LAW ON PUBLIC-PRIVATE PARTNERSHIPS

CHAPTER 1

General Provisions

ARTICLE 1

(Purpose)

The purpose of this law is to define the general standards applicable to State
intervention in determining, designing, preparing, tendering, adjudicating, modifying,
controlling, and overall monitoring of public-private partnerships.

ARTICLE 2

(Definition of public-private partnership and scope of application)

1. For the purpose of this law, public-private partnership shall be understood as

a contract, or a combination of contracts, whereby private entities,
designated as private partners, assume a long-term obligation with a public
entity, in order to ensure the development of an activity aimed at meeting a
collective need, and in which the private partner takes in charge, in whole or
in part, the funding and the responsibility for investment and operation.

2. Public partners are:

a) The State and local Authorities;

b) Funds and Autonomous Services;

c) Public Corporations.

3. This law is also applicable to all partnerships, in which the equivalent to a

non-public partner is a cooperative or a nonprofit-making private institution.

4. Amongst others, the following are legal regulatory instruments of

collaborative relationships between public and private entities:

a) Concession contract for public works;

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 b) Concession contract for public services;

c) Continuous supply contract;

d) Service contract;

e) Management contract;

f) Collaboration contract, when the use of an already existing

establishment or infrastructure is involved.

5. Public-private partnerships may involve:

a) Wholly onerous concessions to the State;

b) Partially onerous concessions to the State;

c) Non-onerous concessions to the State.

6. Excluded from the scope of application of this law are:

a) Public work contracts;

b) Public supply contracts;

c) All public-private partnerships involving an investment or contractual

amount not exceeding Kz500,000,000.00 (five hundred million
Kwanzas).

d) All other contracts for the supply of goods or services, with duration
equal to or less than three years, in which the public partner does not
assume automatically any obligations upon termination of the contract
or beyond.

7. Public-private partnerships established by public corporations in a corporate

form shall, with due adaptations, comply with the material requirements and
the principles set forth herein, especially those resulting from Articles 4, 5, 6,
7, 17, and 20. The relating monitoring and control shall be carried out by the
ministerial departments and those of the relevant sector, and exercised
through the State shareholding role.

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 ARTICLE 3

(Prevalence)

1. The provisions of this law shall prevail on any other standards relating to
public-private partnerships, as defined in Article 2.

2. Without prejudice to the foregoing, where the specificity of a given sector so

requires, special sectoral regimes could be established by law, under which
standards deemed necessary or convenient would be defined considering the
specific characteristics of the concerned sector, in order to ensure that the
aims are accomplished, and the overall prerequisites for establishing public-
private partnerships are fulfilled.

3. The special sectoral regimes referred to above could include:

a) Economic, financial and technical principles and rules;

b) Specific procedural standards;

c) Assigning to a relevant sectoral entity the competencies to identify,

prepare, pre-assess, monitor, and review the establishment of
partnership projects.

ARTICLE 4

(Aims)

The essential aims of public-private partnerships are to improve efficiency in

allocating public resources, enhance the State’s ability to carry out investments,
and qualitative and quantitative improvement of service through effective
controls enabling their permanent evaluation by potential users and the public
partner.

ARTICLE 5

(Distribution of Responsibilities)

Under public-private partnerships, the public partner’s role is to monitor and

supervise the execution of the partnership purpose, in order to ensure that the

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underlying aims of public interest are accomplished, while the private partner’s
role is, preferably, to finance, as well as to exercise and manage the procured
activity.

ARTICLE 6

(Prerequisites)

1. In order to establish a public-private partnership, the following shall be taken

into account:

a) Public-private partnerships to be approved of shall form part of the

Master Plan for Public-Private Partnerships (PGPPP), a pluri-annual and
multisectoral document that defines the strategy of public-private
partnership and developed with the collaboration of all ministerial
departments, which must be approved of by the Executive.

