Country Economic and Political Summaries
September 2011 Edition
INTERNATIONAL DEPARTMENT
INTERNAL USE ONLY
BY PEOPLE FOR PEOPLE
Summary (1/3)
I -NORTH AMERICA
Canada
Mexico
United States
II –CENTRAL AMERICA & CARIBBEAN
Costa Rica
Panama
Trinidad & Tobago
III -SOUTH AMERICA
Argentina
Brazil
Chile
Colombia
Peru
IV -WESTERN EUROPE
Austria
Germany
Greece
Italy
The Netherlands
Norway
Portugal
Spain
United Kingdom
Summary (2/3)
V-CENTRAL & EASTERN EUROPE
Czech Republic
Hungary
Poland
Romania
Slovakia
VI-EURASIA
Azerbaijan
Kazakhstan
Russia
Turkey
Turkmenistan
Ukraine
Summary (3/3)
VII-ASIA-PACIFIC
Australia
China
Hong-Kong
India
Indonesia
Japan
Laos
Malaysia
Pakistan
Philippines
Singapore
South Korea
Thailand
Vietnam
VIII-AFRICA & MIDDLE EAST
Algeria
Bahrain
Cameroon
Egypt
Iraq
Jordan
Kuwait
Lebanon
Libya
Morocco
Oman
Qatar
SaudiArabia
South Africa
Syria
Tunisia
United ArabEmirates
Yemen
Last update: Sept. 2011
CANADA
POLITICAL BACKGROUND
Type of government: Federal parliamentary democracy within a constitutional monarchy
Prime Minister: Stephen Harper (conservative)
Elected in: May 2011
Next poll: May 2016
Key Minister: Minister of Natural Resources : Joe Oliver
Minister of Environment : Peter Kent
Parliament: Bicameral Congress: Senate: 105 seats ; House of commons: 308 seats
Elected in: May 2011
Next poll: May 2016
COUNTRY RISK
Standard & Poor's
Moody's
Extremely strong capacity to meet financial
commitments. Highest Rating.
Exceptional economic, financial and institutional
strengths resulting in unquestioned access to
finance.
AAA
Aaa
The steady political and economic environment
has positive effects on an already good payment
record of companies. Very weak default
probability.
A1
COFACE
SECURITY RISK
Control Risks 2009
B
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
L
Low
Financial
Business
Canada
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2012)
Population (Million)
Nominal GDP (Bn USD)
34 Urban population (2015 p)
1 577 HDI ranking
84%
8/182
Exchange rate (CAD/USD): 0,99 (09/2011)
*The weakening US economy and falling commodity prices have transformed the outlook for Canada’s economy. Even though Canada is
on more solid economic ground it will not be unscathed. Real GDP growth is expected to slow to 2.1% in 2011.
*On the fiscal side, the ruling Conservatives are reluctant for the time being to consider new stimulus measures and continue to
emphasise their pledge to eliminate the federal budget deficit by 2015. The Bank of Canada (BOC, the central bank) will delay further
monetary tightening until the second quarter of next year.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
4
3
3,2
3
2,1
2,9
2
1
2,8
1,9
1,9
1,6
2,7
2,0
2
1,8
0
-1
2009
2010 f
2011 f
-4
1,6
1
-2
-3
1,7
2012 f
-2,8
0,4
-3,9
0
-5
0,3
2009
Canada
OECD
2010 f
2011 f
Canada
Current Account Balance (% of GDP)
2012 f
OECD
Interest rates (%)
4
0
2009
-0,5
2010 f
2011 f
2012 f
-0,6
-0,5
3
-0,7
-1
3,5
-0,8
2,5
-1,5
2
-2,5
-3
Short-term interest rate
1,5
-2
Long-term interest rate
1
-3,1
-3,0
-2,8
-3,1
0
-3,5
Canada
0,5
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
OECD
Fiscal balance (% of GDP)
2009
2010 f
2011 f
Public debt (% GDP)
2012 f
0
90
-1
-2
-3
-3,2
-4
-5
84
-4,5
-4,9
-6
-5,6
83,1
83,1
2011 f
2012 f
-5,9
-7
-7,0
-8
-9
83,3
-4,7
-8,0
80
Canada
OECD
2009
2010 f
Last update: Sept. 2011
POLITICAL OUTLOOK
*The federal election held in May resulted in Canada's first majority government for seven years, with the Conservatives now holding 166
of the 308 seats in the House of Commons. The government's new-found majority status should lead to a more stable political
environment and easier passage of legislation. More impressive was the stunning performance of the New Democrat Party in the
elections. The NDP led by Jack Layton, its charismatic leader, became the official opposition.
Then the loss of Jack Layton, diagnosed with cancer, shocked the party and internal tensions within it became apparent. The
inexperience of its new MP’s and accusations of harbouring separatist sympathies have weakened the newly established opposition.
Without a strong opposition the prime minister, Stephen Harper, could have free rein to pursue his pro-business agenda including
corporate tax cuts.
*Canada has come a step closer to realising a key objective in relations with the US, namely, the go-ahead for the construction of a 2,700km pipeline linking the Alberta oil sands to the US Gulf coast, this project is an important element in ensuring a market for output from the
oil sands. Despite strong environmental protests the administration of Barack Obama appears to be taking the view that environmental
concerns are a lesser priority for the moment than the project's job-creation benefits and the attractions of Canada as a politically stable
and reliable energy supplier.
ENERGY OUTLOOK
Nuclear
10%
Biomass
1%
Electricity matrix
Coal
17%
Hydro
59%
Gas
11%
Wind & Geo.
2%
Electricity (Source: Enerdata)
Capacity (2008)
124 GW
Production (2008)
633 TWh
Consumption (2008)
531 TWh
Natural gas (Source: Enerdata)
Proven reserves (2008)
1400 Gm3
Production (2008)
176 Gm3
Consumption (2008)
88 Gm3
Electricity
* Electric sector has different types of regulation depending on the provinces. Each regulatory authority is independent and creates its
own framework.
* Hydro-Québec is the largest electricity generation company in the whole Canada. It has 3.6 million clients and sold yearly 200 TWh.
* Canada is the fifth largest energy producer in the world after USA, Russia, China and Saudi Arabia. It also exports electricity to USA
(28.8 TWh net).
* Nuclear power represents 14 CANDU type reactors located in 5 power plants: Bruce B (3470 MW), Darlington (3520 MW) and Pickering
B (2060 MW) in Ontario; Point Lepreau (635 MW) in New Brunswick and Gentilly 2 (640 MW) in Québec.
* Energy cost in Canada is twice less than in European countries: 7.6 US cents/KWh for residential and 5.3 US cents/KWh for industrial
use.
*A huge potential of the wind power is estimated to 28 GW. At the end of 2005, Canada a park of the wind power plants of 590,14 MW
(13th in the world), particularly in Alberta and Québec. The annual growth of this sector has been 30% for the last 5 years. About 3 GW of
capacity is being constructed.
* Canada, with more lakes and rivers than any other country, has about 60% of its output coming from hydroelectric facilities. Quebec’s
La Grande plant is one of the world’s largest hydroelectric facilities, with an installed capacity of 15,000 MW.
* Canada is willing to develop new nuclear power facilities as 25 GW of new nuclear power are expected to be constructed to 2020.
* The electricity networks of Canada and the United States are highly integrated. In 2007, Canada exported 50.1 TWh of electricity to the
United States while importing 19.6 TWh. Over the past ten years, Canadian imports of electricity from the U.S. have increased by over
150 percent, while exports have remained relatively constant. A bilateral commission is planning the formation of the North American
Electric Reliability Organization, an intergovernmental organization that would monitor network reliability, settle trans-border disputes, and
formulate common industry standards.
Gas
* Canada is the third producer of natural gas in the world after Russia and United-States. Since 2006 the production has been slowly
decreasing. North American gas prices have come down due to the discovering of unconventional gas sources (shale gas) in Canada
and USA.
* Last year Canada exported 88 Gm3 of natural gas, mainly to USA.
* Canada's natural gas reserves are located offshore the East-Coast near Nova Scottia and Terre-Neuve. Currently the West Coast fields
are running out and the country's production would probably in the next years change from West Coast to East Coast
* Canada is also looking for the development of unconventional gas production (shale gas) in British Columbia. Canada has also engaged
a diplomatic struggle with Russia for the exploitation of the Artic's natural gas reserves.
* Canada’s natural gas production is concentrated in the WCSB (Western Canadian Sedimentary Basin), particularly in Alberta. It is
estimated that conventional natural gas production in the WCSB has reached its zenith. Future natural gas production in the WCSB could
center in coal bed methane (CBM) deposits.
ENVIRONMENT OUTLOOK
Water (Source: Institut Statistique du Canada 2007)
Access to drinking water (%)
81,9
Access to sanitation (%)
79
Waste
(Source: OCDE 2006)
Mun waste generation per capita
Municipal waste generation
400 kg/year
12,98 Mt/year
* In the waste sector, municipalities, provinces and federal government have adopted the "3R policy": Reduction, Reuse, Recycling.
* The water treatment responsibility is divided between federal, provincial and municipal authorities.
Last update: September 2011
MEXICO
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Felipe Calderón (Partido Acción Nacional - right)
Elected in: July 2006
Next poll: July 2012
Key Ministers: Minister of Energy: José Antonio Meade
Minister of Environment: Juan Rafael Elvira Quesada
Parliament: Bicameral Congress: Senate: 128 seats ; Chamber of deputies: 500 seats
Elected in: July 2009
Elected in: July 2009
Next poll in July 2012
Next poll in July 2012
COUNTRY RISK
Standard & Poor's
Moody's
Adequate capacity to meet financial commitments,
but more subject to adverse economic conditions.
government would have the capacity to sustain a
coherent economic policy framework and avoid
any near-term debt repayment problems if
confronted with a severe shock to public finances.
The political and economic outlook and a relatively
volatile business environment can affect corporate
payment behaviour. Corporate default probability
is still acceptable on average.
BBB
Baa1
A4
COFACE
SECURITY RISK
Control Risks 2010
B
M
Country vs. World Median (Global Insight)
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Medium (High along US Border)
Financial
Business
Mexico
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
113 Urban population
77.8%
Exchange rate (MXN/USD): 12.8 (09/2011)
Nominal GDP (Bn USD)
1 035 HDI ranking
56/169
*The main focus of economic policy in the past months has been on moves to bolster the domestic economy in order to alleviate the
negative impact of a deteriorating global economic outlook. And given the proximity of the presidential and congressional elections in July
2012, Mexico is seeking to boost domestic demand in an attempt to prevent a renewed deceleration. Real GDP growth slowed to 3.3% in
the second quarter of 2011.
*In the energy sector, the first private sector contracts were awarded to two British and Mexican companies. The winning companies will
be allowed to exploit three mature fields in the southern region with rights to drill in the Santuario, Magallanes and Carrizo areas, in the
state of Tabasco. They will essentially act as service providers. Pemex (national oil company) expects that these companies will provide
greater efficiency and leading-edge technology, and it will retain ownership of all production and private companies will have no
commercial interest in the sale or marketing of the oil.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
8
6
6
4,3
5
5,4
4
2
2,5
2,9
1,9
1,6
0
-2
-4
4,2
3
3,9
3,5
2
-3,9
-6,1
1,6
2,7
1,7
1
-6
-8
0
2009
5,3
4
2010
Mexico
2011f
2012f
0,4
2009
OECD
Current Account Balance (% of GDP)
2010
Mexico
2011f
2012f
OECD
Interest rates (%)
0,5
8
7
0
2009
2010
-0,5
-0,7
-0,5
-0,5
2011f
-0,6
-0,7
-1
2012f
-0,8
-1,0
6
5
4
-1,5
-1,4
3
2
-2
1
-2,5
Short-term interest rate
0
Mexico
OECD
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011f
24
-1
-0,4
-0,9
-2
22,6
-2,8
-3,3
-4
22
-5
21,9
-4,7
-6
21,1
21
2010
2011f
-5,9
-7
-7,0
-8
-9
External debt (% GDP)
2012f
0
-3
Policy Rate
-8,0
20
Mexico
OECD
2009
2012f
Last update: September 2011
POLITICAL OUTLOOK
*The coming election in November in the Michoacan state (one of Mexico's most dangerous states) will be the last before the 2012
Presedential elections which the opposition is favourite to win. The President’s sister, Luisa María Calderón, is a candidate for governor.
She is accused of running at the president’s behest.
*The US has in recent weeks been engaged in expanding its role in Mexico’s campaign against drug-trafficking organizations,
implementing a small physical presence in Mexico. These developments caused an uproar within the opposition parties , with some
members of the PRD party accusing the president, Felipe Calderón, of surrendering control of the war on drugs to the US. Some voices
denounced the violation of national sovereignty and demanded the expulsion of US agents.
The interior minister, Francisco Blake Mora stressed that US agents are not authorised to perform tasks that are the remit of the Mexican
government and that their presence was in conformity with the country’s constitutional framework and with international agreements on
security signed by Mexico.
*The bilateral relationship with the US, the dominant trade and investment partner will remain the overriding foreign policy focus. On
immigration issues, the US Congress is unlikely to advance on a bill to reform the US immigration policy to legalize undocumented
Mexican workers.
