INVESTING IN SOUTH SUDAN

A PRESENTATION TO “CROISSANCE PEACE”.

A FRANCO-CHINESE BUSINESS ORGANISATION

EMBASSY OF THE REPUBLIC OF SOUTH SUDAN IN

FRANCE

PARIS,3rd MARCH 2015

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INTRODUCTION

After a mile-stone referendum on self-determination, SouthSudan became the newest nation on July 9th, 2011.

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1- GEOGRAPHY

RSS is a landlocked country with a surface area of 644 329

square kilometer, boarded by the Sudan, Central African

Republic, the Democratic Republic of Congo, Uganda, Kenya and

Ethiopia.

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2.DEMOGRAPHYMulti-ethnic society of about 64 tribes with a population of 11. 562. 695 of which those below 30 years constitute 75% of the population.

4.0 m 2.2 m

0

1

2

3

4

5

Displaced Returnees

Mil

lio

ns

Still Displaced

2.3 mPre-CPA

Post-

CPA

Post-

CPA

72% under 30

Remittances

$281 m $203 m $236 m

$354 m

$620 m $599 m

$-

$200

$400

$600

$800

2004 2005 2006 2007 2008 2009

Mil

lio

ns

Youthful, fast-growing population Returning Residents

Male Female

Economic Impact

Fast-growing population further swelled by: 2 million IDPs returning to farming and

other economic activity 300,000 diaspora returning from abroad

with education, know-how and capital

Drives demand for agricultural inputs and equipment, consumer goods, etc.

Source: Southern Sudan Relief and Rehabilitation Commission, International Organization for Migration, CAD

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3- ECONOMY

The main source of the economy is oil (98%), with small

contribution from tax collection and agribusiness.

3.1 The GDP is 14.77 billion US dollars

3.2 The per capita is 1900 US dollars

3.3 Growth rate 24.7%

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4- WHY INVEST IN SOUTH SUDAN?

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4.1 Conducive investment climate

Economic

Legal

Security

Stable democratic system

with elections every four

years

Legislative system with

an upper and lower

house

Independent judiciary

system

Political

Growing economy with a

priority to diversify away

from oil

Subsistence farming and

cattle-herding in rural

areas

Artisanal gold mining

throughout the country

Robust commercial

legal environment

Land Act in place to

promote private sector

investment

Established regulatory

environment

Directed by rule of law

Peaceful transition to

independence

Continuing efforts to

enhance security

Isolated incidents

along the border

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Political and Institutional

Framework

Tax incentives include:

Capital allowances: 20%-

100%

Deductible annual

allowances: 20%-40%

Other depreciation

allowances: 8%-20%

Duty exemptions and

concessions for imports of

machinery, equipment, and

agricultural products aiming

to boost food and cash crop

production

Favorable land tenure

policies

Favorable Investment

Promotion Policies

Investment Promotion Act of

2009 provides investor

protections in 7 key areas,

including:

Guarantees against

expropriation

Protection for intellectual

property rights

Mechanisms for dispute

resolution

Republic of South Sudan has

a priority to develop Public-

Private Partnerships to

facilitate investment in key

sectors

Regional/International

Political and Trade

Agreements

African Union

Common Market for East

and Southern Africa

(COMESA; in process)

European Union (EU)

American Growth and

Opportunity Act (AGOA)

East African Community

(EAC; in process)

Overseas Private

Investment Corporation

(OPIC; in process)

4.2 A positive, pro-business regulatory

environment

Established the South Sudan Investment Authority to create centralized

support and service center for investors considering investing or re-

investing in South Sudan. Services include:

Planning, Research and Information Systems

Proactive Investment Promotion

Investor Aftercare

Other Investor Services

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4.3 Ease of doing business

One-stop Shop Investment Center was established in 2011 and will

provide an informative and easy first step for investors, issuing:

Necessary paperwork including investment certificates, licenses,

and permits

Customer care services to facilitate meetings and arrangements

with business and regulatory agencies

One-Stop Shop Investment

Operationalized October 2013

4.4 Favorable potential local and International markets

Common

Market for

Eastern and

Southern

Africa

African

Growth &

Opportunities

Act

• Under AGOA South Sudan will be permitted to export eligible products to the US duty free

• Free trade area between 19 member states extending from Libya to Swaziland

East African

Community

• Free Trade access for members for the community

• Common tariffs on imports from third countries

EU

“Everything

But Arms”

• Duty Free & Quota Free Access tor products into the EU for the 49 LDCs

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Infrastructure

Petroleum

Mining

Agriculture

5. INVESTMENT POTENTIALS

OF SOUTH SUDAN

Staple crops

Export/cash crops

Livestock & Dairy

Poultry & Eggs

Fisheries

Forestry

Inputs

Gum acacia

Oil production

Oil exploration

Oil refineries & pipelines

Oil services (audit, laboratories, environmental assessment, data management, etc.)