However, exceptionally and for duly established reasons, public-private

partnerships outside PGPPP could also be approved of;

b) Where it is the case, fulfillment of standards relating to the financial

programming included in the Law on the Budget;

c) Clear statement of the partnership objectives, following the definition

of the intended results and enable an adequate assignment of
responsibilities to the parties;

d) Configuring a partnership model that provides to the public partner

benefits relating to alternative ways of accomplishing the same aims,
namely through a traditional procurement model, such benefits being
assessed in the same terms provided for in the Law on the Budget and
which, concomitantly, provide private partners with an expectation to
obtain adequate return for the amounts invested, the level of risk
incurred in and, equally, the estimated time for the execution of the
same work;

e) Prior adjustment to legal standards and other normative instruments,

as well the procurement of the required permits and administrative
advice, such as, inter alia, those of environmental and urbanistic

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 nature, which underpin the project development, in such a way that
risks are adequately distributed amongst partners who are better
prepared to bear them;

f) Configuring partnerships models that avoid or minimize, whenever

possible and save for adequate reason, the likely occurrence of
unilateral modifications to contracts imposed by the public partner or
any other factors or circumstances that generate or increase the
obligation to restore financial equilibrium, namely the non-defining of
contractual installments, the unpredictability of the matter, the
extension or uncertainty regarding the duration of the commitment, as
well as the assumption of terms and conditions for restoring such
equilibrium or other compensatory regimes that may be excessively or
unjustifiably costly or inadequate in view of the partnership effective
risk profile;

g) Adopting, in the pre-contracting phase, efforts and providing

requirements deemed adequate to achieve an economically or socially
competitive negotiating outcome;

h) Express identification of the public entity responsible for bearing the

costs resulting from payments to be made to the private partner, when
such payments are expected to take place, as well as the identification
of funding source.

2. The technical, economic, and financial study of public-private partnership

shall have a level of details consistent with the financial dimension of the
contract, and the ministerial department shall communicate and normalize
the relating roadmaps or manuals for the development and submission of the
above-mentioned partnership proposals, as well as disclose the
macroeconomic parameters to be adopted.

3. The assessment of partnership project compliance with the prerequisites

referred to in number one should be carried out with the highest degree of
accuracy possible, taking into consideration the current stage of the project.

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4. With regard to environmental licensing, in particular, when required by the
applicable law, such license should be obtained prior to the start-up of the
partnership.

5. Where proposals with variants based on prerequisites other than those which
formed the basis for environmental licensing are submitted, the private
partner shall exclusively take due care of the risks inherent to the variant.

ARTICLE 7

(Risk Sharing)

Risk sharing between public and private entities shall be clearly identified
contractually, and comply with the principle that different risks inherent to the
partnership should be shared between the parties in accordance with their
capacity to manage such risks at the least costs for the projects.

CHAPTER II

Assessment of Partnerships

ARTICLE 8

(Partnership Sectoral Programs)

1. Partnership sectoral programs could be developed in accordance with political

priorities and sectoral investments, which will involve an articulate set of
projects resorting to private management and funding, in the terms of the
Law on the Budget.

2. The Sectoral Relevant Ministry could assign the coordination and technical
support for the development of the projects included or to be included in the
sectoral programs to specialized units or technical structures entrusted with
the submission of the relating pre-study.

3. The above-mentioned study must prove the project ability to attract the
private sector, preferably the Angolan private sector as potential interested
parties, but also the existing market conditions, and with the express

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 authorization of the relevant ministerial department, the study could be
performed by the private partner.

ARTICLE 9

(Bodies supporting public-private partnerships)

1. Before being submitted to the Holder of the Executive Power, public-private

partnership projects must be reviewed by the Ministerial Committee for the
Review of Public-Private Partnerships (CMAPPP), which has the competence
to:

a) Review and deliberate on the procedure manual for the selection and
hiring related to the State participation in investments and the social
capital of joint undertakings with private shareholders, to be approved
of by dispatch of the relevant Ministry;

b) Review and deliberate on the Master Plan for Public-Private

Partnerships (PGPPP);

c) Approve of public-private partnership related project proposals, as

submitted by the sectors with a prior opinion of the Relevant Ministry;

d) Guide the procurement process, after consulting the Court of Auditors

on the legal conformity of the process and approval by the Holder of
the Executive Power;

e) Review and deliberate on the contract implementation reports

submitted by the relevant ministerial departments and generated by
the supervisory bodies.

2. The Ministerial Committee for the Review of Public-Private Partnerships

(CMAPPP) is composed of:

a) The Minister of Economy – Coordinator;

b) The Minister of Finance; and

c) The Minister of Planning.