ENERGY OUTLOOK
Wind & Geo
2%
Electricity matrix
(Installed Capacity)
in 2008
Hydro
22%
Nuclear
3%
Electricity (Source: CFE as of Sep 2010)
Capacity (Sep 2010)
51,57 GW
Production (Sep 2010)
181,68 TWh
Consumption (2010F)
(2008)
215,5 TWh
Oil &
Gas (+40%)
68%
Coal
9%
Natural gas (Source: PEMEX as of Jan 2010)
Proven reserves (2010)
16 815 MMCF
Production (2010)
7,02 MMCFD
Consumption (2010)
7,70 MMCFD
Electricity
*From 2011 to 2024, the Federal Electricity Commission (CFE) expects to remove 10,315 MW of capacity from its system due to
inefficiencies mostly related with the age of some of its plants. CFE estimates that 37,615 MW of additional capacity will required by 2024.
Approximately 5,520 MW are currently under construction or tender process, so new net capacity additions by 2024 amount to 32,095
MW. Total investment required amounts to US$ 91.8 billion. Approximately 40% of this new capacity (13,126 MW) will be natural gas
fueled projects, tendered under the IPP scheme.
* Several foreign electricity companies are active in Mexico. The most important is Iberdrola with a 5 GW installed capacity, followed by
Mitsui.
* Mexico has an active electricity trade with the United States and is a net exporter of electricity. Many companies have built power plants
near the U.S.-Mexico border with the aim of exporting all generation to the United States. National electricty network is interconnected with
USA networks ERCOT and WSCC and with Central American SIEPAC (Panama, Nicaragua, Costa Rica, Honduras, Salvador and
Guatemala).
Gas
* The predicted increase of demand in gas (2.4% yearly to 2024) would lead to a whole number of investments in the E&P sector.
* State-owned Pemex holds a monopoly on natural gas exploration and production in Mexico. There is some private participation via
service contracts, mainly in the Burgos Basin (Natural Gas). In March 2011, PEMEX released the tender for E&P activities in three
marginal fields. The novelty of the contracts is that they include a fee per barrel payment. Future rounds of contracts will include deep
water fields.
* Since 1995 the gas transportation, storage and distribution are no more state monopolies and open to competition. Private international
operators like GDF SUEZ and Gas Natural are the most important players in this sector.
* Mexico’s natural gas sector offers great opportunities and areas for improvement. The current National Pipeline System, owned by
PEMEX is working at 98% of its capacity so additional transportation infrastructure and redundancy in the system is urgently needed.
Considering the investment requirements of the energy sector as a whole, private participation will be essential to meet these needs.
* Mexico currently has three LNG terminals: Altamira, Ensenada and Manzanillo.
ENVIRONMENT OUTLOOK
Water (Source: SUEZ Environnement 2009)
Access to drinking water (%)
91
Access to waste water collection (%)
86
Access to sanitation (%)
40,5
* Water scarcity indexes are increasing within the north and center of the country where economical development is taking place.
Direct non-potable reuse is being used to increase water availability. Some cities started planning indirect potable reuse projects.
Tropical utilitiesin the south observe most condition. Most water treatment and waste water treatment facilities over US$15 million are
* Water areas are generally in deficitary of the water availability.
funded by the federal government and Private sector investments. Waste water collection rates are above 70% but les than 45% is
treated. Water utilities inefficiencies (physical and commercial losses) estimated around 40% in average.
Last update: September 2011
UNITED STATES OF AMERICA
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Barack Obama (Democrat Party)
Elected in: November 2008
Next poll: November 2012
Key Ministers: Secretary of Energy: Steven Chu
Parliament: Bicameral Congress: Senate: 100 seats ; House of representatives: 435 seats
Elected in: November 2010
Next election in November 2012
COUNTRY RISK
Standard & Poor's
Moody's
Aaa
COFACE
A2
SECURITY RISK
B
Control Risks 2010
Very strong capacity to meet financial
commitments.
Exceptional economic, financial and institutional
strengths resulting in unquestioned access to
finance.
Even if the business environment can have some
deficiencies, the default probability remains weak.
AA+
L
Country vs. World Median
(Five-year risk aggregates)
40
30
20
10
0
Low
Overall
Financial
United States
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
USD/EUR: 1.36 (09/2011)
310.8 Urban population (2015 f)
14 527 HDI ranking
82,3%
4/169
*Forecasts indicate a decreasing GDP growth rate in the United States from 3.0% in 2010 to 1.6% in 2011 and growth is expected to remain weak at
1.9% in 2012. Unemployment is stuck at a high 9.1% rate, the economy created no new jobs on a net basis in August.
The US recorded its lowest trade deficit in three months in July as exports recovered and imports fell as the US spent less on industrial supplies,
particularly crude oil. But Export growth, which supported economic expansion in the US in 2010 and earlier in 2011, will weaken owing to a slowdown
in the global economy and a rise in average oil prices.
*Under pressure to respond to an increasingly distressed economy, Barack Obama unveiled the American Jobs Act, a set of new stimulus measures
aiming at supporting job creation and economic growth at a cost estimate of US$447bn. At the backbone of the administration's proposals are
increases and extensions in payroll tax cuts, tax credits to businesses that hire the long-term unemployed and infrastructure spending targeting
schools, roads and railways modernization. A national infrastructure bank will also be created.
* The president emerged as the loser from the bruising debate with Republicans over lifting the US's debt ceiling. A last-minute political deal
prevented the government from defaulting on its debt, but the process reinforced disappointment among Democrats over Mr Obama's performance.
Adding to the president’s challenges in managing the worsening economic situation, the
decision in early August by Standard & Poor's to remove the US's triple-A credit rating for the first time has heightened uncertainty, sending
shockwaves across financial markets.
Real GDP Growth (%) change from a year earlier
4
CPI Inflation (%) change from a year earlier
4
2,9
3
1
3,2
1,9
1,6
3,0
2
3
1,8
1,5
1,6
2
0
2,7
1,7
1,6
-1
1,6
1
-2
0,4
-3
-3,9
-4
-3,5
0
-0,3
-1
-5
2009
2010
USA
2011f
2009
2012f
OECD
Current Account Balance (% of GDP)
1
1
0
-1
-1
-2
-2
-3
-3
-4
2011f
2012f
OECD
Interest rates (%)
4
3,5
-0,5
-0,7
-0,6
-0,8
3
2,5
Short-term interest rate
2
Long-term interest rate
1,5
-2,7
1
-2,7
-3,1
-3,2
2009
2010
0,5
2011f
USA
2012f
0
OECD
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
-11
-12
2010
USA
2010
2011f
Public debt (% GDP)
2012f
120
100
93,6
101,1
106,9
84,3
80
-4,7
60
-5,9
-6,7
-7,0
-8,0
-8,8
-8,3
40
20
0
-10,6
USA
OECD
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
*The polarised nature of the US political system has been on display as seldom before in recent weeks as Mr Obama and members of Congress have
fought over an increase in the federal government's debt limit. Republicans have hinted that they will look to adopt an uncompromising strategy in
future debates.
*Mr Obama’s hopes of winning a second term as president in the November 2012 elections have suffered a severe setback in recent weeks. The
economy is stalling and his leadership skills are being questioned.
The Republican race has tightened to three major contestants, with Rick Perry as the new front-runner. Each has serious shortcomings that may yet
propel others to the fore, or even encourage newcomers to enter the race.
*On foreign policy, the downfall of the Libyan dictator, Colonel Muammar Qadhafi, represents a major accomplishment for Mr Obama.
The daring special forces raid that killed Osama bin Laden in Pakistan in May 2011 has flared tensions with Pakistan. Nonetheless, the mutual
necessity of the relationship will continue to tie the two countries together.
In Afghanistan, the US has withdrawn the first of 10,000 troops that will leave the country by the end of 2011; a further 23,000 will be withdrawn by
late 2012. The move, which was announced by Mr Obama in June, fulfils Mr Obama's earlier promises to begin withdrawing troops, but it also reflects
a growing degree of war-weariness among the electorate.
ENERGY OUTLOOK
Nuclear
10%
Oil
Wind & Geo 6%
3%
Biomass
1%
Hydro
9%
Electricity matrix
(Installed capacity)
in 2009
Gas
41%
Coal
31%
Electricity (Source: DOE)
Capacity (2009)
1 122 GW
Production (2009)
3 950 TWh
Consumption (2009)
3 575 TWh
Natural gas (Source: DOE)
Proved reserves (2009)
8 039 Gm3
Production (2010)
611 Gm3
Consumption (2010)
683 Gm3
Electricity
* Decentralised and partially fragmented, American electricity industry is highly diversified. The players are different and numerous: 3,200
public companies, plus 4,200 independant producers, 400 electricity selling companies.
* There are three regional interconnected networks for electricity transportation : Eastern Interconnect, Western Interconnect, Texas
Interconnect. IPR GDF SUEZ has significant power generation facilities in the Eastern and Texas interconnects.
* The US is the world's largest energy producer, consumer and net importer. It also ranks eleventh worldwide in reserves of oil, sixth in
reserves of natural gas, and first in coal. The US is the first nuclear producer in the world. Its installed capacity of 24GW could reach
64GW in 2030 according to EPRI (Electric Power Research Institute), and 30 reactors are under development.
* 18 States have already adopted objectives for the development of renewable energies' facilities. For example the Californian Solar
initiatives, intented to implement additional solar power in California.
* B. Obama recently announced the restarting of the nuclear development plan to face the increase of the demand and the will of
reducing energy dependency with 8 nuclear power plants planned. The first one will be constructed in Georgia
* The American Recovery and Reinvestment Act (ARRA) includes a package to finance some improvements on the energy sector
including smartgrids, energy efficency and renewables development. Smartgrids, demand response and energy efficiency could impact
long-term energy demand growth rates.
* Beginning January 2011, the EPA will now work with local permitting authorities to identify and implement the most efficient control
technologies to minimize GHGs on new and expanded plants.
Gas
* The US is the world’s largest consumer and second-largest producer of natural gas, which is the fastest growing fuel. More than 90% of
the power plants to be built in the next 20 years will likely be fueled by gas. It is also likely to be a primary fuel for distributed power
generators – mini-power plants that would be sited close to where the electricity is needed.
* Gas production peaked in 2010, its highest level since 1973.
* Non-conventional gas (tight gas, coalbed methane, and shale gas) represents more than 50% of the total production. The quick
progression of shale gas is changing deeply the gas market structure and is expected to grow steadily in the coming decades.
* The US has imported 92 Gm3 of natural gas (mainly from Canada) in 2010 and 12 Gm3 of LNG (mainly from Trinidad & Tobago).
* Because of the fast development of shale gas and the significant price gap between gas prices in the U.S. and in Asia and Europe, there
have been proposals to convert LNG regasification terminals into LNG liquefaction facilities, e.g. the Sabine Pass and Freeport terminals
in the Gulf of Mexico.
ENVIRONMENT OUTLOOK
Water (Source: EPA 2009)
Waste
(Source: EPA 2008)
Access to drinking water (%)
100
Municipal generation p. capita
4.5 Mt/year
Access to sanitation (%)
100
Municipal waste generation
249.6 Mt/year
* State regulators are more open to innovative mechanisms with the view to attract capital resources to renew aging infrastructures
(looking-forward regulation, surcharge mechanisms,…)
* Under current administration, EPA (Environmental Protection Agency) is more and more stringent on regulations
* USA water supply is a very fragmented market (52,000 water and 16,000 waste water systems) still mainly government-owned
(respectively 84% for water and 98% for waste water) andinhabitants) have small systems (56% of water systems 90’s among the500 10
* Private investor-owned large systems (above 10,000 with a majority of almost all been consolidated in the serve less than top
players.
* Much of USA public wastewater system infrastructure has crossed the quarter-century mark, dating back to the Clean Water Act
construction grant funding of the 1970s.
* The waste treatment sector is characterized by increased consolidation and regionalisation.
Last update: September 2011
COSTA RICA
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Laura Chinchilla (Partido Liberación Nacional - Center)
Elected in: February 2010
Next poll: February 2014
Key Ministers: Minister of Energy and Environment: René Castro
Parliament: Unicameral assembly of 57 members
Elected in: February 2010
Next poll in February 2014
COUNTRY RISK
Standard & Poor's
Moody's
Less vulnerable in the near-term but faces major
ongoing uncertainties to adverse economic
conditions.
The government would have the capacity to
sustain a coherent economic policy framework and
avoid any near-term debt repayment problems
The volatility of the business environment coupled
to the necessity to raise an efficient fiscal policy is
likely to affect payment behavior.
BB
Baa3
A4
COFACE
SECURITY RISK
Control Risks 2010
Country vs. World Median (Global Insight)
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
B
L
Overall
Low (Medium at the Nicaraguan Border)
Financial
Costa Rica
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
4,7 Urban population
64.3%
Exchange rate (CRC/USD): 509.70 (09/2011)
Nominal GDP (Bn USD)
36 HDI ranking
62/169
* Some deceleration expected for 2011. The authorities had little room for maneuver to stimulate the economy with fiscal policies.
Fortunately, inflation rapidly fell in early 2010 as domestic demand shrank and relatively lower commodity prices were passed to local
consumers, giving the central bank some comfort to cut interest rates. The economy is still at the mercy of external conditions. Preliminary
results from the 2010 National Household Survey were released at the end of November, showing an improvement in the unemployment
rate but also a slight increase in poverty.