Mining opportunities in gold, copper, lead, zinc, uranium, marble, aluminum, iron, and diamonds

Detailed geographical mapping and

surveys

Broader mining services (testing labs, data management, etc.)

Production of industrial materials

Construct 4,000 km in new roads

Build and upgrade regional airports and Juba International Airport

Develop hydro-electric power projects along the Nile River

Construction of new capital at Ramciel

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5.1 ENERGY 5.1.1 Fossil energy

Oil contitutes 98% of our revenu. Oil reserves are estimates at 3.71 billions making the country to rank 3rd of oil producing countries in Subsahara Africa behind Nigeria and Angola.

Only a small pourcentage of these reserves are exploited.

NB: Proven reserves of naturel gas in RSS is estimated at 1.1 trillions cubic meter.

14Source: European Coalition on Oil in Sudan

Producing

Not Yet Producing

Border

Border

OF THE BLOCKS IN SOUTH SUDAN, JUST 5 ARE

CURRENTLY PRODUCING AND EXPORTING

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Block 5b (under exp

Sudapet Petronas) Seeking

additional partners

Block A (Sudapet Saffir) is

seeking additional partners

Block B lin to Total

Consortium and Kupec

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5.2. PIPELINES

Refinery

Refinery

Refinery

Existing pipelines

Existing pipelines and refineries

Major Pipelines:

• 1,000-mile pipeline from Heglig and Unity fields to the Suakin oil terminal

• 870-mile pipeline linking Melut Basin to oil export terminal near Port Sudan

• 110-mile pipeline linking the Thar Jath and Mala fields to Port Sudan

Major Refineries:

• Khartoum: 100,000 barrel per day

• Port Sudan: 21,700 barrel per day

• El-Obeid: 10,000 barrel per day

Source: International Energy Agency (IEA), US Energy Information Administration16

Sources: Ministry of Petroleum and Mining, media reports

Planned pipelines

Toyota Tshusho recently submitted a proposal to design and construct a 3600km oil pipeline from South Sudan to the new port planned for Lamu on Kenya's Indian Ocean coast

Chinese officials and companies have also expressed interest in building the proposed pipeline

Alternative proposals include:• A 3000km pipeline through Ethiopia

to Djibouti• A shorter 800km pipeline to Uganda,

connecting to the proposed pipeline expected to carry Ugandan crude to Mombasa

The Government of South Sudan is open to all proposals

Potential pipeline routesCurrent status

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5.2.1 NON FOSSIL ENERGY

Fossil energy is finite and can be a threat to the environment andthe climate if not handled carefuly, as the country posses hugereserves of water, enjoys long periods of sunshine and perennialwinds, investment in renewable energy should now aim atdevelopping in these sectors.

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5.2.2 HYDROPOWER

Feasibilities studies are already available to construct four dams at

accessible sites on the white Nile between the Ugandan borders and

Juba plus additional 16 small ones accross the country.

20Source: SMEC “Pre-Feasibility Study Report” Oct 2009 – Parameters for recommended options

Dam: Fula Shukoli Lakki Bedden

Potential installed capacity

855 MW 1100MW 609 MW 522 MW

Dam height (max above river bed)

60M 75M 45M 42M

Dam length 760M 500M 385M 2775M

Turbines9 X

95MW11 X

100MW7 X

87MW6 X

87MW

Lead Time 5 years 5 years 5 years 5 years

1 2 3 4

Proposed Bahr El Jebel Dams

Dams to be contructed

Lakki

Shukoli

Fula

Fula

. Shukoli

Lakki

Bedden

Uganda

Border

Juba

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5.2.3 SOLAR

12 hours of sun / day in most seasons.

Solar radidation estmated at 5-6 kmh / m2 / day.