3. The Relevant Minister of the Sector in which the project under consideration
is to be developed, as well as the local administration Governor may attend

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 the meetings of the Ministerial Committee for the Review of Public-Private
Partnerships to consider PPP’s-related projects.

4. In the performance of its duties, the Ministerial Committee for the Review of
Public-Private Partnerships (CMAPPP) relies on the support from the relevant
ministerial department, which can seek specialized technical support from
within the Ministries or other State agencies, as well as hiring external
consultants.

5. The relevant Ministry shall be responsible for articulating, promoting, and

advertising the Master Plan for Public-Private Partnerships (PGPPP).

ARTICLE 10

(Partnership preparation and study)

1. The Sectoral Relevant Ministers willing to initiate public-private partnerships,

considering that these should form part of the Master Plan for Public-Private
Partnerships, shall notify the Ministerial Committee for the Review of Public-
Private Partnerships, as well as advise on the date on which project studies
and documentation are to be forwarded, in accordance with the manuals to
be established by the relevant ministerial department and developed pursuant
to paragraph 2 of article 6 hereof.

2. Partnership study and preparation shall take into consideration the suitability
of a prior investigation of how the private sector is positioned vis-à-vis the
type of partnership, in view of, namely, identifying potential interested parties
and examining the existing market conditions and, where applicable, updating
the pre-study referred to in number 2 of article 6 hereof.

3. It is the duty of the relevant ministerial department to review the

prerequisites followed by the study submitted, seek, if necessary, further
clarifications and analyses for an adequate integration of the partnership
proposal with the Executive’s objectives and maximize its positive impact on
the economy, as well as, especially:

a) Promoting an effective articulation between the entities involved with a

view to setting speed and efficiency to the relating action;

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 b) Proposing to the Executive solutions and measures it deems more
suited to the defense of public interest;

c) Proposing legal instruments adequate to the start-up and execution of

the partnership project;

d) Submitting, when requested, a justification with regard to the strategic

motivation of the project and the model to be adopted, while proving
the inexistence of more technically and operationally efficient or
financially fair comparable alternatives;

e) Showing the budgetary comparability of the partnership;

f) Collaborating with the entities responsible for the supervision and

overall monitoring of public-private partnerships.

ARTICLE 11

(Approval of Partnership)

1. The dossier to be submitted to the Ministerial Committee for the Review of

Public-Private Partnerships (CMAPPP) shall include the following elements:

a) The applicable adjudicative procedure program;

b) Contract documentation (specifications);

c) An analysis of options underlying the project configuration;

d) Project description and its funding modality;

e) Expression of its public interest;

f) Justification of the chosen partnership model;

g) Demonstration of the behavior of the costs and risks arising from the
partnership, considering the pluri-annual financial programming of the
public and administrative sector;

h) Environmental licensing, where required, under the applicable law;

i) Rough draft of the contract.

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 2. Upon receipt by the Ministerial Committee for the Review of Public-Private
Partnerships (CMAPPP), pursuant to paragraph 1 of article 10 hereof, the
partnership proposal shall be referred to the consideration of the relevant
ministerial department, which should communicate the date for sending its
report to CMAPPP, taking into account the technical and economic dimensions
of the project;

3. The report of the Relevant Ministry looks particularly at whether:

a) the final partnership model proposed by the sectoral Relevant Ministry

complies with the provision of paragraph 1 of article 6 and that of
article 7 hereof;

b) the rights and obligations of both the public partner and the private
partner are adequately defined;

c) the partnership risks (Risk Matrix), as well as their potential impact on

the public partner are adequately quantified and allocated.

ARTICLE 12

(Start-up of a public invitation to tender for the partnership)

1. The Ministerial Committee for the Review of Public-Private Partnerships

(CMAPPP) shall, finally, deliberate on the start-up of the partnership and the
relating requirements, and shall submit its opinion to the relevant Ministry, which
shall implement the selection and negotiation procedures of the partnership
terms.

2. Partnership start-up follows the applicable adjudicative procedure as previously

approved of by the Court of Auditors, in accordance with the legislation on public
procurement.

