CLIENT: LAGOS WATER CORPORATION

Country:  Nigeria

Sector:  Utility/Infrastructure

Service:  Transaction Advisory

Project:  Transaction Advisor and Project Manager


Project Description:  IBS has been engaged by the LWC to provide professional and technical consulting services to assist LWC in its negotiation of the Concession Agreement. As Transaction Advisor/Project Manager, IBS will assist the LWC in final negotiations with the Concessionaire.


This will include, but not limited, to the following:

  • Preparing suitable negotiations teams;
  • Categorizing issues appropriately, developing timelines for completion;
  • Planning negotiation tactics;
  • Reviewing proposed sub-contracts, in particular with the construction contractor and operator, to the extent forms of these contracts have not been included in the PPP contract or the tender documents;
  • Advising on proposed changes to the agreed form sub-contracts;
  • Reviewing of the Concessionaire satisfaction of the conditions precedent to the PPP contract, often including the validity of licenses and permissions obtained by the preferred bidder, formation of corporate vehicles in the form required, financial close of the project financing, and implementation of the commercial requirements for performance of the project;
  • Developing processes for reaching agreement, including: a second set of negotiations with the lenders arguing similar points as those raised by the Concessionaire during the initial negotiation process and new issues often focused on financial covenants and protections.

 

This may involve extended discussions of Government financial participation to protect the lenders from specific risks. The legal service providers should be involved in these discussions:

  • Review and negotiation of the financial documentation which will often have a direct effect on the rights and obligations of the Government;
  • Legal opinion that transaction is binding on its terms;
  • Legal opinion on security and financial management structure, and
  • Legal opinion on revenue structure and current regulatory mechanism.
  • Ensuring that all agreements reached are incorporated into all the financial, commercial and legal documentation and assisting with drafting the necessary and related correspondence.

 

The final terms of the agreement, each as negotiated with the Concessionaire, must be submitted by the LWC, along with the Concession agreement management plan for the Project, for approval by the State Authorities. The transaction advisor working with the LWC is responsible for compiling the necessary submissions for the State MINISTRY to obtain this approval, including a comprehensive legal due diligence of the accounting officer/authority has been completed. This will relate to legal compliance, competence and capacity to enter into the PPP agreement.

 

PPP agreement signature, close-out report and case study, and financial closure.

 

The transaction advisor must help the LWC with all functions related to signing the final agreement through to financial close. The transaction advisor must also compile a comprehensive close-out report and case study, and must incorporate any additional factors that may be required by the State MINISTRY. The close-out report will be a confidential document of the MINISTRY. The case study will become a public document, made available on various government websites.

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