Dentons and Eversheds Sutherland have further established their own infrastructure credentials in the continent, this time by working on opposite sides to a vital new development in Rwanda, one of East Africa’s growing economies.
The USD 800 million PPP is as a flagship investment for the landlocked country, under a Public Private Partnership structure. Newly merged Eversheds Sutherland (ES), which has been actively developing a network of African legal partners, was instructed by the Rwandan government to provide legal counsel on the deal to state-owned enterprise, Aviation Travel and Logistics (ATL), with infrastructure firm Mott MacDonald as technical advisers.
The deal will see Bugesera International Airport (BIA) replace Rwanda’s existing international airport, Kigali. In doing so, the PPP will provide new passenger and cargo terminals and a 4.2 km runway to handle large commercial airplanes, while later phases will include a second runway and more terminals.
Thereafter, BIA is expected to have capacity for around 1.7 million passengers a year, then rising to 4.5 million per year following completion of subsequent phases; a significant increase on the 800,000 passengers currently handled by Kigali.
ROUTES TO INSTRUCTION
ES was instructed, following a competitive tender, to give advice on the concession agreement, shareholders agreement and separate construction contract for the airport, as supported by the African Legal Support Facility (ASLF). ALSF, based in the Ivory Coast, is an international institution which seeks to reduce the asymmetry in technical skills that exists between African countries and international investors.
Dentons meanwhile acted for the participating joint venture, Bugesera Airport Company (BAC), a partnership featuring long-standing Portuguese client Mota-Engil, and ATL. It advised BAC on the concession agreement between Rwanda and BAC for the development, construction and operation of the airport, and, separately, the bespoke construction contract entered into between BAC and Mota-Engil, for the design, construction, and testing of the airport, as well on regulatory matters.
Local law firms Factum Law and Trust Law Chambers provided national law advice to ES and Dentons respectively. The contracts, agreed between the parties and their law firms, were agreed over three and half months and signed in Kigali on 1 July. The project now moves to the financing phase.
For ES, partner Howard Barrie led negotiations, as supported by principal associate Lynne Wells, on secondment in Kenya over this period, and associate Madhulika Kanaujia. Two other partners, Kuljeet Gill and Dominic Lacey, advised on the shareholders agreement and construction agreement for the firm.
Commenting, Barrie said in a statement that he was privileged to work in the deal: “As Rwanda is a landlocked country a new and modern airport is crucial for the development of its tourist industry and its position as a regional hub. While we faced a challenging timeframe, we worked closely and collaboratively with the government to get this over the line.”
For his part, Dentons projects partner John Woolley said: “This new airport demonstrates [Rwanda’s] commitment to strengthening the country’s infrastructure, and this project will play a vital role in enabling Rwanda to further develop business and tourism to support economic growth.” Wooley worked alongside finance partner Dominic Spacie, senior associate Selena Strudwick and associate Tom Guilfoyle on the deal.
EVIDENCE OF GROWTH
The new airport is seen by the Rwandan government as helping to underpin the country’s economic development; according to The Economist, since 2000, “Rwanda has notched up growth rates of 8% a year, making it one of the fastest-growing economies in the world”. Alongside a recently completed USD 300 million convention centre, the airport will be yet another significant venture for Rwandans.
Rwanda enjoys a good reputation among investors, not least thanks to a highly developed system of dispute resolution for those businesses choosing to invest in the so-called ‘Singapore of Africa’, as detailed by ALB in our recent Special Report on Investment in Africa; that augers well for the investors, and the firms concerned, in offering local outlets to resolve unwanted contractual developments, or deficiencies.
There have been, however, also human rights concerns, as also expressed by The Economist in a recent editorial, about that country’s more authoritarian tendencies, following recovery from civil conflict in the 1990s.
Be that as it may, the Rwandan president, Paul Kagame, is due for re-election in August, and is widely expected to continue on the polices of economic expansion, and technocratic innovation, that have characterised his rule so far. BIA will arguably be just one of Kagame’s more positive, and tangible, legacies.
Source: African Law and Business