of end of
commissioning:
September 2015
Eximbank-China
STATE
Bolona-Tengréla road – 40 km Tarring works 15 000 Date of end of
commissioning:
June 2016
IDB - STATE Works ongoing
– 30%
executed
Reinforcement of the Aboisso-
Noé road
Reinforcement of 60.9 km of the
existing single-lane Aboisso-Noé
road; Rehabilitation and widening
of the 1.407 km-long and 1.408
km-long double-lane urban roads
in Aboisso and Noé respectively;
widening of Aboisso and Noé
bridges
22 000 Date of end of
commissioning:
June 2016
IDA Works ongoing
– 34%
executed
Tarring of the Bouna-Doropo-
Burkina border road
Tarring of the Bouna-Doropo-
Burkina Faso Border single-lane
road over a 91 km-long distance ;
construction of 3 54m-long
reinforced concrete slab bridges
(4 spans 12-15-15-12) ; Related
infrastructure
33 400 Date of end of
commissioning:
July 2017
BOAD -
BADEA
FSD – FKDEA -
STATE
Works ongoing
– 2% executed
Reinforcement of the Pont
Comoé-Agnibilekro-Abengourou
road
Reinforcement of 87.5 km of the
existing road
- urban section with 2x3.5m and
2x1.5m shoulder and a 3m
parking area in some places
- Abengourou section with 2x6m
and 2x2m interlocking paving
stone shoulder
32 000 Date of
commissioning:
September 2016
European Union Works ongoing
– 46%
executed
Reinforcement of the Adzopé-
Akoupé-Pont comoé road
Reinforcement of 78 km of the
existing single-lane road + 5 km
of urban road in Adzopé + 3 km
of urban road in Akoupé
21 000 Date of end of
commissioning:
October 2016
C2D Works ongoing
– 25%
executed
Reinforcement of the Ferké-
Ouangolo road
Reinforcement of the North road:
Section Ferké-Ouangolo section
covering a distance of 46 km
18 200 Date of end of
commissioning:
September 2016
C2D Works ongoing
– 17%
executed
Tarring of the Agboville-Rubino-
Cechi road
Tarring of the single-lane
Agboville-Rubino-Cechi road: -
6 km of urban road; - 60 km of
interurban road
36 000 Date of end of
commissioning:
September 2017
Eximbank-China
STATE
Works ongoing
–
Commenceme
nt stage
ANNEX III
IV
Tarring of the Odienné-Gbéléban
road
Tarring of 72 km of the Odienné-
Gbéléban road
38 300 Date of end of
commissioning:
September 2017
Eximbank-China
STATE
Works ongoing
–
Commenceme
nt stage
Tarring of the Boundiali-Odienné
road
Development and tarring of
135km of the single-lane
Boundiali-Odienné road,
including the Madinani and
Tiemé access roads
62 000 Commencement date:
January 2016
IDB - STATE Procurement
process
ongoing
Reinforcement of the Grand
Bassam-Aboisso road
Reinforcement of 73 km of the
existing single-lane Grand
Bassam - Aboisso road
30 000 Commencement date:
November 2015
IDA - STATE Procurement
process
ongoing
Tarring of the Danané- Guinea
Border road
Tarring of 47 km of the single-
lane interurban road
19 000 Commencement date:
November 2015
AfDB - STATE Procurement
process
ongoing
Tarring of the Blolequin-
Touleupleu- Libéria Border road
Tarring of 65km of the single-
lane interurban road
27 000 Commencement date:
November 2015
Af DB- STATE Procurement
process
ongoing
Tarring of the Tabou-Prollo road Tarring of 36.5 km of the single-
lane interurban road
15 000 Commencement date:
November 2015
AfDB - STATE Procurement
process
ongoing
Construction of the
Yamoussoukro-Tiebissou
highway
Development and tarring of the
30km-long Yamoussoukro-
Tiebissou highway, a 6.5km-long
expressway, 2 bridges and 2
interchanges (Lolobo and
Tiebissou)
78 000 Commencement date:
