that had also been involved in the water and sewer concession; Éléctricité de France (EDF),
the French national utility; the government of Côte d’Ivoire; and other Ivorian shareholders.
While EECI was to have a continuing and important role as the owner of the assets,
directing new investments, overseeing CIE and managing the financial flows of the electric-
ity sector, CIE assumed responsibility for the operation, maintenance and necessary upgrades
of the country’s generation, transmission and distribution facilities, in return for an exclusive
franchise with the ultimate consumers of electricity. The government retained ownership of
the gas fields and guaranteed the power sector’s take-or-pay contracts with gas producers. It
continued to set all fuel and electricity tariffs. It also established a ‘waterfall’ system of
priority for the allocation of electric power revenues. CIE’s remuneration, about 35 per cent
of total receipts, came first, followed in order of priority by payment of fuel and energy
expenses, other sector operating expenses, debt service requirements, required reinvestment
by EECI or CIE and rural electrification. This would set an important precedent for future
management of the power sector.^3
CIE was able to turn the system around quickly, improving billing, collections and over-
all financial management, and starting to earn a profit within two years. Earnings from the
electricity sector in turn helped the government to make overdue payments on its own inter-
national debt. Meanwhile, EECI, many of whose staff were transferred to CIE, did not func-
tion effectively in its supervisory role. As a result most of its responsibilities were shifted to
other government organisations.
Success with the CIE concession led the government to increase private-sector partici-
pation. In 1994 it granted a build-own-operate-transfer (BOOT) concession to Compagnie
Ivoirienne du Production d’Électricité (CIPREL), the first independent power project in sub-
Saharan Africa (South Africa excluded.) CIPREL is owned by Valener, a local holding com-
pany that in turn is owned by subsidiaries of Bouygues and EDF, Agence Française de
Developpement (AFD), the IFC, and the West African Development Bank (BOAD). The pro-
ject is financed with 25 per cent equity and 75 per cent debt, with the debt provided by the
IFC, the AFD and the BOAD. External financing accelerated construction of the project’s
first phase, commissioned in March 1995, to meet urgent demand for electricity. The second
phase, commissioned in June 1997, was financed under less time pressure by the state with
proceeds from an IDA loan. CIPREL sells its energy to the state under a 19-year take-or-pay
power purchase agreement (PPA) and operation of the facility is contracted out to CIE. The
CIPREL concession contains an indexation formula that adjusts the local-currency electri-
city tariff for inflation and changes in taxes. There is no explicit allowance for changes in the
exchange rate, but the consortium believes that the government would agree to renegotiate the
tariff in the event of a devaluation.^4
During the 1990s several new regulatory commissions were established to oversee the
electricity sector, with responsibilities including investment planning, financial controls, asset
rehabilitation, rural electrification, debt service and monitoring the CIPREL contract. Their
success was mixed. In an article in the Journal of Project Finance(Fall 2000), John S. Strong
described them as ad hocstructures put in place in response to specific problems and oppor-
tunities, with no clear overall sectoral or regulatory framework.
After a study commissioned by the World Bank, EECI and the other commissions were
replaced by three newsociétés d’état(state entities):
•a state holding company in charge of managing state assets and overseeing financial flows;
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