CONFIDENTIAL

Sierra Leone Investor Presentation

February 2016, London

1

Sierra Leone is a strategically placed West African country with a

population of 6.3M and GDP of $4.8B in 2014

Source: World Bank

71,740km2

Land area

6.3M Population

$4.8B 2014 GDP

2

It enjoys strategic access to markets and attractive competitive

advantages

4hrs Sea route to Brazil

2hrs from Lagos

6hrs From Europe

8hrs from the Americas

Sierra Leone enjoys natural proximity to key markets …

▪ Freetown has a natural deep-water harbor, located along major global trade routes

▪ Duty-free & preferred access to key markets:

– Economic Community of West African States (ECOWAS) – ~225 million people

– European Union (EU) via Everything but Arms initiative (EBA) – ~500 million people

– The US via The African Growth and Opportunity Act (AGOA) – ~300 million people

… And competitive advantages to harness the opportunity

Source: SLIEPA

3

The country has emerged from civil war to become a beacon for

religious tolerance and democracy in the region

Source: The Economist

▪ Sierra Leone enjoys remarkable social and religious tolerance

▪ Country has enjoyed two peaceful democratic elections (2007 and 2012) since the end of the civil war underpinning it as one of the more stable countries in the region

Sierra Leone takes religious tolerance seriously. Not only are relations between the two main religious groups in the west African country cordial, but it is not unusual to be both Christian and Muslim….

The Economist – May 31st 2014

“ “

4

GDP annual growth 2009-2014, %

It is now is a fast growing economy with annual GDP growth

forecasted to reach 9% in 2017

Source: World Bank

-15

-10

-5

0

5

10

15

20

25

2017f 2016f 2015e 2010 2011 2013 2012 2014

Ebola and commodity price slumps

▪ Sierra Leone was the fastest growing developing nation in 2013

▪ Expected to bounce back rapidly from Ebola and commodity price shocks

5

Sierra Leone ranks above the African average in the World Bank’s

ease of doing business index…

Source: World Bank

World Bank Ease of Doing Business 2015

47

47

49

50

52

55

65

Cameroon

Nigeria

Liberia

Senegal

Ghana

Sierra Leone

Distance to Frontier (DTF) score1

SSA average

1 DTF – shows the gap in an economy’s performance in the Ease of Doing Business indicators in relation to the best in class

Wea

ker

Sco

re

6

… and is recognized for its attractiveness to FDI

Source: FDI Intelligence

Best FDI Strategy – Rank by country 2013/2014

Top cities for FDI growth – Rankings 2013/2014

Rank

1

2

3

4

5

6

7

8

9

10

Country

Mauritius

Morocco

Botswana

Namibia

Kenya

South Africa

Sierra Leone

Ghana

Gabon

Ethiopia

Rank

1

2

3

4

5

6

7

8

9

10

Country

Nairobi, Kenya

Johannesburg, South Africa

Midrand, South Africa

Casablanca, Morocco

Lagos, Nigeria

Arusha, Tanzania

Freetown, Sierra Leone

Tanger, Morocco

New Cairo City, Egypt

Stellenbosch, South Africa

7

Recent regulatory reforms look set to further improve the country’s

business environment in the near term

▪ Streamlined location clearances and building permits

▪ Bundled Issuing of inspections and permit

▪ Online registration available at www.oarg.gov.sl

▪ Unbundled the utility company (EDSA) from the NPA to improve efficiency

▪ Companies Act amended in 2014 – Inspection rights granted

to minority investors – Court empowered to

protect minority investors

▪ Import clearance and export processes streamlined

▪ Transparent fees and charges

▪ 7 day process with the Land Registry

▪ Fixed prices provide certainty [Stamp duty (0.1%) + 50,000 (~$12) Leones for fast track procedure]

Starting a Business Protecting Minority Investors Registering Property

Construction Permits Getting Electricity Trading Across Border

Source: World Bank Doing Business

8

Underpinning this attractive environment is a transparent

and competitive tax regime

Corporate tax Resident companies Non-resident companies

Basic rate 30 percent 30 percent

Mining companies

30 percent 30 percent

Capital gains 30 percent (subject to a minimum chargeable threshold of Le3.6 million (US$829) per annum or per transaction)

