Congo-Brazzaville: effective liberalisation of electricity and water utilities - Decrees no. 2017-247 to no. 2017-258, 17 July 2017

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[co-authors: Olivier Bustin, PhD and Vieira de Almeida & Associados]

14 years after the promulgation of the Electricity and Water Codes (Codes), several decrees have been adopted in Congo-Brazzaville, which include arrangements for the delegation of public service management in the electricity and water sectors, charging methodologies, and the methods of water use in the public domain for energy purposes.

The three main delegation contracts envisaged by the Codes are concession, leasing and interested management. The important issues that these contracts would typically deal with include the following:

  • exclusive right of exploitation;
  • authorisation of occupation and use of the public domain;
  • user fees;
  • duration of the contract;
  • transferability of rights and obligations;
  • recourse to subcontracting;
  • exercise by the administration of its power of unilateral modification; and
  • absence of tacit or automatic renewal.

Ownership of the equipment (and other assets) necessary for the operation of the delegated public service is organised according to the distinction between returnable assets and property of recovery. However, it is up to the parties to agree on their terms of surrender and redemption of the equipment (and other assets) at the end of the term of the contract.

The delegation contract is awarded based on a call for tenders. However, the Prime Minster may, after consideration of a reasoned report by the responsible Minister, authorise that a specific candidate be appointed through direct negotiation to develop new production or distribution capacities of electricity or potable water. The studies and research of the project must be financed by such candidate and validated by an inter-ministerial commission prior to its implementation.

We note that the Codes make no reference to the special authorisation of the General Directorate for Controlling Public Contracts (DGCMP). However, such authorisation may be required in terms of the Public Procurement Code (Article 71 et seq.). The Central African Electricity Market Code requires delegations to be placed in accordance with the national rules for awarding contracts and public contracts (Article 29) – accordingly, it would seem prudent to involve the DGCMP where there are deviations from the standard procurement procedures.

Lastly, the regimes of independent production and self-generation of electricity are specified Codes. Conversely, the conditions for the self-production of water for personal use provided for in the Codes (Article 76) have yet to be determined, although water capture rights are now regulated (decree no. 2017-255).


Dentons takes this opportunity to thank Olivier Bustin, PhD, French and Portuguese qualified attorney, Vieira de Almeida & Associados for his contribution to this month’s newsletter.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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