* Costa Rica’s trade balance has historically shown large deficits, fueled by higher imports of oil. The authorities have successfully
approached multilateral organizations in order to secure financing.
* Tax reform is set to be a major legislative priority in 2011, with the debate centring on a new corporate tax, as well as Ms Chinchilla’s
long-delayed fiscal reform. The weakness in public finances was put in evidence again in 2010 with a large budget deficit, forcing the
authorities to place new debt in local markets to cover a considerable portion of its current expenditures. Some advances are expected in
the coming years as the administration pursues a new fiscal reform.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
7
9
5,8
6
8
5
4,0
3,9
3
4,2
7
3,6
4
6
3,7
2
5,8
5,7
5,2
3
-1,3
2
-1,8
-2
1
-3
0
2009
2010
Costa Rica
2011f
2012f
2009
Latin Am and Caribbean
2010
Costa Rica
Current Account Balance (% of GDP)
2011f
2012f
Latin Am. and Caribbean
Interest rates (%)
18
2
16
0
-0,4
-2
-1,1
-0,9
-0,9
14
12
-2,0
-4
-2,6
-2,8
-3,6
10
-6
8
-8
6
-10
4
-12
2
2009
2010
Costa Rica
2011f
2012f
Short-term interest rate
2010
Latin Am and Caribbean
2011f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012f
0
30
-1
25
-2
-1,5
-1,6
-3
-2,7
-2,7
-3,4
-3,5
-3,8
Policy Rate
0
Fiscal balance (% of GDP)
2009
27,6
23,9
21,6
20,9
20
15
10
5
-5
-6
6,1
6,4
4
0
-4
6,5
6,0
5
1
-1
7,8
-5,3
Costa Rica
0
Latin Am and Caribbean
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
* Laura Chinchilla, the new elected President on 7 february, does not have majority in Congress (24 out of 57 votes), where the right-wing
Libertarian Movement (ML) has increased its presence. Nevertheless, that will impulse Chinchilla's liberalisation projects which are
supported by the ML. Nevertheless she has to rely on ad hoc alliances and to progess slowly in her reform agenda.
* Mexican drug cartels are increasingly using Costa Rica as a trafficking hub for South American cocaine going to the United States.
Chinchilla came to power with a strong anti-crime agenda which will increase the security budget in order to improve security outlook. The
border dispute between Costa Rica and Nicaragua remains far from concluded, despite strenuous diplomatic efforts by the Costa Rican
government to obtain international support. The dispute began after a dredging operation in the San Juan river led to an armed incursion
by Nicaraguan troops in previously undisputed Costa Rican territory.
* Following Arias' priority during his last months in office which were based on the liberalisation of the telecommunications sector as part of
the compromises under which the country entered the Central American Free Trade Agreement with the United States, Chinchilla
announced further liberalisations. Electricity sector seems to be the next step.
ENERGY OUTLOOK
Electricity
(Source: ICE)
Capacity (January 2011)
Production (2010)
Consumption (2009)
Wind
4%
Thermal
33%
Hydro
56%
Electricity matrix
(Installed Capacity)
in 2011
2,7 GW
9,5 TWh
9,3 TWh
Natural gas
Proven reserves
Production
Consumption
Geo
12%
none Gm3
none Gm3
none Gm3
Electricity
* Until 1991, Costa Rica had an integrated state monopoly managed by Instituto Costarricense de Electricidad (ICE). Since then, Law
N°7200 authorized private generation through hydro and nonconventional plants (with a maximum capacity of 20 MW). These private
generators must have a 35% of national capital investors. The surplus generated by these plants is acquired by ICE. Energy´s purchase
price is determined by public tender and must be approved by Autoridad Reguladora de Servicios Públicos (ARESEP). ARESEP also
approves distribution tariffs for regulated sectors.
* Wind power might come to forefront in Costa Rica — GDF SUEZ has largest wind farm in the country (49.5 MW, in Guanacaste). 4
other wind farms in the Tilarán area of Guanacaste total 70 MW capacity. A further 30 MW or so under installation in two smaller wind
farms, one in Los Santos (east of San José), the other near Santa Ana (west of San José)
* Most of the installed capacity is still under state management: 82% (1951 MW) federal public sector (ICE & CNFL); 14% (322 MW)
private sector and 4% (91 MW) state regional companies.
* As a winner of the Presidential Elections, Ms Chinchilla committed to extend the development of Renewable Energy, both by ICE and
private participants. She has made specific references to the limitations faced by private firms in the generation market.
* Current existing Law-proposals should lift the limits on the participation of Private Investors and promote competition among Generators.
Currently draft General Electricity Law projects are being discussed in Congressional Commitees, with the objective of introducing more
investment and some competition in the Electricity Sector
Gas
There is no gas consumption, no production and there are no reserves of natural gas in
Costa Rica
ENVIRONMENT OUTLOOK
Water
(source WHO)
Access to drinking water (2008)
Access to sanitation (2008)
total
urban
97
95
100 %
95 %
Waste
(source Unstat 2002)
Muncipal waste collection (%)
Muncipal waste generation
73
1,28 Mt/year
* Approximately 99% of the urban population is connected to water supply (as compared to an average of 90% in the LatAm region), a
significant increase from 92% in 1990. Around 48% had urban sanitation connections to public sewerage or had individual septic tanks. In
2006 the Japanese Bank for International Development (JBIC) signed the Metropolitan San José Environment Improvement Project loan
to develop sewer plant, installation of sewage pipes, and consulting services.
* Rural coverage is lower, with about 92% of the 1.7 million rural inhabitants connected to public water supply and about 97% connected to
sanitation services, at least through the use of septic tanks.
Last update : September 2011
PANAMA
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Ricardo Martinelli (Cambio Democratico - right)
Elected in: May 2009
Next poll: May 2014
Key Ministers: Minister of Economy & finance: Alberto Vallarino
Parliament: Unicameral assembly of 71 members
Elected in: May 2009
Next poll in May 2014
COUNTRY RISK
Standard & Poor's
Moody's
Less vulnerable in the near-term but faces major
ongoing uncertainties to adverse business,
financial and economic conditions.
The government would have the capacity to
sustain a coherent economic policy framework
and avoid any near-term debt repayment
problems
The political and economic outlook and a relatively
BBBaa3
volatile business environment can affect corporate
payment behaviour. Corporate default probability
is still acceptable on average.
A4
COFACE
SECURITY RISK
B
Control Risks 2010
L
Low (medium in Colon, High in Darien)
Country vs. World Median (Global Insight)
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Financial
Panama
ECONOMIC OUTLOOK
Key indicators
Population (Million)
Nominal GDP (Bn USD)
3,5 Urban population
27 HDI ranking
74.8%
54/169
Business
Political
World Median
Exchange rate (PAB/USD): 1,0 (09/2011)
*The expansion of the Panama Canal, combined with several other large-scale capital investment projects, should insulate the domestic economy from
the risk of a renewed global economic deceleration. The extension will allow the transit of mega-container ships and other vessels currently too large to
transit the Canal, doubling the waterway’s existing capacity, and bringing in billions of dollars in revenues.
*The government is examining the possibility of establishing a sovereign wealth fund using revenue from the expanded Panama Canal, once the
expansion project is completed in 2014. The fund is expected to operate as an economic and social stabilisation fund, with returns on investments
available to finance fiscal deficits and repay public debt. The will be managed independently of the government in much the same way as the Autoridad
del Canal de Panamá (ACP). It is hoped that a stabilisation fund would help prevent deficits and consequent rises in the public debt stock.
*GDP growth is expected to reach 8.5% in 2011, led by fixed investment (owing to the ongoing Canal project), with government consumption also
expected to remain firm.. Domestic demand is also in a much stronger position than prior to 2008-09 (owing to lower unemployment and firm credit
growth), while stronger trading ties with Asia will also help sustain growth in exports.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
10
7
7,5
8
7,2
7,0
6
6,5
6,4
6,0
5
5,8
4
6
5,7
4
3,2
4,0
3,6
2
0
3
6,1
4,4
3,5
2,4
2
-2
1
-1,8
-4
0
2009
2010
2011f
2012f
Latin Am and Caribbean
Panama
2009
Current Account Balance (% of GDP)
2011f
2012f
Latin Am. and Caribbean
Interest rates (%)
2
3
1
2010
Panama
-0,2
-1
-0,4
-3
-0,9
-0,9
-1,1
Short-term interest rate
1,5
-5
1
-7
-9
-10,7
0,5
-11
-13
2009
2010
2011f
Panama
2009
2012f
0
Latin Am and Caribbean
Fiscal balance (% of GDP)
2010
2011f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012f
0
70
60
-1
-1,4
-1,6
-2
-1,6
43,7
-1,5
45,7
2010
2011f
49,3
40
30
-2,7
-3
-4
51,6
50
-1,1
-2,9
20
10
0
-3,8
Panama
Latin Am and Caribbean
2009
2012f
Last update: September 2011
POLITICAL OUTLOOK
*The ruling coalition—comprising the Cambio Democrático (CD, the party of the president, Ricardo Martinelli) and the Partido Panameñista (PP)—has
disintegrated, following Mr Martinelli's sacking of Juan Carlos Varela, the PP foreign minister.
*The dismissal of Mr Varela has led to the resignations of fellow PP cabinet members, the finance minister, Alberto Vallarino, and the housing minister,
Carlos Duboy, as well as six deputy ministers and a series of top officials in autonomous state entities. These officials have mainly been replaced by
senior CD legislators, but the post of foreign minister is still vacant. This is a serious blow to Mr Martinelli, this is the largest fall in a president's
popularity in the past 20 years. Mr Martinelli has backtracked in previous instances when the public has been opposed to particular policies, and it is
possible he may do so again.
*The free-trade agreement (FTA) between Panama and the US is yet to be ratified by the US Congress. Panama's approval of a tax informationexchange agreement (TIEA) with the US in April, which is likely to lead to a much tougher stance on banking secrecy, shows its stronger commitment
the exchange of tax information with other jurisdictions. Relations with Central America will be of secondary importance to boosting ties with larger
trading partners in Asia.
ENERGY OUTLOOK
Electricity (Source: CND)
Capacity (2010)
Production (2010)
Consumption (2010)
Hydro
44%
Electricity matrix
1,8 GW
7,1 TWh
6,6 TWh
Oil
48%
Natural gas (Source: OLADE)
Proven reserves (2009)
0,0 Gm3
Production (2009)
0,0 Gm3
Consumption (2009)
0,0 Gm3
(Installed Capacity)
in 2010
Electricity
* The former state electricty company IRHE (Institute of Hydric Resources and Electrification) has been divided in 8 companies (5 of
which are generators and 3 do distribution) which have all been privatised.
* The hydropower share in total electricity generation is going slighty down from 83% in 1990 to 55% in 2010.
* The electricity demand is growing (5 to 6% yearly) as investment in new capacities takes shape. For example, 700 MW of hydropower
will be added to Panama's installed capacity in the next four years. The plants' combined estimated investment is USD 2.38 billion.
Another 78 hydroelectric projects totaling 921 MW are under review.
* If the Panamanean market as such is comparatively small with the installed capacity of 1.8 GW, Panama could represent, thanks to the
plan of regional integration Sistema of Interconexión Eléctrica de los Países of América Central (SIEPAC), a front-door to the market of
Central America (7.8 GW).
* Government succeeded to reduce power tariffs by 10% from August 2009. The reduction was applied to residential and also to
commercial and industrial clients which account for 75% of all power demand in the country.
* Since August 2009 Panama is developping its wind power potential with the construction of the country's first wind farm in Tobare. So,
Fersia Energias Renovables is constructing a 225 MW installed capacity facility whose COD is expected for 2011.
* By the second half of 2011, a hydroelectric plant of 118 MW, built by a GDF SUEZ subsidiary near Chiriqui river will be at completion.
Gas
* At the moment, Panama does neither produce nor consume natural gas.
* A pipeline project linking Colombia and Venezuela has been under consideration for some time. If this project materialises, it could
bring natural gas to Panama, helping the country to diversify its energy mix.
* An important oil and gas network project is on going, operating by the CELA (Centro Energético de las Américas). This hub will be
located in the province of Colon in the Atlantic coast and linked by a 92 km trans isthmian pipe to the Pacific coast. It will count with 2
millions barrels per day refinery 1 billions cubic feet of LNG per day and terminal with a total storage capacity of 86 millions of barrel for
crude oil and refined products.
* Early 2011, Urriola announced a tender for oil development in Panama. In March of this year, officials expect to be ready to launch a
tender in the private sector for the first concession blocks for early exploration and development of the oil industry in Panama.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
urban
97
75
total
93
69
Waste
(Source: Unstat)
Municipal waste collection
Hazarsdous waste generated
0,379 (1998)
1,271 tonnes/year (2007)
* The ANSP, (National Authority for Public Services) acts as regulatory agency. Responsibility for water resources is vested in two
institutions: the National Environment Authority and the Panama Canal Authority. IDAAN (National water and sanitation company) is
responsible for water and sanitation services in urban areas with more than 1,500 inhabitants, thus preventing decentralization to
municipalities.