March 2016
IDB - STATE Procurement
process
ongoing
Reinforcement of the Bouaké-
Ferké road
Reinforcement of 232 km of the
existing road (single-lane)
59 000 Commencement date:
June 2016
C2D Procurement
process
ongoing
Widening of the Boulevard de
Marseille and tarring of the
Yopougon IZ road network
Widening of 7 km of the double-
lane Boulevard de Marseille and
adjoining roads
Development and tarring of
1.281 km of the single-lane
Yopougon industrial zone road
25 000 Commencement date:
November 2015
FER (BOAD) Procurement
process
ongoing
Interchange on Bld VGE
Construction of a 6m-wide single-
lane one-way 3-level interchange
of about 2 700 m comprising: 16
engineering structures; and 06
reinforced soil access ramps
24 620 Engineering structure
completed in December
2014
BOAD - STATE
HKB bridge or 3rd bridge
1.558 km-long crib bridge – 30
50m-long three-lane spans
129 400 Engineering structure
completed in December
2014
PPP :
BOUYGUES –
STATE
Bank
participation to
the tune of
Jacqueville bridge
Construction of a single-lane 608
m-long bridge with 15 spans (that
is 2 end spans measuring 37.58m
and 13 intermediate spans
measuring 38.10 m)
20 340 Engineering structure
completed in March
2015
BOAD –
BADEA – OFID
- STATE
Béoumi bridge Construction of a 304 m-long
single-lane bridge over river
Bandama; Construction of a 94
m-long single-lane bridge over
river Kan; Rehabilitation of 32
km of the Béoumi-Kounahiri
earth road
16 300 Date of end of
commissioning:
November 2015
AFD - STATE Works ongoing
– 91%
executed
Construction of the Azito bridge
Construction of a 969.1 m-long
single-lane pre-stressed concrete
bridge
26 500 Commencement date:
January 2016
BOAD –BIDC-
STATE
Procurement
process
ongoing
Rehabilitation of the FHB bridge
Rehabilitation of a 372m-long
bridge with a new foundation and
reinforcement of the bridge deck
28 000 Commencement date:
January 2016
C2D - STATE Procurement
process
ongoing
Construction of the 5th bridge in
Abidjan
Construction of a bridge link
between Yopougon and plateau
100 000 Commencement date:
August 2016
PPP
ANNEX IV
V
CÔTE D’IVOIRE: NATIONAL ACTIVE PROJECTS AS OF MAY 2017
ANNEX V
VI
AIR COTE D’IVOIRE: FINANCIALS
Historical Financials 2013 – 2016
Projected Financials 2017 – 2030
Income statement (XOF) 2013 2014 2015 2016
Turnover 33 095 841 466 55 647 126 502 81 557 623 096 93 680 669 289
Gross margin on materials 0 0 73 313 170 936 85 694 498 159
Added value -14 483 476 559 -6 476 944 611 4 371 037 693 7 968 974 947
Gross operating margin -18 207 031 464 -11 860 855 949 -3 556 331 679 -2 135 062 825
Operating result -20 161 338 958 -13 449 465 052 -5 921 124 153 -6 000 666 744
Financial result -444 390 458 -679 674 319 -3 068 450 677 -4 270 459 629
Income from non-ordinary activities 0 341 093 340 836 253 000 1 541 180 790
Net result -20 605 729 416 -13 813 172 563 -8 828 757 919 -8 729 945 583
Balance sheet (XOF)
Net assets 5 854 938 325 33 177 867 700 54 241 587 391 74 101 240 094
Current assets 5 597 296 030 9 618 263 834 16 371 776 573 20 917 321 595
Cash assets 1 140 578 797 4 900 604 204 2 014 027 354 8 857 616 059
Foreign exchange - assets 0 123 945 481 461 466 650 1 141 221 452
Total assets 12 592 813 152 47 820 681 219 73 088 857 968 105 017 399 200
Equity -22 052 431 297 -13 365 603 860 -22 194 361 779 7 075 692 759
Financial debt 369 243 413 26 632 255 413 35 965 862 692 44 059 089 392