30 percent (subject to a minimum chargeable threshold of Le3.6 million (US$829) per annum or per transaction)

Goods and services tax

15 percent (subject to exemptions for exports for goods (excluding minerals) stores on vessels and aircraft leaving Sierra Leone and various exempt supplies2; and for businesses with an annual turnover of less than Le350 million (US$82,000))

15 percent (subject to exemptions for exports for goods (excluding minerals) stores on vessels and aircraft leaving Sierra Leone and various exempt supplies; and for businesses with an annual turnover of less than Le350 million (US$82,000))

Rental income 10 percent (subject to an allowance of 20 percent for repairs and maintenance and a tax free threshold of Le3.6 million (US$829)

25 percent (final tax for non-resident companies)

Dividends 0 percent (dividends received by a resident company from another resident company are exempt from tax)

10 percent (final tax for non-resident companies)

Interest 15 percent (interest on government development stocks is exempt from tax)

15 percent (final tax for non-resident companies)

Royalties 25 percent 25 percent (final tax for non-resident companies)

Natural resource payments

25 percent 25 percent

Payments to contractors

5 percent 10 percent

Source: Income Tax Act, Sierra Leone: An Investor's Guide

9

Agriculture

Fisheries

Infra- structure

Energy

Mining

Sierra Leone presents investors with opportunities

in 5 key sectors

Sector

A

B

C

D

Description

▪ ~5.4M hectares of fertile agricultural land, 75% uncultivated

▪ 5-year duty free for inputs for agribusiness

▪ Currently an untapped sector with minimal competition

▪ Region is one of the richest fishing grounds in the entire world

▪ Advanced stage plans to develop and integrated fishing harbour

▪ Government currently looking at private sector participation as it rebuild infrastructure

▪ PPP Act eases private sector involvement in infrastructure projects

▪ Government committed to tripling energy capacity by June 2017 from 100MW to 300MW

▪ Key government reforms enacted including separating the distributor and the generating company and National Electricity Act that allows participation of IPPs

▪ Country rich in iron ore, diamonds, bauxite, rutile and gold

▪ Iron ore deposit at Tonkili is 2nd largest in Africa and in bottom 10% of global FOB costs

E

10

Savannah Woodland

Transitional rainforest Savannah Woodland

Rainforest Coastal Plains

2

4

3

1

Emerging opportunities include: ▪ Coastal Plains – Livestock, Aquaculture (Fisheries) ▪ Transitional Rainforest Savannah Woodland – Livestock (Ruminant)

Coastal Plains 2

Savannah Woodland 1 Transitional Rainforest Savannah Woodland

3

Rainforest 4

Rice Rice

Pepper

Cassava

Maize

Rice

Sweet Potato

Beans

Cassava

Cocoa

Coffee

Sierra Leone has the natural agricultural potential to meet local

demand and export to international markets

Source: FAO, African Technology Policy Studies Network, Web Search

Maize

Banana Yams

Rice

Cassava

A

11

GDP contribution 2013, USD millions

▪ Agriculture remains the major contributor to the economy

▪ Mining GDP contribution is estimated to have reduced by >70% in 2014

▪ Coffee and cocoa represent 96% of Sierra Leone’s agricultural exports in 2013

It is currently the largest contributor to GDP and a major source

of exports

Source: FAO Stats, World Bank; Sierra Leone National Accounts Report 2013, Bank of Sierra Leone

4,896

Agriculture

5%

Retail & hosp.