* The World Bank supports the sector through a US$32m loan for the Water Supply and Sanitation in Low-Income Communities Project
which is executed by the Ministry of Health. Moreover, the Interamerican Development Bank (IDB) supports the sector through various
projects essentially in Panama City and the bay of Panama.
* Despite a lack of statistical data about water quality and continuity of supply, potable water is perceived to be of good quality in Panama
and most users receive continuous service.
* Less than 20 % of collected wastewater is treated before being rejected in the sea and watercourses. The sewers of the capital pour
directly into the bay of Panama.
Last update: September 2011
TRINIDAD & TOBAGO
POLITICAL BACKGROUND
Type of government: Parliamentary
Prime Minister: Kamla Persad-Bissessar (United National Congress - Centre left)
Since May 2010
Key Ministers: Minister of Energy: Carolyn Seepersad-Bachan
Minister of Planning, Housing and Environment: Dr Roodal Moonilal
Parliament: Bicameral Congress: Senate: 31 seats ; House of representatives: 41 seats
Next poll in 2015
Elected in: November 2007
COUNTRY RISK
Standard & Poor's
Moody's
Baa1
COFACE
Investment grade. Strong capacity to meet
Country vs. World
financial commitments, but somewhat susceptible (Five-year risk aggregates)
to adverse economic conditions.
35
The government would have the capacity to
30
sustain a coherent economic policy framework and 25
avoid any near-term debt repayment problems
20
The business environment is characterized by
15
important volatility which could affect corporate
10
payment behaviour. Corporate default probability
5
is still acceptable on average.
A
A3
SECURITY RISK
Control Risks 2010
Median (Global Insight)
0
B
M
Overall
Medium (Low in Tobago)
Financial
Business
Trinidad And Tobago
Political
World Median
ECONOMIC OUTLOOK
Key indicators
Exchange rate (TTD/USD): 6.39 (09/2011)
Population (Million)
1,3 Urban population
13.9%
Nominal GDP (Bn USD)
20,7 HDI ranking
59/169
*Disappointing first-quarter results and the uncertain global outlook will encourage policymakers to address the persistent weakness of the
non-energy economy. Following the contraction in GDP in the first quarter of 2011 and the faltering recovery in the US, which will impact
negatively on energy exports, GDP growth is revised downward to 1.3% in 2011. Although, the current-account surplus is expected to
widen to 19.4% of GDP in 2011, supported by firm oil prices. The surplus will narrow in 2012 as oil prices ease and the import bill rises in
line with increased demand.
*In addition to emphasising the importance of social spending on healthcare, education and sanitation (which it regards as essential for
the long-term development of the economy and as a means of developing non-energy sectors), the People's Partnership (PP) coalition’s
administration has indicated that it will invest heavily in construction projects in order to jump-start activity in the sector.
*Trinidad and Tobago will succeed in attracting foreign direct investment (FDI) to the energy sector by developing downstream
petrochemical plants and local manufacturing. The government will adopt a cautious approach to natural-resources management, but,
given the importance of the energy sector to the economy, we expect most projects to go ahead.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
7
6
5,8
5
4,0
4
3,6
3,0
3
2,9
2
2,3
1
0
-1
-0,9
-2
-1,8
-3
2009
2010
Trinidad & Tobago
12
11
10
9
8
7
6
5
4
3
2
1
0
2011f
2012f
Latin Am and Caribbean
10,5
7,0
6,4
6,0
6,5
6,1
5,3
2,9
2009
2010
Trinidad & Tobago
Current Account Balance (% of GDP)
2011f
2012f
Latin Am. and Caribbean
Interest rates (%)
40
12
30
10
20
8
8,0
8,3
-1,1
-0,9
-0,9
2010
8,3
10
8,6
2011f
2012f
6
4
0
-0,4
2
-10
2009
Trinidad & Tobago
Short-term interest rate
Latin Am and Caribbean
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal Balance (% of GDP)
0,0
2009
0,0
2010
2011f
0,0
Policy Rate
0
External debt (% GDP)
0,0
2012f
16
0
-1
15,5
-1,6
-2
15,4
-1,5
15,3
15,2
-3
-2,7
15
-4
-3,8
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
*The prime minister Kamla Persad-Bissessar reshuffled her cabinet to reduce infighting within the ruling People's Partnership (PP)
coalition, providing needed political stability for the country.
*To tackle crime-related security problems, the government imposed a controversial state of emergency in August—which has just been
extended for three months—in order to curb the spike in crime and dismantle gangs. Confidence in the security forces and the criminal
justice system is at an all-time low. More substantial and sustained reductions in violent crime will require reform of the police and
judiciary, making immediate progress hard to achieve.
*Trinidad and Tobago will continue to focus on developing commercial ties with gas-importing countries, particularly the US. It will also
maintain friendly relations with Venezuela in view of their shared interests on crossborder oil and gas issues.
ENERGY OUTLOOK
Oil
0.3%
Electricity matrix
(Installed Capacity)
in 2009
Electricity (Source: OLADE)
Capacity (2009)
1,4 GW
Production (2009)
7,7 TWh
Consumption (2009)
7,7 TWh
Gas
99.7%
Natural gas (Source: OLADE)
Proven reserves (2009)
434 Gm3
Production (2009)
42,9 Gm3
Consumption (2009)
17,1 Gm3
Electricity
* Unlike many Caribbean states, Trinidad and Tobago has ample electricity generation and distribution capacity, although rapid growth in
demand results in occasional local-area supply interruptions.
*The state-owned Trinidad and Tobago Electricity Commission (TTEC) supplies electricity purchased from the majority state-owned
Power Generation Company of Trinidad and Tobago (Powergen) and from a private provider, Trinity Power.
* Powergen, the national electric company's production subsidiary, owns and manages 90% of the 1.4 GW installed capacity of the
country.
* Installed capacity is 100% thermal.
* The Regulated Industries Commission (RIC) recommends electricity tariffs based on estimates of the TTEC's costs and expected sales.
Tariffs remain among the lowest in the Caribbean because of continued government subsidies, despite increases in rates since 2006 to
take account of higher conversion and fuel costs at the TTEC.
Gas
* Since 1997 natural gas has become the motor of the whole Trinidadian economy, leading to a country's strong interest in the
development of an industry all along the value chain.
* The governement is willing to further reduce the country dependency to oil and have a 100% gas-based energy mix.
* Although several privatisations have been made, the hydrocarbons sector mainly remains in the hands of the State.
* Atlantic LNG of Trinidad & Tobago was formed in July 1995 to develop a liquefied natural gas (LNG) plant in the Caribbean. The venture
was created by local company National Gas of Trinidad & Tobago (NGC), with four international partners: BP, BritishGas (BG), Repsol
and Cabot (bought by GDF SUEZ).
* About half of the country's natural gas production is converted into liquefied natural gas (LNG) at the Atlantic LNG facility in Trinidad and
exported under long-term contracts and on the spot market.
* According to the Ministry of Energy, gas production could be multiplied by 3.5 to 2020.
* A new pipeline called NEO, actually under construction, will supply dometic market, electric plants and industries. Beginning of
operations planned for 2011.
ENVIRONMENT OUTLOOK
Water (Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
urban
total
98
92
94
92
Waste
(Source: Unstat)
Pop. Served by Muncipal waste collection (%)
90%
Muncipal waste collected
0,425 Mt/year
(1995)
(2002)
* The new government announced that environmental issues such as water sector and climate change would be part of top priorities.
* WASA (Water and Sewerage authority) is a state owned company producing 210 millions gallons of drinking water per day to 1.6 million consumers. Notably water
quality meets WHO standars. However, existing pipeline infrastructures are old and new pipes are being installed to modernized the network.
* In the sanitation sector, 30% (20 public and 10 private) of the population is connected to public sewerage systems; 58% use septic tanks and soakaways, while 10%
use pit latrines, and 2% have no coverage.
* A lot of hazardous waste is generated in Trinidad y Tobago due to its high rate of industrialisation and the oil and gas manufacturing sectors producing chemical
waste representing 77.7% of all hazardous waste produced. In 2003, the Hazardous waste generated amounted to 11.45Mt (Unstat).
Last update: September 2011
ARGENTINA
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Cristina Fernandez de Kirchner (Peronist party - center left)
Elected in: October 2007
Next poll: October 2011
Key Ministers: Secretary in charge of Energy: Daniel Cameron
Minister of Federal Planning: Julio De Vido
Parliament: Bicameral Congress: Senate: 72 seats ; Chamber of deputies: 257 seats
Elected in: June 2009
Next poll in October 2011, partially renewing the Parliament
COUNTRY RISK
Standard & Poor's
Moody's
C
COFACE
More vulnerable to adverse business, financial
and economic conditions but currently has the
capacity to meet financial commitments.
Speculative grade.Very low financial robustness.
A very uncertain political and economic outlook
and a business environment with many
troublesome weaknesses can have a significant
impact on corporate payment behaviour.
B
B3
SECURITY RISK
Control Risks 2010
B
L
Country vs. World Median
(Five-year risk aggregates)
60
50
40
30
20
10
0
Low
Overall
Financial
Argentina
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Exchange rate (ARS/USD): 4,21 (09/2011)
Population (Million)
40,4 Urban population
92,4%
Nominal GDP (Bn USD)
370 HDI ranking
46/169
*Forcasts indicate a strong growth rate in 2011 at 8,3%. The current economic policy mix will ensure that GDP growth remains firm in the
short term, but it is producing distortions that will dampen growth and heighten the risk of volatility in the medium term if left unaddressed.
*Fiscal and monetary policy is clearly expansionary and will remain so for the rest of this year, but this is exerting upward pressure on
inflation and wages, which is in turn eroding currency and wage competitiveness. Although, annual inflation remained stable at 9.7% in
July.
*The current-account surplus is deteriorating, which has for the past decade been a key pillar of economic stability, given the
government's limited access to international capital markets, use of the foreign reserves to repay its external debts and extreme
vulnerability to capital flight. The deteriorating balance-of-payments dynamics are in turn increasing speculation of peso adjustment as
early as 2012. The authorities are expected to attempt to access the international capital markets next year, for the first time since its
default a decade ago, in a move that would relieve pressure on the balance of payments and reduce speculation of a peso adjustment.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
10
14
9,2
8
10,7
12
6,0
12,1
6
10
5,8
4
8
4,0
2
10,5
3,6
3,6
0,9
0
6,4
6
6,0
6,3
6,5
6,1
4
-2
2
-1,8
-4
0
2009
2010
Argentina
2011f
2012f
Latin Am and Caribbean
2009
2010
Argentina
Current Account Balance (% of GDP)
2011f
2012f
Latin Am. and Caribbean
Interest rates (%)
4
18
3
16
3,6
14
2
12
1
10
1,4
0,7
0,8
0
-1
6
-0,4
2010
2011f
Argentina
2009
2012f
Short-term interest rate
2
2009
4
-0,9
-0,9
-1,1
-2
Long-term interest rate
0
Latin Am and Caribbean
Fiscal balance (% of GDP)
2010
2011f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012f
1
62
0,2
60,1
60
0
-1
8
58
-0,3
-0,6
56
-0,5
54
-2
-1,6
-2,7
-3
-1,5
53,3
52,3
52
50,2
50
48
46
-4
-3,8
44
Argentina
Latin Am and Caribbean
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
* Néstor Kirchner's death has left a vacuum in Argentine politics, leaving many political actors with unexpected opportunities. Governor of
Argentina's Buenos Aires province Scioli will now probably take over the presidency of the Justicialist Party, gaining ground ahead of next
year's polls. The period of relative calm that followed the death of Mr Kirchner ended abruptly with a surge in social unrest in December
2010, which has raised concerns Pension Bill: President Fernández lid on destabilising protests.
* President Vetoes Controversialover Ms Fernández’s ability to keep ade Kirchner has fought back after Congress had inflicted a bitter
legislative defeat when it approved a controversial bill fixing basic pensions to 82% of the monthly minimum wage. The government had
previously argued that it could not afford the bill, which it estimates would cost some US$10 billion next year alone. The episode could
cost Fernández even more as the country gears up for the presidential election in 2011 in which she is expected to run.
* China absorbs roughly 50% of Argentina's soy bean exports and cannot easily find a replacement source. Now, despite the
normalisation of commercial relations, Argentina will be wary of China's attitude in the future and will be sure to diversify its export basket
towards more reliable markets, such as India.
ENERGY OUTLOOK
Electricity (Source: CAMMESA)
Capacity (2010)
28,1 GW
Production (2010)
113 TWh
Consumption (2010)
111 TWh
Imports (2010)
2 TWh
Expo (2010)
0 TWh
Nuclear
4%
Coal
2%
Electricity matrix
Hydro
37%
Gas
55%
Natural gas
(installed capacity)
in 2010
Oil 2%
(Source: Energy Secretary, ENARGAS, and ECS)
Proven reserves (SE - 2009)
Production (SE - 2010)
Consumption (ENARGAS - 2010)
Imports from Bolivia (ENARGAS - 2010)
LNG imports (ECS -2010)
NG expo (ENARGAS -2010)
351,7
47,0
38,0
1,8
1,8
0,5
Gm3
Gm3
Gm3
Gm3
Gm3
Gm3
Electricity
* Argentina has the third-largest power market in Latin America. Installed electricity-generating capacity is mainly thermal and
hydroelectric, with nuclear making up the remainder. Electricity generation is a competitive market, but transmission and distribution are
regulated. However, state rising domesticthe generation segment hasenergy production has reportedly In any sporadic shortages of
* The imbalance between intervention in energy demand and falling been increasing in recent years. led to case, most of generation
electricity and natural gas and/or increasing imports (electricity, oil, LNG).