3. In the course of selecting the private partner, the ongoing process can be
interrupted or cancelled at any time, through a deliberation by the Ministerial
Committee for the Review of Public-Private Partnerships (CMAPPP), under the
proposal of the sectoral relevant Ministry, and no right to compensation shall be
granted, whenever, in accordance with the review of the objectives to be
pursued, the results of the analyses and assessments made so far and those of

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 the negotiations held with the candidates do not suit, in satisfactory terms, the
aims of public interest underlying the establishment of the partnership, including
the estimated overall costs behavior.

4. Interruption of the process for establishing a partnership is mandatory whenever

there is only one competitor in the relating adjudicative process, save by express
and justified decision by the Ministerial Committee for the Review of Public-
Private Partnerships (CMAPPP).

ARTICLE 13

(Special Purpose Company)

1. Before concluding the contract with the contracting authority, a special purpose
company should be set up in order to establish and manage the purpose of the
partnership, which may adopt any other corporate forms provided for in the
obtaining legislation, except the cases where, at the sole discretion of CMAPPP,
other forms of entrepreneurial societies could be allowed.

2. The transfer of the control of the special purpose company shall be conditioned
to an express authorization by the Public Administration, in the terms of the
public notice and the contract, subject to the expiration of the Public-Private
Partnership.

3. The specific purpose company whose annual revenue exceeds the amount
established by the Ministerial Committee for the Review of Public-Private
Partnerships (CMAPPP) can only take the form of a public limited company, and
can issue securities negotiable in domestic or international market.

4. The specific purpose company whose annual revenue exceeds the amount
established by the Ministerial Committee for the Review of Public-Private
Partnerships shall comply with internationally established corporate management
standards and, in addition to publishing its financial statements as per the
legislation in force in Angola, it shall adopt standardized accounting and financial
statements, in conformity with the International Finance Report Standard (IFRS).

5. Public Administration shall not be allowed to be the majority shareholder of the

voting capital belonging to the corporations dealt with in this Chapter.

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6. The prohibition provided for in the previous number is not applicable to an
eventual acquisition of the majority of the voting capital belonging to a special
purpose company by a financial institution controlled by the Public Authority, in
case of failure to execute financing contracts.

ARTICLE 14

(Contract approval and signing)

1. Following the selection of the winner and the approval of the procurement
process by the Court of Auditors, the Ministerial Committee for the Review of
Public-Private Partnerships (CMAPPP) shall forward the dossier of the partnership
project, together with a rough draft of the contract, for approval by the Holder of
the Executive Power.

2. Following the approval referred to in the previous number, the contract shall be
signed by the ministerial departments of Economy, Finance, and the relevant
sector, in representation of the State.

CHAPTER III

Supervision and Monitoring of Partnerships

ARTICLE 15

(Supervision of partnerships)

Powers for the supervision and control of partnership implementation shall be

exercised by entities or services identified in the contracts.

ARTICLE 16

(Monitoring of partnership execution)

1. The Ministerial Committee for the Review of Public-Private Partnerships

(CMAPPP) and the sectoral Relevant Ministry shall monitor the partnerships,

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 with a view to assessing their risks and costs, and improving the process
aimed at establishing new partnerships.

2. The relevant ministerial department provides technical support to 2. CMAPPP

in conducting partnership supervisory, negotiating, and execution processes,
which is translated in the following:

a) Issuing opinions, collecting, and making information available on

partnership costs, risks, and financial impact;

b) Receiving, on behalf of CMAPPP, the communications provided for

herein;

c) Monitoring the ongoing proceedings in the arbitral tribunals and

providing technical support to the public partner, as required by
CMAPPP;

d) Filing and recording partnership-related matters.

3. State services and agencies, as well as entities mentioned in paragraph 2 of

article 2 hereof shall provide to the relevant ministerial department every
collaboration deemed necessary, notably by providing all elements required
from them in relation to partnership processes.

4. Without prejudice to the provisions of the previous numbers, where justified

by the complexity, the value or public interest of the partnership, CMAPPP,
together with the sectoral relevant ministerial departments may, in a joint
dispatch, designate an extraordinary monitoring committee for the initial
stage of the execution of the concerned contract, which shall define the
scope of the mission assigned to the relating committee.