Fishing

Other

8%

9%

13%

21% Mining

39%

Tourism

Total

Manufacturing 2%

Transport & Comm. 4%

A

12

SLIEPA has already identified 11+ opportunities across

7 key value chains

Source: SLIEPA

Commodity Brief Description

Rice ▪ Suitable areas for mechanical cultivation include Torma Bum Rice Fields (51,300 ha in

Bonthe District) and Gbondapi Rice Fields (41,000 ha in Pujehun District)

Oil Palm

▪ Production of Palm and Kernel Oil (PKO) and other ancillary products including soap, bio-fuel, cooking oil, etc

▪ Opportunities for integrated production & refining of ethanol (sugar, Cassava) & biodiesel (oil palm)

Sugar and Ethanol Production

▪ Excellent growing conditions

▪ Opportunity to satisfy local consumption demand (currently 50% local demand met through imports) as well as import to EU & West Africa

Cocoa, Coffee and Cashew Processing

▪ Large areas under cultivation but require rehabilitation, replanting, new planting, value addition

▪ Sierra Leone has enormous potential for improvement and growth - improved quality afforded Sierra Leone a 10% premium on world prices

Carbon Trading ▪ The Gola Forest and other protected areas offer significant potential for carbon

credits, Wild life, Flowers

Poultry products ▪ High potential, strong local demand, and a nascent industry to build on

Cassava ▪ Many opportunities for processing cassava flour, flakes, ethanol, etc,

A

13

The Government is also looking for private partnership

in two additional investments

Source:

Agriculture projects

PPP Oil Palm Plantation Management Project

Generation of seeds for the farming community to farm and feed the nation

MDA sponsor

MAFFS

MAFFS

Current status

Policy concept

Policy concept

A

14

Sierra Leone enjoys abundant fish reserves in close proximity

to key European and West African markets

Source: Sierra Leone: An Investor's Guide

B

Sierra Leone has extensive fishing waters…

…with large quantities of fish and strong local and international markets

▪ Sierra Leone marine ecosystems gives it a comparative advantage in West Africa

– Hosts high fish biomass with healthy potential yields around tuna, shrimp, pelagic and demersal fish

▪ There’s a large domestic market with fish making 80% of the animal protein consumed by Sierra Leoneans

▪ Key challenge for the fisheries sector is illegal fishing. Estimated to cost the country ~$29M annually

15

SLIEPA has identified 10+ bankable opportunities across

8 key value chains

Source: SLIEPA

Aquaculture ▪ Potential to develop aquaculture in Sierra Leone from current production levels - less

than 40 tons per annum - to commercial levels

Oyster farming ▪ Oyster farming in estuaries provides opportunity for mariculture ▪ Sierra Leone also has marine environments suitable for a range of shellfish and finfish

farming activities in the longer term

Fish processing

▪ Involves value added processing, packaging and marketing of fisheries products to national regional and other export markets

▪ Opportunities include, processing rooms, chill rooms, vacuum packaging, blast freezing, cold storage, boxing and containerization

Boat Building ▪ Design and construction of fit for purpose industrial fishing boats and sale to local

small fishing enterprises

Transportation ▪ Transportation of fish products from a wide network of landing centers to processing

and packaging centers for exports

Fishing and sales ▪ Fishing operations using own vessels and sales of production catches to larger buyers

for processing and export

Construction of a fish harbor complex

▪ An opportunity for the construction of a fish harbour in Freetown that serve as transhipment hub

Construction of fish landing sites

▪ Opportunities for the construction and operation of fish landing sites at 5 major locations

A

16

The Government is also looking for private partnership in three

additional investments

Source:

MDA sponsor Current status Fisheries projects

Fisheries Harbour & industrial estate for processing

MFMR Policy concept

Fisheries regional distribution network MoFMR Policy concept

AfDB Fish landing sites at Goderich, Tombo, Shenge and Bonthe

MFMR Project agreement

A

17

Country’s infrastructure has for long been wanting

but government keen to improve this

Source:

▪ Water: Under the Agenda for Prosperity blueprint, government aiming for 74% of Sierra Leoneans have access to potable water by 2017

▪ Port: Government is planning on developing a new Deepwater port and associated rail infrastructure

▪ Airport: Concession awarded to CIRG for development of a new international airport outside Freetown

▪ Investment incentives: Infrastructure projects with development costs exceeding $20M are exempt from income taxes for 15yrs

▪ PPP unit: Government lacks finances for all planned projects so has set up the PPP Unit to facilitate private sector involvement

Country’s infrastructure destroyed during the war

▪ Close to 50% of Sierra Leoneans lack access to safe water supply and sanitation services

▪ Efficiency at Freetown Port low due to poor infrastructure in and around the port.