*Argentina has the highest specific electricity consumption level in Latin America after Chile and Venezuela: 2719 kWh/inh. in 2010.
* There are important differences in the electricty tariffs among the provinces. The residential medium tariff is 5.4 US cents / KWh and the
industrial one is 4.5 US cents / KWh (before taxes).
* The country has increased Yacyreta hydro plant production capacity according to its original design (from 76 to 83 meters over sea level)
allowing 19,7 GWh/year of energy generation.
* The country has decided to restart its nuclear program: Atucha II nuclear plant is likely to be finished by 2012 according to official
schedule. At the same time, Embalse nuclear plant is about to be modernized. Moreover, the country signed an agreement protocol with
Canada about the construction conditions of a new nuclear plant, Candu with a capacity of 740 MW. Other potential providers from
China, Korea, US, France and Russia also expresed interest for the project.
Gas
* Gas demand in Argentina is very sensitive to temperature. During 2004-2010 winters, industrial consumption has been limited by
transport capacity and gas availabilty. Argentina was a net exporter of natural gas until 2008, principally to Chile, but this exports have
been almost completely cut and at the same time and due to the local production decline and increased demand, imports from Bolivia
were restarted. Besides, in 2009 LNG imports had to be implemented in an urgent manner (at very high cost financed by the Government)
to avoid a catastrophic shortage of supply.
* In the regulated segments of the gas chain, transmission and distribution, tariffs remain frozen since 1999, which has placed some
companies in a serious financial situation. Expansions have been decided and financed by the State. Due to this situation, several foreign
shareholders have promoted international arbitrage actions against the Argentina Government. In the production segment, there is also a
heavy Government intervention: prices to residential clients remain almost unchanged since 2001 and prices to industry are been
progressively updated, but also under the Government guidelines and supervision.
* The Neuquen, Salta, Tierra del Fuego, and Santa Cruz regions contain most of Argentina’s natural gas production, with the Neuquen
region accounting for aproximately half of the country's total production. As is the case in the oil sector, Argentina has begun to look
towards its offshore basins as its traditional production centers have matured. Also, prospection and exploration of shale gas sources is
being developed and seems to offer good prospects.
* More than 80% of the production is made by 4 companies: Total, Repsol, Pan American and Petrobras.
ENVIRONMENT OUTLOOK
Water (Source: WHO 2006)
Access to drinking water (%)
rural
80%
urban
98%
Waste
Municipal waste collection (%)
Access to sanitation (%)
83%
92%
Municipal waste generation
Mt/year
* Concerning sanitation, existing sewage collection systems are insufficient to handle the increasing flows as a growing number of
households connect to the sewer systems, leading to frequent sewer overflows.
* Provinces have responsibility for setting rules and policies in the water sector for their area. Institutions are weak, subject to political
interference and lack enforcement powers. 14 out of 23 provinces have regulatory bodies, but they often have limited capacity and unclear
institutional responsibilities. In most cases, they act as supervisors of private concession contracts, not covering public and cooperative
service providers.
*The World Bank finances the Argentina National Urban Solid Waste Management Project (40 MUSD) aimed to improve overall health,
Last update: September 2011
BRAZIL
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Dilma Rousseff (Partido dos Trabalhadores, PT)
Elected in: October 2010
Next poll: October 2014
Key Ministers: Minister of Mines and Energy: Edison Lobão
Minister of Environment: Izabella Teixeira
Casa Civil Minister : Gleisi Hoffman
Parliament: Bicameral Congress: Senate: 81 seats ; Chamber of deputies: 513 seats
Elected in: October 2010
Next poll in October 2014
COUNTRY RISK
Standard & Poor's
Moody's
Considered lowest investment grade by market
participants.
The government would have the capacity to
sustain a coherent economic policy framework
and avoid any near-term debt repayment
problems if confronted with a severe shock to
public finances.
BBB-
Baa2
35
30
25
20
The political and economic outlook and a
relatively volatile business environment can affect
corporate payment behaviour. Corporate default
probability is still acceptable on average.
A3
COFACE
Country vs. World Median
(Five-year risk aggregates)
15
10
5
0
B
SECURITY RISK
Control Risks 2010
M
Overall
Medium
Financial
Brazil
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
195 Urban population (2015 f)
86.5%
Exchange rate (BRL/EUR): 1,66 (09/2011)
Nominal GDP (Bn USD)
2 087 HDI ranking
73/169
Brazil‟s economy, now the world‟s 7th largest, continued to decelerate in 2011 as industrial and agricultural activity moderated. This is due
to recent monetary tightening coupled to the weakening global economy. The strong Real will continue to hit manufacturing growth. Growth
is expected in 2011 to be 3.6% compared to 7.5% in 2010, with inflation in 2011 slightly above the BCB‟s central target of 4.5%.
Internal consumption policy has implied doubling loans to households and businesses in GDP terms since 2003.
A new industrial policy has been announced (the 4th one since 2003) in August, called “Brasil Maior” (Bigger Brazil) for local producers‟
eroded competitiveness, offering a blend of tax cuts, financing and trade-related measures, encourage more local production and job
creation, as manufacturing imports from China have surged. Brasil Maior is likely to be little more than a palliative for specific, favoured
sectors.
Brazil is well placed to mitigate any possible global downturn. It has a large cushion of international reserves (nearly US$350bn) and a wellcapitalised banking system.
The 2014 football World Cup and elections will lift GDP growth to 4.9% in 2013-14, before easing in 2015.
Real GDP Growth (%) change from a year earlier
8
7
6
5
4
3
2
1
0
-1
-2
CPI Inflation (%) change from a year earlier
9
7,5
8
5,8
4,0
4,1
7
6,5
6,1
6
3,6
3,6
6,5
6,4
6,0
5
4
-0,6
-1,8
5,0
4,9
4,7
3
2009
2010
2011f
2012f
Latin Am and Caribbean
Brazil
2009
Current Account Balance (% of GDP)
0,5
2010
Brazil
2011f
2012f
Latin Am. and Caribbean
Interest rates (%)
16
14
0
12
-0,5
-0,4
10
-1
-0,9
-0,9
-1,1
-1,5
6
-2,0
-1,5
-2
8
-1,8
-2,3
4
Short-term interest rate
2
-2,5
2009
2010
Brazil
2009
2011f
2012f
Latin Am and Caribbean
Fiscal balance (% of GDP)
2010
2011f
Long-term interest rate
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012f
13,0
0
12,4
12,3
12,3
2009
2010
2011f
12,2
12,0
11,0
-1
10,0
-1,6
-2
-1,6
-1,5
-1,5
9,0
8,0
-2,5
-3
-2,7
7,0
6,0
-3,3
-4
5,0
-3,8
Brazil
Latin Am and Caribbean
2012f
Last update: September 2011
POLITICAL OUTLOOK
Pdt. D. Rousseff will face growing coalition management challenges given increasing dissatisfaction among allied legislators upset over
her decision to take a hard stance on corruption, favour of technocratic appointments to government posts over political appointments.
Between July and September, four Ministers left her coalition government, due to corruption allegations. As a result, the Workers‟ Party
(PT) has faced open opposition from several coalition partners on legislation passing through congress.
To appease her congressional base of support, Rousseff will be forced to make strategic concessions to congressional allies on
occasions. Nevertheless, Rousseff's relationship with allied parties will remain structurally difficult. Her public approval ratings remain
however high.
Ms Rousseff is known to be a strong manager, but her leadership skills have yet to be demonstrated. It is unlikely that politically sensitive
reforms (tax system, labour legislation, ...) shall be made, especially in more challenging internal politics and global economic context. Ms
Rousseff is unlikely to take a strong ideological leadership role in Latin America.
For specific sectors such as mining and oil, Rousseff's weaker political standing would also increase tax risks.
ENERGY OUTLOOK
Wind & Geo
1%
Nuclear
2%
Oil
7%
Gas
11%
Biomass
3%
Coal
1%
Electricity matrix
(installed capacity)
in 2009
Hydro
75%
Electricity (Source: Enerdata)
Capacity (2009)
104 GW
Production (2009)
465 TWh
Consumption (2009)
410 TWh
Natural gas (Source: Enerdata)
Proven reserves (2009)
365 Gm3
Production (2009)
12 Gm3
Consumption (2009)
20 Gm3
Electricity
* Brazil is the 10th largest energy consumer in the world. The largest source of electricity generation is hydropower (75 %). Together with
Paraguay, Brazil maintains the world's second largest operational hydroelectric complex, the Itaipu facility on the Parana River, with a
capacity of 12.6 GW.
* State-owned Electrobras is the largest generating company in Brazil, controlling over half of total installed capacity. Other state-owned
companies control most of the remaining capacity.
* Electricity tariffs have to be approved by the federal energy administration (ANEEL)
* Brazil has two nuclear power plants, the 630-megawatt (MW) Angra-1 and the 1,350-MW Angra-2. State-owned Eletronuclear, subsidiary
of Electrobras, operates both plants. In 2007, Electronuclear received permission from the government to resume construction of a third
one, Angra-3. Government will invest around USD 4 billion. The commercial operation expected to start in 2014.
* The governement plans to build 8 nuclear plants of 1000 MW each by 2030. 4 first plants will be developed: two plants in the North East
region and two in the South East region. The governement invites the private investors to participate in a model of association yet to be
defined.
* In January 2010, the first ethanol power plant in the country has been commissioned (87 MW in Juiz de Flora).
* Electricity demand, according to Brazilian authorities, should increase by 5.7% yearly to 2013.
Gas
Wide-ranging changes in 2010 to Brazil‟s oil and gas regulation have severely limited the access of private companies to E&P activities in
the pre-salt layer and other unspecified „strategic‟ areas, where companies can only operate in partnership with the government. Foreign
oil companies therefore face a high degree of uncertainty in their dealings with the federal government, which could result in higher costs
and delays. Although Brazil‟s government honours contractual obligations, intensified state intervention adds to uncertainly with regards to
potential demands for renegotiation of terms in investment and commercial contracts.
Gas production is slowly progressing but remains too weak for the country's demand.
The industrial sector is the largest consumer of natural gas, representing about 80 percent of total national consumption.
Petrobras is the largest producer of natural gas in Brazil. The company reportedly controls over 90 percent of Brazil‟s natural gas reserves.
Other important actors in the sector include Sulgas and Britain‟s BG. Petrobras is also the largest wholesale supplier of natural gas in the
country.
Petrobras plans on an increase in the gas consumption to 49 Gm3 in 2013. The national hydrocarbons company also plans to develop the
subsalt fields of Santos and is going to invest 174 BnUSD to 2013.
Under sweeping proposed reforms to Brazil's oil and gas regulatory system announced in September 2009 by President Lula, the country's
concession-based system has been replaced by one based on production-sharing agreements (PSAs), with state oil giant Petrobras
poised to play a primary role in the development of offshore sub-salt resources. The comprehensive changes to the regulatory framework
do not affect previously awarded contracts in the sub-salt area, but will apply to all new contracts..
Most onshore production occurs in Amazonas and Bahia states, though natural gas produced here is mostly for local consumption due to
the lack of transportation infrastructure. However, several new transport infrastructure projects hope to facilitate increased production in
these regions.
ENVIRONMENT OUTLOOK
Water (Source: Agência Nacional de Agua)
Access to drinking water (%)
82
Access to sanitation (%)
50
Waste
(Source: Unstat 2007)
Municipal waste collection (%)
Municipal waste generation
83
51,4 Mt/year
* 80% of the waste market is controled by the State, 15% by the municipalities, 5% is managed by the private sector. The companies
working in the waste sector are parts of ABRELPE, the association of solid waste collectors.
* Among the challenges is the still high number of poor Brazilians living in urban slums and in rural areas without access to piped water or
sanitation; water scarcity in the Northeast of Brazil; water pollution, especially in the South-East of the country.
* The great majority of investments in water and sanitation in Brazil are financed from domestic resources, with some complementary
financing from international financial institutions.
* Only three companies (Sabesp, Sanepar et Copasa) are strong and succeed in self-financing. The number of private concessions
remains today very limited. Only 31 municipalities granted the management of their water service to private companies (it represents only
4% of the connected population). Indeed, only big municipalities can free themselves from state societies because the size of their territory
can attract private companies.
Last update: September 2011
CHILE
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Sebastian Piñera (Coalición por el cambio, centre-right)
Elected in: January 2010
Next poll: December 2013-January 2014
Key Ministers: Minister of Energy: Rodrigo Álvarez
Minister in charge of Environment: María Ignacia Benítez Pereira
Parliament: Bicameral Congress: Senate: 38 seats ; Chamber of deputies: 120 seats
Elected in: December 2009
Next poll in December 2013
COUNTRY RISK
Investment Grade. Strong capacity to meet
financial commitments.
A+
Standard & Poor's
Very high economic, institutional or government
financial strength and no material medium-term
repayment concern.
The political and economic situation is good. A
basically stable and efficient business environment
nonetheless leaves room for improvement.
