The project buys natural gas, the primary fuel for the project, under a fuel supply con-
tract with the government. The government in turn buys the gas from Ocean Energy (United
Meridian International Corporation at the time of the project financing) and Apache, both
producers in Côte d’Ivoire’s offshore gas fields. Two separate pipelines were built from the
Vridi gas terminal in Abidjan to the Azito plant. Wibros built Apache’s pipeline and Michael
Curran, a smaller US contractor, built United Meridien’s pipeline.
ABB is participating in a joint venture to fulfil the operating and maintenance contract.
Project risk factors
Construction, operating, gas supply and commercial risks
Construction risk is mitigated by a fixed-price, date-certain EPC contract.
Operating risk is mitigated by an all-in operations and maintenance (O&M) contract.
Gas supply risk pertains to the adequacy of supplies in the offshore fields. All parties
agreed that these would be sufficient to supply the Azito project but would have to be re-eval-
uated in the event of another power project after Azito.
Commercial risk, in terms of the respective prices of fuel and electricity, known as the
‘spark spread’, is assumed by the government. The government has made a commitment to
set electricity tariffs at a level that ensures the financial viability of the sector, but it may be
politically constrained as to the level of tariffs that it can charge to the ultimate consumers.
Country risk
Côte d’Ivoire, located on Africa’s Atlantic coast, gained independence from France in 1960.
The country’s original president, Félix Houphouët-Boigny, served until his death in 1993.
His constitutional successor, Henri Konan Bedie, was elected in his own right in 1995 and
served until Robert Guei staged a military coup in 1999. The country was once known for
its political stability, which since 1999 has deteriorated. The election of President Laurent
Gbagbo, in October 2000, was marred by violence in part because the main opposition
leader, former Prime Minister Alassane Ouatara, was excluded. Reflecting the country’s
regional and religious divisions, Ouatara, a Muslim from the north, had also been an oppo-
nent of Bedie, a Christian from the south. In September 2002 an attempted mutiny by a
group of soldiers facing demobilisation developed into a failed coup attempt that claimed the
lives of Robert Guei and the Interior Minister. Since then, rebels have held Bouake, Côte
d’Ivoire’s second largest city, and a large part of the country’s northern region. France, the
former colonial power, with between 20,000 and 25,000 citizens resident in the country, and
significant economic interests, has provided military and transport support to the Gbagbo
government, and the 15-member Economic Community of West African States (Ecowas),
has attempted to mediate.
Although it is classified by the World Bank as a ‘low-income country’, a per-capita
income of US$700 in 2000 defines Côte d’Ivoire as the second most developed economy in
sub-Saharan Africa, behind South Africa. Despite its dependence on traditional exports, the
country has one of Africa’s most diversified economies. Coffee and cocoa exports comprise
40 per cent of GDP. Other agricultural exports include sugar, rubber, bananas and cotton.
Industry consists mainly of processing agricultural produce and import substitution of con-
sumer goods. A growing financial services sector and tourism also have contributed to the
AZITO, CÔTE D’IVOIRE