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Type of solar pannels

South Sudan experiences approximately 12 hours of sunshine per day all year round

Solar radiation 5.5 – 6.0 KWh/m²/day

Potential for small-scale PV installations to serve schools, health clinics, irrigation projects and commercial customers

Potential for larger scale solar thermal power plants in northern part of country

Source: weather-and-climate.com

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5.2.4 BIOMAS

Sugar cane, maize

Wast-power in most towns of the country

24Source: Ministry of Agriculture & Forestry; “Biomass energy potential and future prospect in Sudan” University of Nottingham

Sugar canes farms and factory

Given significant food imports, ample land and ideal climactic conditions, there is significant potential for combined food production and biomass-based power generation projects in various parts of the country

For starters, the Government is hoping to attract investors to restart 2 large-scale sugar and cogen projects at Melut and Mangala and a large-scale oil-palm mill and cogen plant at Nzara

The Government is also interested in proposals for urban waste-to-power projects in Juba and other major towns

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5.2.5 WIND-POWER

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6. MINING

South Sudan has proven reserves of various mineral

South Sudan mineral geological map

Source: Ministry of Petroleum & Mining

Geology of South Sudan showing major mineral deposits

Au: Gold

Cu: Copper

Fe: Iron

Mg: Manganese

U: Uranium

Zn: Zinc

CaO: Marble/Dolomite

◊: Gemstones

CaO

CaO

Cu

Cu

Cu AuAl

Al

Al

Mg

Fe

CaO

Au

Mg

Au

Zn

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7. INFRASTRUCTURES

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7.1 ROADS

Only 60 miles of paved roads

5208 km network of roads to link all major towns and boarders

crossing with CAR, DRC, Ethiopia, Kenya and Uganda.

Proposed road network

Source: USAID, Ministry of Transport and Roads, Ministry of Water Resources & Irrigation, South Sudan Development Plan 2011-

2014

More than 5000km of gravel roads have been constructed or rehabilitated, with another 3500km targeted for completion in the near future

3 new power plants and localised distribution networks have been built in Juba, Malakal and Wau

New airport terminal in Juba under construction and 5 regional airports are currently being rehabilitated

2 ports along the Nile are under construction, giving access to 1500km of navigable water

5 international telecom companies have established operations, bringing mobile coverage to 70% of the country

Water supply and treatment plants have been constructed and/or renovated in 5 cities

Major Infrastructure Achievements

Major Road Projects

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7.2 AIR TRANSPORT

3 IATA – standard airports

7 addional air-strips

All government owned but there is a possibility for interrested

investors to upgrade and operate any airports

32Source: (1) Airports in Sudan: Aircraft Charter World

(2) Presentation by the Directorate for Civil Aviation: Strategic work plans for Air Transport / Civil Aviation in Southern Sudan

Airport IATARunway

lengthRunway Customs IFR

Juba JUB 7800 ft Paved Yes Yes

Malakal MAK 6000 ft Paved No No

Wau WUU 7800 ft Unpaved No No

Aweil 2900 ft Unpaved No No

Bor 4100 ft Unpaved No No

Gogrial 3000 ft Unpaved No No

Pibor 3500 ft Unpaved No No

Rumbek 2800 ft Unpaved No No

Torit 3500 ft Unpaved No No

Yambio 3900 ft Unpaved No No

Existing airports

3 IATA-standard airports at Juba, Malakal and Wau, and 7 additional regional air-strips

All airports currently government owned and operated

Government has recently completed new terminal at Juba

However, government is open to proposals from investors interested in upgrading and operating any airport

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7.3 RAIL TRANSPORT

The only existing rail road is from Wau to Babanoussa in Sudan.

There is a proposed rail to connect Juba to Kampala and Nairobi.