5. The Holder of the Executive Power submits to the National Assembly and to
the Court of Auditors, on an annual basis, PPP’s contract performance
reports, which, save the information classified as confidential, shall be made
available to the public through a data transmission public network.

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 ARTICLE 17

(Modifications to the partnerships)

1. Any modifications intended to be made to the terms of the partnership or to

future or existing commitments between the parties, after having selected the
private partner, either by agreement by both partners or at the initiative of
one of them under any legal or contractually applicable provision, shall be
subject to the provision hereunder.

2. When a State service or agency, or one of the entities mentioned in

paragraph 2 of article 2 hereof intends to start a study or preparation for a
modification to the terms and conditions of an existing partnership contract,
such service or agency or entity shall refer the dossier to the relevant
ministerial department, which issues an opinion to be considered by CMAPPP,
jointly with the dossier submitted by the sectoral relevant ministerial
department.

ARTICLE 18

(Financial equilibrium and new activities)

1. There may be room for restoring the financial equilibrium of the relating
contract in the event of a major change to the partnership financial
conditions, notably when the public partner imposes a unilateral change to
the contents of the private partner’s contractual obligations or to the essential
conditions for the partnership development.

2. The public partner is entitled to equitable share, with the private partner, of
financial benefits resulting, for the latter, from the partnership development,
especially if the financial conditions of the partnership improve by way of
renegotiation or substitution of the financing contracts.

3. Prerequisites providing room for restoring the financial equilibrium, in favor of

the private partner, or sharing financial benefits from the partnership
development, in favor of the public partner, shall expressly form part of the
documents relating to the applicable adjudicative procedure or the
contractual deed.

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4. Control of partnership financial equilibrium takes into account the financial
model forming the base-case, which should be attached to the partnership
contract and include all private partner’s income obtained as a result of the
partnership development, including income from third-parties under sub-
franchising contracts or onerous assignment of spaces or equipment for
business purposes.

5. Restoring financial equilibrium in favor of the private partner, or sharing

financial benefits in favor of the public partner, is carried out in the following
modalities:

a) Modification to the partnership term;

b) Increase or reduction of pecuniary obligations;

c) Granting of direct compensation;

d) Combination of previous modalities or any other form to be agreed

upon between the parties.

6. Where there is room for restoring the contract financial equilibrium or share
of benefits between the public partner and the private partner, the
partnership amendment procedure provided for in article 7 hereof shall be
observed with the necessary adaptations.

7. If the private partner intends to carry out activities expressly not expected in
the partnership contract, the authorization of the entities that approved the
conclusion of the partnership contract shall, in no circumstances, be granted
if the proposals do not include the relating economic and financial projection
and sharing of the corresponding income.

ARTICLE 19

(Cost Increase)

1. Without prejudice to the observance of the legal system relating to the

realization of public expenditures, the execution, reduction or modifications of
works not provided for, or any decision that, under the execution of the
relating contract and the conditions established therein, may generate an
increase in anticipated costs for the public partner or the State, except if the

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 relating amount does not exceed Kz 200,000,000.00 (two hundred million
Kwanzas), such execution, reduction or modifications of works not provided
for will require a prior joint dispatch expressing consent of the Ministers of
Economy, Finance, and the relevant sector to be issued within sixty (60)
days, upon expiry of which such dispatch shall be tacitly assumed as issued.

2. For the purpose of the foregoing, the request submitted by the service or
entity representing the public partner in the execution of the concerned
contract shall be accompanied by the relating justification, the budget
submitted by the private partner, and the execution and payment conditions.

3. Where the Ministers referred to in paragraph 1 hereof reject the budget

proposal, as well as any eventual modifications occurring in accordance with
the negotiating process, having obtained the rejection dispatch from those
ministers, to be issued within sixty (60) days and upon expiry of which such
dispatch shall be assumed tacitly issued, the public partner may, unilaterally,
pursuant to the terms of the contract and the law, take a decision in order to
safeguard public interest in better conditions.

4. When the service or entity representing the public partner in the execution of
a partnership contract takes notice of facts that are likely to generate
additional costs for the public partner or the State, namely those arising from
delays attributable to public entities intervening in the process development,
such service or entity shall forthwith report such facts to CMAPPP and to the
Sectoral relevant minister, whenever possible, with indication of the
estimated amounts involved.