Incl. Loans from financial institutions 0 25 896 538 390 34 469 142 174 41 448 578 369
Incl. Financial provisions for risks and charges 369 243 413 735 717 023 1 496 720 518 2 610 511 023
Current liabilties 34 276 001 036 34 389 449 866 55 325 655 963 48 792 712 942
Cash liabilities 0 0 2 600 000 000 4 091 370 612
Foreign exchange - liabilities 0 164 579 800 1 391 701 092 998 533 495
Total Equity and Liabilities 12 592 813 152 47 820 681 219 73 088 857 968 105 017 399 200
Profitabity & Financial metrics 2013 2014 2015 2016
Turnover growth 288% 68% 47% 15%
ROIC (Operating result/Invested capital) (theoretical 2013*) 87% -176% -46% -14%
ROE (Net result / Equity) (Theoretical 2013,14,15)* 93% 103% 40% -123%
Gross debt (XOF) 0 25 896 538 390 37 069 142 174 45 539 948 981
Net debt (XOF) -1 140 578 797 20 995 934 186 35 055 114 820 36 682 332 922
Net Debt / Equity (Theoretical 2013,14,15)* 5% -157% -158% 518%
* The company recorded negative equity in 2013,14,15
CASHFLOW SUMMARY 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Cashflow from Operating Activities
Revenue 181 877 198 344 207 071 220 300 233 081 243 211 252 037 262 767 272 218 283 394 283 394 283 394 283 394 283 394
Flight Related Cost (Variable) (122 078) (130 704) (136 450) (142 039) (144 576) (148 839) (155 731) (163 310) (170 518) (177 926) (179 935) (181 466) (183 503) (185 133)
Operating and Admin Expenses (56 849) (50 909) (51 578) (51 942) (49 826) (50 284) (51 542) (52 836) (54 167) (55 536) (54 622) (54 709) (54 797) (54 886)
Changes in WC (22 502) (957) 218 166 (218) 143 425 472 435 443 91 135 177 143
Taxes - - (1 050) (487) (2 435) (3 658) (4 126) (4 967) (5 536) (6 417) (6 443) (6 143) (5 724) (5 415)
Operating Cashflow (19 552) 15 774 18 211 25 998 36 025 40 574 41 062 42 126 42 433 43 958 42 485 41 211 39 547 38 103
Cashflow from Investing Activities
Aircraft Acquisition (incl. PDP Airbus) (72 823) (15 233) (17 598) (46 240) (56 535) - - - - - - - - -
BFE & Other Investments (13 638) (4 502) (10 723) (15 463) (5 819) (8 908) (8 395) (6 323) (8 119) (6 628) (5 227) (5 285) (5 335) (5 335)
Heavy maintenance (523) (1 244) (1 319) (1 470) (2 174) (808) (978) (4 634) (2 362) (3 595) (3 595) (3 595) (3 595) (3 595)
Total Cash used in Investment Activities (86 984) (20 979) (29 640) (63 173) (64 528) (9 716) (9 374) (10 956) (10 481) (10 223) (8 822) (8 880) (8 930) (8 930)
Cashflow from Financing Activities
Increase in Share Capital 41 717 28 133 30 008 - - - - - - - - - - -
Increase in LT Debt 90 000 - - 135 000 - - - - - - - - - -
Principal repayment (9 973) (11 691) (12 109) (24 540) (23 397) (28 875) (29 374) (34 644) (25 454) (22 143) (10 000) (10 000) (10 000) (10 000)
Interest payments (4 534) (4 978) (4 414) (12 034) (10 641) (9 287) (7 686) (5 855) (4 280) (3 064) (1 910) (1 607) (1 303) (1 000)
Net Cashflow generated from/(used in) Financing Activities 117 210 11 464 13 485 98 426 (34 039) (38 162) (37 060) (40 499) (29 735) (25 206) (11 910) (11 607) (11 303) (11 000)
Net Increase/(Decrease) in Cash 10 675 6 260 2 056 61 252 (62 542) (7 305) (5 371) (9 330) 2 217 8 529 21 753 20 724 19 314 18 173
Opening cash balance 8 209 18 884 25 144 27 200 88 452 25 910 18 605 13 234 3 904 6 121 14 650 36 402 57 127 76 441
Closing cash balance 18 884 25 144 27 200 88 452 25 910 18 605 13 234 3 904 6 121 14 650 36 402 57 127 76 441 94 614
ANNEX VI
VII
ORGANISATIONAL STRUCTURE OF AIR COTE D’IVOIRE