34Sources: Ministry of Transport. Media reports

Existing and proposed railway network

The only existing line in South Sudan connects Wau to Babanusa and then on to Khartoum – the line was closed for many years, but reopened in 2010

With increase in freight and particularly potential for large-volume mineral exports, commercial opportunities may exist to build railway line connecting Wau to Juba and then on to link Juba to Mombasa via existing railways in Kenya and Uganda

Consortia led by Thyssen Krupp and Thormaelen have already expressed interest in building this critical link between the Red Sea and Indian Ocean

Proposed Railway Network

Existing track,

recently reopened

Proposed track

KampalaNairobi

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7.4 RIVER TRANSPORT (BRIDGES)

Between Sudan (Kosti) and Juba

Juba to Jinja (Uganda)

Along major tributries (Sobat) inside the country

Contruction of bridges over many rivers in South Sudan

36Source: Ministry of Transport, Ministry of Roads & Bridges

After 30 years of war and neglect, South Sudan’s transport infrastructure (roads, railways, river transport, airports) is virtually non-existent

The government, with support from donors, has embarked on a major investment program, rebuilding more than 2000km of roads, upgrading the main airport at Juba, and reopening the railway line from Babanusa to Wau

However, given the scale of work needed, the government is eager to attract private investors to build and operate infrastructure wherever the commercial returns make this attractive – so that the government can focus public resources on infrastructure that cannot be commercially operated (urban and rural roads, remote landing strips, etc.)

Juba bridge and airport

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7.5 BUILDINGS

Schools

Hospitals

Lodgment (low cost house)

Government building

38Source: Ministry of Housing and Physical Planning

Buildings undercontruction in Juba city

Juba Population (estimates) With population growth and returning IDPs

and diaspora, the population of Juba and South Sudan’s other towns has been growing at a phenomenal rate – the population of Juba alone has grown from 163,000 to over 450,000 in the last 5 years

As a result, there is huge unmet demand for:

• All levels of housing from low income to high end

• Offices for new businesses, government ministries, embassies, donors, etc.

• Retail shops, wholesale markets, shopping malls

• Industrial parks and zones

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7.6 COMMUNICATION

Mobile ( 4 operators, 2 million users)

Media (Radio, TV, press)

IT (High speed cable)

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7.7 MANUFACTURING

Cement, Iron steel (buildings materials)

Consumer goods (oil, dairy products, hygiene, medicines)

Heavy equipment (Assembled cars, trucks, tractors, spare parts)

South Sudan has the raw materials for local manufacturing of cement and most key construction materials

Potential sources of construction materials

2 major limestone deposits at Kapoeta and Yambio – each estimated to be at least x,000 tonnes

Widespread availability of granite and other stones and aggregates

Deposits of marble, mica and graphite in the South

Widespread availability of clays, sands and gravels (and kaolin) in central plains

Limestone

Limestone

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7.8 SANITATION

Provision of clean water to the population and cities and rural areas

Waste and sewage disposal (wast-to-power source of bio-energy)

Provision of medicines and medical equipment

Present health care system in South Sudan

Teaching Hospitals

State Hospitals

County Hospitals

Primary Healthcare Units and Centers (PHUC)

• 3 Teaching Hospitals (Juba, Wau, Malakal) • Capacity: 100 – 150 Beds • Publicly owned and operated to standardize

medical practice across the country

• 9 State Hospitals• Capacity: 100 – 150 Beds • Publicly owned. Accept patients from County

Hospitals for special treatments

• 28 County Hospitals• Capacity: 15 – 20 Beds • Publicly owned. Patients typically referred by the

PHUC

• 1,408 PHUC• Publicly owned, but run by NGOs and the Donor

community • First point of contact for all illnesses

South Sudan Public Healthcare System

Source: World Bank, Ministry of Health 43

The Ministry of Health recognises that it does not have the capacity to rebuild and run all the medical facilities

required ;

The Ministry therefore plans to bring in private contractors to run key elements of the medical system,

specifically the drug procurement & distribution system, the 3 Teaching Hospitals and the 9 State Hospitals ;

The Ministry is currently working on terms and conditions for these PPP concessions, based on a formula of

guaranteed volumes, a government-defined fee schedule and a component of patient fee for services.

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8. AGRO-BUSINESS

South Sudan has vast areas of fertile arable (30 hectares) land giving her the potential to become a bread-basket of Africa.

Staple cropsExport/cash cropsLivestock & DairyPoultry & EggsFisheriesForestryInputs

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Gaps to be filled

Capacity-building and development of our local workforce

Need to import equipment, tools, and agriculture inputs, given

lack of current production capabilities

Standardize regulations and processes as we continue to

develop our legal framework

Limited transportation and energy infrastructure throughout

the country

Enduring negative perception in international media

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Protection of the environment should be the priority throughout

our efforts to develop the country.