ARTICLE 20

(Arbitration proceedings)

1. Any disputes arising from the relationships established under public-private

partnerships may be referred to arbitration, pursuant to the obtaining Law on
Voluntary Arbitration.

2. Where, under an existing partnership contract, there is need to establish an

arbitral tribunal for the settlement of disputes between the parties, the
service or entity representing the public partner in the partnership contract

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 shall, forthwith, notify the persons-in-charge of the ministerial departments of
Economy and the relevant sector on the occurrence, providing all useful
details for the monitoring of the process.

3. With a view to monitoring the arbitral process, the persons-in-charge of the

ministerial departments of Economy and the relevant sector may, through a
joint dispatch, decide on the establishment of a negotiating committee.

4. On a regular basis, copies of any pleadings performed by either party and by

the tribunal, as well as copies of technical and legal opinions and any other
relevant facts for the understanding, development or outcome of the dispute
shall be submitted to the entity entrusted with the monitoring of the arbitral
process.

ARTICLE 21

(Guarantee Fund)

1. Financial execution of public-private partnerships is guaranteed by a special

public fund designated Guarantee Fund for Public-Private Partnerships
(FGPPP), to be set up by the Executive, whose purpose is to attend to
eventual pecuniary obligations assumed by the State under public-private
partnerships which, for matters or facts of extraordinary economic nature,
cannot be attended to by specific resources allocated by the State in
implementing a specific public-private partnership.

2. The process for designing, structuring, and implementing the Guarantee Fund
for Public-Private Partnerships (FGPPP) shall be conducted by the Ministry of
Finance.

3. Following the establishment of the Guarantee Fund for Public-Private

Partnerships (FGPPP), and while the fund is operating regularly, the Ministry
of Finance shall notify CMAPPP on available assets and the eventual
disbursements made by the Fund.

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 CHAPTER IV

Final Provisions

ARTICLE 22

(External Consultants)

1. Without prejudice to the observance of the legal system relating to the

realization of public expenditures, the decision to hire consultants in order to
provide support in the framework of public-private partnerships shall identify
and include:

a) Crystal clear reasons behind this recruitment and the corresponding

delimitation, in clear and precise terms, of the external consultant’s
scope of intervention;

b) The costs to the public partner or the State, predictably arising from
this recruitment and its budget appropriations;

c) The procedure to be adopted in selecting the external consultants,

pursuant to the law.

2. Any external consultant providing consultancy services to the public partner in

the preparation, evaluation, monitoring, renegotiation, or any other
intervention regarding a specific public-private partnership and who, as such,
has access to information not made available to the public, shall be prevented
from providing such services to the private partner or any other entity
appearing as a competitor under this partnership.

3. Failure to comply with the foregoing will result in the exclusion of the
competitor from any procedure aiming the adjudication of the partnership or
the cessation thereof, for reasons attributable to the private partner, without
prejudice to the compensation the public partner may be entitled to under
the applicable legal and contractual terms.

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 ARTICLE 23

(Updating monetary sums)

Unless otherwise provided for, all monetary sums expressed in local currency
herein shall be updated, annually, in accordance with the value of Tax Correction
Unit approved of by the Minister of Finance.

ARTICLE 24

(Immediate application)

This law shall apply to:

a) All public-private partnerships, which so far, have not been subject of

an authorizing dispatch by the Holder of the Executive Power;

b) Renegotiations, which are provided for in the contract or agreed upon

by the parties regarding already existing partnerships within the limits
of legally, permitted negotiating availability.

ARTICLE 25

(Regulation)

This law shall be regulated within sixty (60) days.

ARTICLE 26

(Entry into force)

This law shall come into force sixty (60) days after the date of publication thereof.

ARTICLE 27

(Doubts and omissions)

All doubts and omissions arising from the application and interpretation of this law shall
be resolved by the National Assembly.

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Seen and approved of by the National Assembly, in Luanda, this 18 November 2010

The Speaker of the National Assembly, Antonio Paulo Kassoma

Proclaimed on 20 December 2010

To be published,

The President of the Republic, JOSÉ EDUARDO DOS SANTOS.

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