▪ Transport between Freetown and the International Airport at Lungi limited to boats and ferries – need for more airport access options

▪ Less than 10% of roads are paved – making travelling within the country difficult during the rainy season

Improvements being made countrywide

C

18

The government is looking for private partners in 8 major

infrastructure projects

Source:

Project Type Project Description Status Project Type Project Description Status

▪ Construction & Operation of a Heavy Duty Toll Roads (238 Km)

PPP/BOT Ministry data available

▪ Development of passenger Jetty terminals and Logistic Depot for Oil Exploration including development of a Tank Farm

PPP/BOT Ministry data available

▪ Extension of the Freetown Elizabeth Quay PPP/BOT Ministry data available

▪ Real Estate Development Investment PPP/BOT Ministry data available

▪ Construction & Operation of a Heavy Duty Toll Roads (238 Km)

PPP/BOT Ministry data available

▪ Fishing & Transport Infrastructure Development – investments in harbour infrastructure

PPP Ministry data available

▪ Construction of Lungi – Freetown Bridge PPP/BOT Ministry data available

▪ Improvement of Transfer facilities between the Lungi International Airport and the Main land

PPP/BOT Ministry data available

▪ ICT Infrastructure – to support the landed fibre optic PPP Ministry data available

C

19

Private partnership also required in a number of transport

projects

Source:

MDA sponsor Current status Project description

Freetown Estuary integrated transport study MoTA Pre-feasibility

Deep Sea port & Rail (bulk minerals) MoTA Pre-feasibility

Road maintenance services project MoTA & RMFA Policy concept only

Freetown water network and distribution MoWR Policy concept

Regional clinics MoHS Policy concept

King Jimmy Market & Mall Freetown CC Pre-feasibility

Affordable housing MoWHI Policy concept

Freetown Estuary integrated transport study MoTA Pre-feasibility

Deep Sea port & Rail (bulk minerals) MoTA Pre-feasibility

Road maintenance services project MoTA & RMFA Policy concept only

C

20

The country’s energy needs are underserved and require

substantial investment going forward

-251

300

49

Demand Supply

Demand Supply1

Peak supply/demand, 2012-20, MW Current, 2012

Forecast, 2020

Surplus/ deficit

Surplus/ deficit

-1,031

1,380

349

Generation Transmission Distribution

▪ Installed capacity of 164.8 MW but effectively producing 100 MW during rainy season and 65 MW during dry season

▪ Very limited access - Overall electrification rate of 5%; urban: 11%, rural: 1%

▪ T&D system is old and poorly maintained, losses are as high as 45%

▪ Average retail tariff is about 28.6 USD cents/kWh; high due to high cost of generation, low revenue collection rate and mainly utilizing diesel/oil

▪ Supply is intermittent, with 81.8 % firms mentioning electricity as major constraint to their business.

Source: UDI, World Bank, World Bank Enterprise surveys, Enerdata

1 Incl. all planned capacity, at present availability ~25%-30% 2 Including all planned capacity at improved availability of 50%

D

21

Sample of some of the PPP opportunities in power generation

Source:

PPP Energy Sector

Energy projects MDA sponsor Current status

Hydro Bekonkgor Hydro Power Project (160MW)

MoE Pre-feasibility

Hydro Manage Hydro Power Project (100MW)

MoE Pre-feasibility

Hydro Hydro Power Plant at Rokon site on Seli river (31 MW)

MoE Pre-feasibility

Hydro Moyamba Hydro project (25MW)

MoE Project

Hydro Bumbuna II Hydro 200MW

MoE Project

HFO Freetown 128 MW thermal plant (HFO) for Freetown

MoE Project agreement

Thermal power plant 300-600 MW Thermal plant (Coal and/or gas)

MoE Pre-feasibility

Renewable energy Solar projects on the national grid and off-grid

MoE Pre-feasibility

Solar mini projects Solar Era Pilot project

MoE Project agreement

D

22

For further information, please consult the Herbert Smith

investors guide or request a consultation with SLIEPA

… as well as in person from any SLIEPA representative

Further advice is available from the investor guide, promotional video and website …

D