Corporate default probability is low on average
Aa3
Moody's
A2
COFACE
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
SECURITY RISK
B
Control Risks 2010
L
Overall
Financial
Business
Chile
Low
World Median
Political
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
17.1 Urban population
203.6 HDI ranking
Exchange rate (CLP/USD): 464.1 (09/2011)
89%
45/169
* Chile is a leading emerging market with strong economic fundamentals, a broad network of free-trade deals, and solid GDP growth
prospects. The Chilean economy expanded at an annual growth rate of 7.3% in May 2011, driven mainly by the industrial and commercial
sectors responding to sustained private consumption. The economy is likely to continue its expansion in 2011–12, as most of Chile’s
industrial production and export capabilities get completely restored and gross fixed investments provide extra thrust. Chile will maintain
sound public finances. 2011 forecast for GDP growth is 6.7%.
* Central bank sees inflation holding near 3 pct target with key interest rate to hold steady in near-term and reserves on strong footing if
global crisis re-ignites. The impact of the modified external scenario will be visible more strongly in the growth rate for 2012.
* On a purely domestic front, risks center around the ongoing strength of output and demand, which could lead the Chilean economy to
continue to grow above the trend, causing inflationary pressures misaligned with the inflation target.
Real GDP Growth (%) change from a year earlier
8
8
4,5
4
2
7
6
1,6
2,9
CPI Inflation (%) change from a year earlier
9
5,6
5,2
6
1,9
0
5
3,0
4
-1,7
2
-3,9
-4
3,0
3
-2
1,6
2,7
2,3
1
-6
0
2009
2010
2011f
Chile
2012f
2010
2011f
Chile
6,2
4,6
2012f
OECD
Interest rates (%)
14
6
12
10
4
2
2009
OECD
Current Account Balance (% of GDP)
8
1,7
1,4
0,4
Short-term interest rate
Policy Rate
8
1,5
2,0
6
0
4
-0,5
-2
-0,8
-0,6
2010
2009
-0,7
2011f
2012f
Chile
2
0
OECD
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
2009
Fiscal balance (% of GDP)
2010
2
2011f
2012f
0,8
0
-2
-0,6
-1,1
-4
-6
-4,7
-4,7
-5,9
-7,0
-8
-8,0
-10
Chile
OECD
External debt (% GDP)
50
45
40
35
30
25
20
15
10
5
0
20,7
11,5
12,2
6,6
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
*The popularity of Pdt. Piñera, continues to slump to unprecedented lows, due to a generalized feelings of a widening gulf between ordinary
Chileans and the political class, which is perceived as being opaque, resistant to change and prone to clientelism and corruption.
*Pdt. Piñera announced a second cabinet reshuffle in June. However, many Chileans say the billionaire president has failed to deliver on
pledges to reduce poverty and raise living standards.
*The student demonstrations and strikes entered their fourth month in September and with already one student casualty, Pdt. Piñera met
with the student movement leader.
*Codelco, the government’s copper company faced in July the first national strike in nearly two decades, following which the Piñera
administration quickly conceded to union demands. Other mining companies from the private sector also went on strike.
Despite the above, the risk of more severe political and social instability is still considered low.
ENERGY OUTLOOK
Others
3%
Coal
13%
Hydro
35%
Oil
7%
Electricity matrix
(Installed capacity)
February 2011
Gas
38%
Electricity (Source: CNE Chile)
Capacity (Feb 2010)
16,45 GW
Production (2010)
58,3 TWh
Consumption (2010)
54,85 TWh
Natural gas (Source: Enerdata; ECS)
Proven reserves (2009)
46 Gm3
Production (2009)
1.2 Gm3
Consumption (2010)
4,0 Gm3
Electricity
* Chile is facing a major energy security issue. Pdt. Piñera appointed a consultative Commission on Electricity. The Commission reoort is
expected for October. Additionally, a formal dialogue forum has been established betwen power generators and environment stakeholders
"Energy Scenarios Platform"
* The electricity sector is private with the State having just a regulatory role.
* Power production is mostly made by the following companies: ENEL, AES GENER, Colbun and IPR-GDF SUEZ, the four leading actors.
* Former government has issued a Law to help the development of non-conventional REN projects, requiring a 10% NCREN share in the
mix by 2014. Discussions are taking place on whether to increase these requirements, or not.
* Due to the curtailments of cheap gas supply from Argentina, Chile has been increasing the use of coal-fired power plants to fulfill the
electricty demand of the country (and it is keeping this trend).
* Hydropower has historically been Chile's single largest power source until 2008 (29% in 2009). Droughts, however, have periodically
curtailed hydropower production, causing surplus shortfalls and blackouts. Thermal generation represents 62%. Renewables are beginning
to enter the generation mix (around 4% nowadays).
* Chile has 4 different electricity networks not linked together. The Northern network (SING Sistema Integrado del Norte Grande) mainly
where GDF SUEZ is active, mostly supplies energy to mining companies (copper producers). The SIC (Sistema Interconnectado del
Centro) covers the central part of the country (including the Santiago area).
* Impact on SIC resulting from the February 2010 earthquake are over. However, emblematic hydro project Hydroaysén is a source of
intense debate and confrontation.
* Due to economic growth, Chile is facing around 6+% yearly increase of electricity demand. Investments in infrastructures are needed to
face this increase. Yet Chilean government has not, until now, undertaken the necessary measures and could face serious problems in the
future.
* Further to Fukushima nuclear events, Chile is reconsidering pursuing a nuclear option.
Gas
* To fulfill Chilean consumers growing energy demand, Chile's government decided in the late 90's to support the development of natural
gas consumption through cheap imports from Argentina. However, since 2004, natural gas availability in Argentina started to fall, while
domestic demand was ramping up: thus, Argentina began to limit the natural gas exports to Chile. Hence, Chile was really short of gas,
with any option to increase imports. The government decided to back the development of LNG terminals, while the energy matrix was
diversified, mainly with coal-fired capacity.
* Quintero and Mejillones LNG terminals' construction were completed in 2009 and 2010 respectively. Mejillones terminal is essentially
supplying copper mines of the SING while Quintero terminal supplies the SIC.
* In spite of the investments in new coal-fired plants (made to diversify the power mix in order to decrease reliance on natural gas and
increase security of energy supply), the government wants to further diversify the energy matrix, increasing the share of renewable
energies.
* Gas imports from Argentina are expected to remain limited and stable, around 0.3 Bcm/year. No imports from Bolivia nor Peru are
expected, at least in the short-medium term.
* Coal supply is guaranteed at low prices, which is a clear advantage compared to natural gas. Moreover four coal-fired thermal power
plants will come online in the SIC within the end of 2010 and 2011, while the same will happen in the SING before the end of 2011.
ENVIRONMENT OUTLOOK
Water (Source: Chile institute of statistics 2007)
Waste
(Source: Chile institute of statistics 2007)
Access to drinking water (%)
95.2
Municipal waste collection (%)
Access to sanitation (%)
92
Municipal waste generation
5.3 Mt/year
* In its proposed constitutional reform of H1 2010, the Chilean government recognises that the availability of freshwater as a matter of
national security. Environmentalists applaud the initiative, but some business groups are worried it will hurt their bottom line.
* The Chilean water supply and sanitation sector today is characterized by one of the best coverage and quality levels of Latin America.
One of the reasons was a gradual and lasting extension of infrastructure which began in the 1970s. In the 1990s, most utilities improved
their economic efficiency and became self-financing companies which were partially handed over to the private sector.
* 100 % of the services of water and purification of the urban areas of the country are managed by private firms.
* A desalination project promoted by Agbar to supply freshwater for the mining industry in III Region had its EIS rejected by the
Environment Ministry.
* SISS (Superintendencia de Servicios Sanitarios) executes control of concessions of the services of water and purification of Chile.
* CONAMA (1994), National Commission for Environment is responsible for the production of norms and establish the guidelines of the
government's waste policy
Last update: September 2011
COLOMBIA
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Juan Manuel Santos (Partido de la "U")
Elected in: May 2010
Next poll: May 2014
Key Ministers: Secretary of Mines and Energy: Carlos Rodado Noriega
Minister of Environment: Beatriz Uribe Botelo
Parliament: Bicameral Congress: Senate: 102 seats ; Chamber of deputies: 166 seats
Next poll in March 2014
Elected in: May 2010
COUNTRY RISK
Standard & Poor's
Moody's
Less vulnerable in the near-term but faces major
ongoing uncertainties to adverse business,
financial and economic conditions.
The government would have the capacity to
sustain a coherent economic policy framework and
avoid any near-term debt repayment problems if
confronted with a severe shock to public finances.
BB-
Baa3
A4
M
COFACE
SECURITY RISK
Control Risks 2010
B
Corporate default probability is still acceptable on
average and business environment is improving.
Country vs. World Median by Global Insight
(Five-year risk aggregates)
35
30
25
20
15
10
Medium - High in rural areas
5
0
Overall
Financial
Colombia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Exchange rate (COP/USD): 1814,5 (09/2011)
Population (Million)
46 Urban population
75%
Nominal GDP (Bn USD)
288 HDI ranking
79/169
* Real GDP will grow by 5% in 2011 and in 2012 with an accommodative fiscal policy. Recently, the Congress approved reforms that will
reduce budget rigidities and support a steady decline in the fiscal deficit in 2012-15.
*The construction sector is booming, growth rate reached 127.6% in May 2011 in the area licensed for construction. Rapid growth in
home building is being driven primarily by projects destined for low and lower-middle income families. The benefits of economic growth
are gradually spreading throughout the economy, with a boost to the disposable incomes of low- and lower-middle income households.
*Investment in oil-related projects will grow by 33% in 2011, to US$4bn, this upturn will be spurred partly by a rise in the number of new
blocks opened up for oil exploration., resulting in a faster growth of oil production—which, on the basis of current trends, is expected to
reach 1m barrels/day by the end of next year or the beginning of 2013. The government has presented a bill to Congress aimed at
securing legislative approval for the sale of a further 10% stake in the state oil company, Ecopetrol.
Real GDP Growth (%) change from a year earlier
7
CPI Inflation (%) change from a year earlier
9
5,8
6
8
4,8
5
4,2
7
3,6
6
4
4,3
3
4,0
1
6,0
6,5
6,1
4
1,5
3
0
4,2
4,2
3,3
2
-1
-2
6,4
5
2
-1,8
2,3
1
-3
0
2009
2010
Colombia
2011f
2012f
Latin Am and Caribbean
2009
2010
Colombia
Current Account Balance (% of GDP)
2011f
2012f
Latin Am. and Caribbean
Interest rates (%)
14
Short-term interest rate
1,5
Policy Rate
12
0,5
10
-0,5
8
-0,4
-1,5
-2,5
-0,9
-0,9
-1,1
-1,7
-2,7
-2,1
-3,1
6
4
2
-3,5
2009
2010
2011f
Colombia
2012f
0
Latin Am and Caribbean
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011f
External debt (% GDP)
2012f
1
25
22,9
22,5
21,1
20,4
0,2
20
0
-0,5
-1
-2
-1,6
-3
-4
-2,7
-3,7
-3,8
-1,5
10
5
0
-3,5
Colombia
15
Latin Am and Caribbean
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
*The president, Juan Manuel Santos, will enjoy a secure congressional majority for most of his term, but his popularity—and his chances
of re-election—would suffer if the economy underperforms or if public security deteriorates. He is focussing, among other issues, on
reducing poverty and inequality and on strengthening institutions, which, if successful, would help to reinforce political stability.
*The FARC has stepped up the frequency of its attacks. A change in the guerrillas tactics is causing a major headache for the security
forces. Mr Santos, a former minister of defence, has instructed his minister of defence to carry out an urgent review of security policy.
*The government is keen to foster stronger economic links with neighbours along the Pacific rim of South and Central America. Colombia,
Peru and Chile, along with Mexico, have launched a new trading bloc initiative, called the Pacific Alliance.
ENERGY OUTLOOK
Oil
4%
Electricity (Source: Enerdata)
Capacity (2009)
14,5 GW
Production (2009)
58 TWh
Consumption (2009)
43,8 TWh
Gas
27%
Electricity matrix
(Installed Capacity)
In 2009
Hydro
64%
Coal
8%
Natural gas (Source: Enerdata)
Proven reserves (2009)
121 Gm3
Production (2009)
8,8 Gm3
Consumption (2009)
3 Gm3
Electricity
* Since 1994, private companies own the right to produce and distribute electricity. There are approximately 43 companies producing electricity, 9
transmission companies, 32 distribution companies and 72 marketers.
* CREG, the regulator of this sector, mostly maintains a strict division between generation, transmission, and distribution activities, though it does
allow some legacy companies to maintain vertically-integrated operations (ENEL, state-owned EPM and Colinversiones). In the generation sector, the
major players are Enel, state-owned companies EPM, ISAGEN, Gecelca and locally held Colinversiones.
* The largest electricity distributing company in Colombia is CODENSA (ENEL), which serves over one million customers in Bogota and surrounding
areas.
* Energy Transportation National System (STN) is divided in 5 regional networks and 37 local networks. It manages 12 000 Kms of electric lines.
* The state expects a rise of the electricity demand at an average growth of 4% yearly. To fulfill this demand, the Colombian State would construct a
series of either hydropower facilities or coal fired facilities by 2020. There are 3 large hydro projects under construction (2400 MW Ituango EPM lead,
800 MW Isagen’s Sogamoso HPP and 400 MW Enel’s Quimbo HPP). Government plans to launch during 2011 a tender for new capacity to be ready
in 2016.
* Around 80% of electricity is generated with hydro resources. Once every 5 to 7 years, there's a climatological phenomenon that causes droughts for
about 6 to 8 months and then floods for the same period. Hydro generations is reduced to around 40% during El Niño phenomenom, so demand is
supplied with increased natural gas and fuel oil thermal generation. Coal fired units remains as base load generation.
Gas
* The State is the sole owner of the country's hydrocarbons resources and concessions the exploration and production activities to third parties.
* Colombia has natural gas reserves spread across 18 basins, seven of which have active production.
* Ecopetrol (state controlled) is in charge of gas' E & P, often associated with foreign companies like BP, Total and Triton for the Cusiana-Cupiaga
gas field.
* Since 2008 Colombia is interconnected with Venezuela for gas exportations through a 220 Kms pipeline.
* In order to benefit from potential unknown reserves, Government is strongly giving incentives for E&P activities after 2010 mostly in the Caribbean
region.
* Given El Niño effect in hydrology (droughts), once every 5-7 years, demand of natural gas for power generation increases substantially for a 6 month
period. Due to uncertainty on outcome of new exploration and this volatility in demand, Colombia is analyzing the possibility to build an LNG
regasification terminal.
ENVIRONMENT OUTLOOK
Water (Source: Instituto Estadístico Colombiano 2008)
Access to drinking water (% urban)
98
Access to sanitation (% urban)
91
Waste
(Source: Instituto Estadístico Colombiano 2008)
Municipal waste collection (%)
95
Municipal waste generation
81,7 Mt/year
* The government of Álvaro Uribe wanted to rapidly increase coverage, overtaking the Millennium Development Goals for the sector and to improve
service quality, especially in the rural areas where the access to drinking water is far lower (66%) than in cities. Uribe aimed at obtaining in 2015, 81%
rural access to drinking water. The problem is the same in sanitation as rural areas have a 51% access level. The new government is likely to
continue this policy.
* Regulation is the responsibility of two separate institutions at the national level, the Comisión de Regulación de Agua Potable y Saneamiento Básico
(CRA) and the Superintendencia de Servicios Públicos Domiciliarios (SSPD), a multi-sector regulatory agency.
Last update: September 2011
PERU
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Ollanta Humala (Gana Perú)
Elected in: July 2011
Next poll in 2016
Key Ministers: Minister of Mines and Energy: Pedro Sánchez
Minister of Housing, Construction and Sanitation : Juan Sarmiento
Parliament: Single cameral Congress. Parliaments: 130 seats
Elected in: July 2011
Next poll in 2016
COUNTRY RISK
Investment Grade. Adequate capacity to meet
financial commitments, but more subject to
adverse economic conditions.
BBB
Standard & Poor's
35
The government would have the capacity to
30
sustain a coherent economic policy framework and
25
avoid any near-term debt repayment problems if
confronted with a severe shock to public finances. 20
Baa3
Moody's
Country vs. World Median (Global Insight)
(Five-year risk aggregates)
15
Volatile corporate environment. Corporate
default probability remains appreciable.
A4
COFACE
10
5
0
SECURITY RISK
Control Risks 2010
Overall
B
M
Financial
Peru
Medium
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
29.5 Urban population
153.8 HDI ranking
Exchange rate (PEN/USD): 2.72(09/2011)
71.6%
63/169
Growth is forecast to be 6.2% in 2011 and will be fuelled by investment and private-consumption growth, as well as a healthy export
performance. Unless there are unexpected radical policy announcements, local currency will remain on an appreciating trend. GDP
growth could decline if global growth dips into a second recession. A gradual, 25% rise in the minimum wage by January 2012, has been
criticised by business leaders who believe it will lead to higher informal employment, as hiring becomes too onerous for small businesses.
Peru’s minimum wage is already higher than in countries such as Brazil and Chile. A relatively low inflation and a stable currency will help
to stimulate investment, as will abundant opportunities in energy, mining, and infrastructure. In August, Peru’s S&P country rating moved
from BBB- to BBB. Nevertheless, Peru will remain vulnerable to fluctuations in external demand and commodity prices. Educational levels
remain low, with only marginal progress forecast.
Real GDP Growth (%) change from a year earlier
11
CPI Inflation (%) change from a year earlier
7
8,8
9
6
6,7
7
5,3
5
3
6,4
6,0
6,5
6,1
5
5,8
4
-1,8
3,6
4,0
3
1
2
-1
0,9
3,1
2,9
2,7
1
-3
-5
1,5
0
2009
2010
Peru
2011f
2012f
2009
Latin Am and Caribbean
2010
Peru
Current Account Balance (% of GDP)
2012f
Interest rates (%)
25
1
2011f
Latin Am. and Caribbean
0,2
0
20
-1
-0,4
-0,9
-0,9
-1,1
15
-1
-1,5
-2
Short-term interest rate
Policy Rate
10
-1,5
-2
5
-2,1
-3
2009
2010
Peru
2009
2011f
2012f
Fiscal balance (% of GDP)
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
2010
2011f
External debt (% GDP)
2012f
0
40
35
-0,5
-1
-1,6
-1,6
-2,7
-3
28,1
30
-0,9
-1,1
-2
0
Latin Am and Caribbean
-1,5
26,2
25,1
25
23,1
2011f
2012f
20
15
10
5
-4
0
-3,8
Peru
Latin Am and Caribbean
2009
2010
Last Update September 2011
POLITICAL OUTLOOK
After promising a "national market economy", Pdt. Humala is under pressure to deliver concrete results for two different sectors: (1)
investors and markets, demanding continuity of current economic policies and the commodities-driven model of economic growth and (2)
Humala’s radical support base in the southern regions is demanding an overhaul of the use and control of natural resources (minerals,
hydrocarbons and hydroelectricity).
In fact, his policy might choose between moderate and radical depending on circumstances. For instance, he appointed an eclectic
cabinet including members of all the political spectrum. Some symbolic measures may be deployed. However, the Government continues
tough policies on drug trafficking and armed insurgency. Changes to the hydrocarbons industry remain unclear.
Humala’s “Gana Perú” alliance, has a precarious two-seat majority in Congress.
On external policy, the relationship with Brazil will be the priority and the relationship with Chile will be strengthened. The pursuit of
bilateral free-trade agreements (FTAs) may suffer a slowdown.
The main weaknesses in Peru’s business environment (weak institutions, a rigid labour market, low productivity levels and inadequate
infrastructure) are not expected to improve during Humala’s Administration.
ENERGY OUTLOOK
Electricity matrix
(Installed Capacity)
in 2010
Natural gas
33%
Fuel Oil
24%
Electricity (Source: COES/MINEM)
Capacity (2009)
7,986 GW
Production (2009)
32,945 TWh
Consumption (2009)
27,087 TWh
Hydro
41%
Coal
1%
Natural gas (Source: Min. of Energy and Mines,2009)
Proven reserves (2009)
339,1 Gm3
Production (2009)
3.4 Gm3
Consumption (2009)
3.39 Gm3
Electricity
* GoP rural electricifaction target is 85% for 2016. GoP also launched tender processes to increase installed capacity (non conventional
renewables, hydro and reserve capacity). Distcos also organized energy auctions to secure LT supply for its regulated demand in terms of
8 to 12 yearsElectricty sector was unbundled in the early 90's.*The largest generating company in Peru is Edegel, majority-owned by
ENEL, followed by Electroperu, state- owned company which operates the Mantaro hydro complex. Around 75% is generated by the
private sector. Market expansion relies on natural gas and untapped hydro resources of around 59 GW which only 6% are used.
* The largest electricity distributor in Peru is Edelnor, a subsidiary of Enel, which operates in Lima and the surrounding area.
* The largest transmission company in Peru is the Colombia-based ISA Group, which controls over 86% of the transmission grid in the
country. Generators and distributors have by law, non-discriminatory access to the national transmission grid.
* Peru has entered in a stratgeic electricity allinace with Brasil calling for the construction of several hydro palnst in Peru's Amazon region.
Gas
* The Humala government is putting pressure on Camisea consortium to ensure that gas from block 88 is exclusively dedicated to local
consumption. Despite initial declarations regarding local gas prices, only symbolic reduction in LPG price has been enforced. Peru has
important gas resources (proved 11.66 TCF, potential 37.6 TCF).
* Transportadora de Gas del Peru (TGP), a consortium led by Techint, constructed and operates parallel natural gas and NGL pipelines
that carry Camisea production to Lima and to a fractionation plant in Ica. TGP is expanding its capacity derived to important demand for
power generation and other industrial uses: a redefined project has been approved in 2011 implying a combination of a new compression
plant in Kepashiato (middle of the rainforest part of the pipeline) and two mini loops. Local Market capacity upgrade will scheduled as
current capacity of 530 MMCFD, in January 2013 a total 650 MMCFD and in January 2014 a total 920 MMCFD. Total investments is
around 789 MMUSD.
* Hunt Oil leads the Peru LNG consortium built a LNG export terminal at Pampa Melchorita, 160 km south of Lima. The natural gas
resources in excess of domestic demand will be exported as a sustainable commodity over 20 years. The total investment for the project,
including the liquefaction plant, related marine and pipeline facilities and development and financing costs is estimated at $3.8bn.
Peru LNG facility has an operating capacity of 4.2 million tpa, and started operations in June 2010. Most of the production will likely go to
Mexico and Pacific market.
* Kuntur Transportadora de Gas is developing the Gasoducto Andino, a 1,085km pipeline project that would transport gas across the
sierra from Camisea in Cusco to Ilo. Offtakers may include power generation, petrochemical plants and potentially and LNG liquefaction
plant, and more than 30 SMEs. The project also will benefit more than 1.7mn residents. Brazil's Odebrecht signed in March 2010 an
agreement to enter the project by acquiring from 51% to 100%
* Besides Camisea, the largest concentrations of Peru's natural gas production includes the Aguaytia gas field (Maple Gas) in central
Peru, Block Z-2B (Petro-Tech) and Block Z1 (BPZ), both located off the northwest coast.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2009)
Waste
(Source: Unstat 2009)
Access to drinking water (%)
92 urban / 63 rural
Municipal waste collection (%)
75
Access to sanitation (%)
85 urban / 36 rural
* GoP target is sanitation coverage of 60% in rural areas by 2016. Minister Cornejo efforts shall be focused in providing low-cost water
services to remote populations
* Peru will soon increase the coverage of drinking water and basic sanitation services for some 380 rural communities and small towns in
the regions of Apurímac, Ayacucho, Cusco, Huancavelica, and Puno. The project, which requires a 90 MUSD investment, will receive a
grant from the Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean.
* Peru's investment agency (ProInversión) awarded Lima's Taboada wastewater treatment plant concession to Spanish firm ACS. Veolia
and FCC have submitted a waste water treatment plants rehabilitation project in Lima area to Proinversion in May 2011.
IV -WESTERN EUROPE
Austria
Germany
Greece
Italy
The Netherlands
Norway
Portugal
Spain
United Kingdom
Last update: September 2011
AUSTRIA
POLITICAL BACKGROUND
Type of government: Parliamentary
Head of Government Chancellor Werner Faymann (Social Democratic Party of Austria)
Appointed by the President in December 2008
Key Ministers: Minister of Economy, in charge of Energy: Reinhold Mitterlehner (ÖVP)
Minister for Agriculture, Forestry, Environment and Water management: Nikolaus Berlakovitch (ÖVP)
Minister of transport, innovation and technology, in charge of sustainable development: Doris Bures (SPÖ)
Parliament: Bicameral Congress: NationalRat (183 MPs elected for 4 years) and Bundesrat (62 senators elected by the
Länder parliaments; term of delegates varies by province)
Elected in: September 2008
Next poll in: September 2013
COUNTRY RISK
Maximum security
AAA
Aaa/STA
Standard & Poor's
Moody's
The political and economic situation is good. A
basically stable and efficient business environment
nonetheless leaves room for improvement.
Corporate default probability is low on average.
A2
COFACE
SECURITY RISK
Control Risks 2010
B
Country vs. World Median
Highest quality with minimal credit risk
L
Low
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Financial
Austria
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
8.4 Urban population (2010)
67.6%
Exchange rate (EUR/USD): 0.73 (09/2011)
Nominal GDP (Bn USD)
376.6 HDI ranking
25/169
* Notwithstanding the strong economic recovery in Austria during 2010 and first-half 2011, risks are increasing rapidly now. The again
worsening public-finance crisis in Eurozone entails worries for Austrian taxpayers and for banks across the region. The Austrian
economy is notable for its openness and a relatively high export dependency, especially vis-à-vis the Eurozone and Eastern Europe. The
economy in Germany—Austria's most important trade partner—has surprisingly weakened to almost stagnation during the second
quarter. The government’s fiscal-consolidation steps in 2011 to reduce the public-sector deficit (IHS Global Insight forecasts a fall from
4.6% of GDP in 2010 to 2.3% by 2013) should be seen positively against this background. The medium-term public-finance framework
for 2011–14, last updated by the grand coalition government in April 2011, has reassured that deficits are being tackled without
becoming overly restrictive.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
4
4
3,2
3
3,2
2,1
1,4
2
1
1,7
1,6
2010
2011 f
2,1
0,9
0
-1
3
2009
2012 f
1,8
2
1,8
-2
-3
-4
2,4
-3,4
1
1,5
0,5
0,2
-4,2
0
-5
2009
Austria
Eurozone
2010
Austria
Current Account Balance (% of GDP)
2011 f
2012 f
Eurozone
Interest rates (%)
8
5
4
3,1
2,7
3
7
2,7
2,4
Short-term interest rate
Long-term interest rate
6
2
5
1
4
0
0,2
0,1
-1
0,1
0,0
3
-2
2
-3
1
2009
2010
2011 f
Austria
2009
2012 f
Fiscal balance (% of GDP)
2010
0
Eurozone
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
2012 f
0
84,0
-1
82,0
81,6
80,0
80,0
-2
78,6
78,0
-3
-2,8
-4
-5
-3,2
-3,5
-4,1
74,0
-4,2
-4,6
72,6
72,0
70,0
-6
-7
76,0
-6,3
-6,0
Austria
68,0
Eurozone
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Austrian politics is a volatile but ultimately consensual affair. The two main parties are highly business friendly and there is hardly any
risk for business operators emanating from the political sphere. The "grand coalition" government partners, the Social Democratic Party
(SPÖ) and the People's Party (ÖVP), are opposed on a number of issues, most notably privatisation. However, such disagreements
have not caused major disruption to government as both parties retain a business-friendly outlook
ENERGY OUTLOOK
Biomass
3%
Electricity (Source: Enerdata)
Capacity (2010)
23.4 GW
Production (2010)
70.7 TWh
Consumption (2010)
63.3 TWh
Coal
11%
Hydro
54%
Electricity matrix
(installed capacity)
in 2010
Gas
15%
Oil 2%
Wind &
Geothermic
5%
Natural gas (Source: EIA)
Proven reserves (2010)
1,0 TCF
Production (2010)
61,0 BCF
Consumption (2010)
322,0 BCF
Energy
* According to IEA, the energy consumption should increase by 0,5% /year until 2020. The gas share in the energy mix remains at 23%.
Electricity
* Transmission: the lack of power plants, combined with a deficient electric link between South and North causes supply disruptions in
the industries located in the South of the country.
* Support for renewable energy sources (RES) might overshadow natural gas in electricity production. The mix of energy sources is
characterized by significant RES with a share of around 60 percent in electricity production in 2009, mainly due to hydropower. However,
a growing renewable energy is biomass. With 47 percent of the Austrian territory covered by forests, the woodland share is one of the
highest in Europe. Consequently biomass use has been extensive in Austria. The government is facing environmental contests to build
new hydro-powered plants. The potential for hydropower in Austria amounts to 7 TWh.
* Currently there are around 3 GW of gas capacity in Austria, both combustion turbine and cogeneration. Up to now, the power sector
has been a key driver for natural gas consumption.
* Natural gas, as a share of total generation capacity, will remain around 15 percent to the outlook horizon of 2020. Hydro share is also
expected to remain stable, although capacity might increase a bit. But the biomass share should continue growing.
Gas
* Diversification of transport routes for security of supply: Austria imports most of its gas through pipelines arriving at the Baumgarten
Hub and participates in the two major pipeline projects in the region: Nabucco and South Stream. The Austrian incumbent OMV is a
shareholder of the Nabucco project. In April 2010, Austria joined the Russia-led project South Stream. Procuring liquefied natural gas
(LNG) through the 25.6 % share of OMV in Adria LNG GmbH might be another way to diversify supply. Adria LNG is planning to build a
regasification terminal of 10 Bcm per year of capacity on the island of Krk, off the Croatian coast. Austria could receive some of this LNG
through Croatia.
• Storage development. As part of the drive to improve security of supply the country is encouraging construction of new storage
facilities. However, the new facilities (Haidach and 7Fields) being built or expanded will be connected only to the German market.
Connection to Austria expected in the next 2 or 3 years. The whole storage capacity has been fully booked on a long-term basis.
• A nascent hub. The liquidity at Central European Gas Hub (CEGH) is developing only slowly when compared to more recently created
hubs in Europe, such as Germany’s NetConnect Germany (NCG) and Gaspool, with regular trading in some products still not occurring.
*In March 2011, the Austrian government has approved the new gas law, Gaswirtschaftsgesetz (GWG). The new rules will
fundamentally change the country’s current gas market model.
The biggest change will be the introduction of a virtual trading point with one entry/exit zone by 1 October 2012. In the future, the
Austrian gas market will have one main market area, whose manager will be in charge of the new virtual hub.
The second main change required by the new law is the unbundling of the three Austrian transmission system operators (TSOs) BOG,
OMV and TAG. BOG is a joint venture that was created by GDF SUEZ, Ruhrgas and Austria’s OMV. According to the legal text, the
parent companies have the choice of four different unbundling models.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
100
100
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste landfilled
4,941
0.7%
Last update: September 2011
GERMANY
POLITICAL BACKGROUND
Type of government: Parliamentary (Federal Republic)
Head of State: Christian Wulff (CDU)
Elected in: June 2010
President
Next poll: May 2015
Angela Merkel (CDU)
Since 2005
Chancellor
Key Ministers: Deputy chancellor, Minister of Economics and Technology: Philipp Rösler (FDP)
Minister of Environment, nature conservation and nuclear safety: Dr. Nobert Röttgen (CDU)
Parliament: Ruling Coalition: CDU-CSU (239 seats), SPD (146 seats), FDP (93 seats)
Elected in: September 2009
Next poll in September 2013
COUNTRY RISK
AAA
Aaa
Standard & Poor's
Moody's
Highest rating, maximum security
Highest rating with minimal credit risk
Country vs. World Median
(Five-year risk aggregates)
35
30
The political and economic outlook are
satisfying, the business environment can
show some weaknesses but the risk of
corporate default is very low.
A2
COFACE
25
20
15
10
5
SECURITY RISK
B
Control Risks 2010
L
0
Low security risk
Overall
Financial
Germany
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
81.76 Urban population
73.8%
Exchange rate (EUR/USD): 0.71 (09/2011)
Nominal GDP (Bn USD)
3,298.2 HDI ranking
10/169
*The eurozone crisis bears risks for Germany's economic growth (2.9% in 2011), as the crisis saps confidence, and domestic political
risks for the government over its support for bail-outs. In the first half of 2011 the German current account was driven by the strong trade
surplus, current account balance is expected to reach 167 bn US$ in 2011. The slowdown of growth to just 0.1% in April-June has not
affected the labour market significantly so far, unemployment decreased to 2.95m in July, the lowest level since June 1992.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
3
6
2,4
3,6
4
2
3,0
1,3
1,7
1,6
0
2009
2010
2
2011 f
2012 f
-4
-4,2
1,7
1,1
1
-2
1,8
2,2
1,5
0,9
0,3
-5,1
0
-6
0,2
2009
Germany
Eurozone
2010
Germany
Current Account Balance (% of GDP)
2011 f
2012 f
Eurozone
Interest rates (%)
8
6
5
5,7
7
5,6
4,9
4
4,9
6
3
2
4
1
Short-term interest rate
5
3
0
0,1
2
0,2
0,0
0,1
2011 f
2012 f
-1
2009
2010
Germany
2009
0
Eurozone
Fiscal balance (% of GDP)
2010
1
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
2012 f
0
86,0
83,4
84,0
-1
-0,9
-1,2
-2
81,2
82,0
80,6
80,0
78,0
-3
-3,1
-3,2
-3,3
-4
-4,2
-5
76,0
74,0
73,5
72,0
70,0
-6
-7
Long-term interest rate
-6,3
-6,0
Germany
68,0
Eurozone
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Germany's toughest challenge and largest risk to stability in 2011-15 will be the euro area debt crisis. Support for troubled euro area
countries will remain contentious. Domestic opposition will colour the government's approach. Continued tension is expected in the
Christian Democratic Union (CDU)/Christian Social Union (CSU)-Free Democratic Party (FDP) coalition, but that the government will last
its term to September 2013.
* Economic policy will focus on fiscal consolidation and legislative reform that aims to bring the banking system back to health, provide
ways to deal with bank failure and impose a levy to account for costs to the taxpayer.
*The German parliament approved an EU proposed plan to enlarge and strengthen the European Financial Stability Facility, on 29th of
September.
ENERGY OUTLOOK
Solar
6%
Nuclear Hydro
9%
13%
others
5%
Oil
3%
Wind
17%
Biomass
4%
Electricity matrix
(installed capacity in 2009)
Coal
29%
Gas
14%
Electricity (Source: Enerdata)
Capacity (net, 2009)
147 GW
Production ( 2009)
597 TWh
Consumption (2009)
514 TWh
Natural gas (Source: EIA)
Proven reserves (2010)
6 TCF
Production (2010)
447 BCF
Consumption (2010)
3,514 BCF
Electricity
* Germany has Europe’s largest electricity market. It was totally liberalised in 1998. A new energy law (EnWG) was enacted in July 2005,
that vested the task of regulating Germany's electricity and gas grids to the federal network agency (BNetzA). The Federal Cartel Office
(Bundeskartellamt) is in charge of competition control in competitive activities (sales and generation).
* 4 companies, resulting from the consolidations that followed market liberalisation, control together around 50% of Germany’s installed
electricity generation capacity: RWE, E.ON (~15% each), EnBW and Vattenfall (~10% each). They own and operate most of the largescale power plant, especially in the base load segment (nuclear, lignite, coal) and therefore account for an over-proportional share of the
generated volumes (~70%). The rest of the market is mostly shared between the large number (700+) of municipal utilities ("Stadtwerke"),
which typically integrate distribution and sales activities, and for the larger of them, electricity and/or heat generation. A lot of them are
multi-energy (electricity, gas and/or heat, with district heating being traditionally well developed in most cities) and/or multi-utility (e.g.
energy, waste, water and/or transport). Though the large four players hold participations in a lot of them, ~ 400 are still fully under
communal control.
* The German government’s decision to phase out all nuclear capacity by 2022 and emphasize the expansion of (predominantly
intermittent) renewable energy has significant implications for the German power sector and market reform needs and also affects the
wider Central West Europe (CWE) region. In September 2011, Siemens announced it will abandon its nuclear activities.
- IHS CERA sees a need to integrate 76 gigawatts (GW) of additional intermittent renewable capacity. This will put a strain on the
German power system unless significant infrastructure investments are made. Without a market reform program that goes beyond the
legislative amendments issued this summer, it will be hard for the necessary investments to materialize in time.
- Delays in coal plant retirements and higher fossil fuel utilization could generate an additional 300 million metric tons of carbon dioxide
emissions by 2025. Gas wins in the medium to longer term with an additional 5 GW of new gas plants to 2025 beyond previous
projections.
* Germany is one of the world’s largest operators of non-hydro renewable capacity in the world, including wind generation. But the country
is also the third-largest carbon dioxide emitter in the OECD behind the United States and Japan.
Gas
* Germany has liberalised its natural gas market a little later than the electricity market (official opening 2003), regulation is as well split
between BNetzA and Bundeskartellamt, but implementation of non-discriminatory market access rules and development of liquid markets
is lagging behind.
* There are 4 main types of companies in the gas sector: those that produce (BEB, Mobil, RWE DEA and Wintershall), those that import
and transport over a long distance (E.ON Ruhrgas, BEB, VNG, Wingaz, RWE Energy), regional transport companies (Erdgas Munster,
GVS, EVG, Bayerngas, ...) and regional or municipal distribution companies (public or private).
* Germany is the largest world importer of natural gas after the USA . Major suppliers: Russia (37%), followed by Norway (26%) and the
Netherlands (18%). National resources still contribute to 15% but are decreasing.
* The largest importer and wholesale company in Germany is E.ON Ruhrgas, including affiliate regional distributors, controlling about onehalf of the market and owning the gas transport network (in some cases with foreign partners). As in electricity, the market structure also
consists of Stadtwerke and small regional actors, some only distributing gas, some also electricity.
* Due to its central location in Europe, Germany is a major natural gas pipeline transit hub for imports from Russia and the North Sea.
ENVIRONMENT OUTLOOK
Water (Source: WHO 2008)
Waste
(Source: Unstat 2009)
Access to drinking water (%)
100
Municipal waste generated (Mt)
48,101
Access to sanitation (%)
100
Municipal waste collection (%)
100
Water
* Size of the market : around 20 billion EUR, 20 % managed by private sector. High tariffs : the average water price 2007: 1,75 EUR/m3
(1,26 EUR in France), the average wastewater price: 2,28 EUR/m3
* Highly fragmented sector : 6.400 enterprises provide water and 6.900 - wastewater services. Municipalities treat waste water for 96 % of
the population
Waste
* Further reinforcement of the recycling and incineration. 20 % of waste at landfill disposals, 15 % in incineration, 65 % in recycling (incl.
composting).
* The domestic market of waste is saturated and divided between 4 major players (SITA is 4th), about 10 medium-sized companies and
an large number of small local enterprises. Around 60 % of the market is managed by the private sector.
* Implementation of the EU - waste framework directive: Ongoing political discussion especially on the organisation of the recycling bin
(“Wertstofftonne”) with private or municipal leadership; a tax on waste derived fuels has been introduced in April 2011.
Last update: September 2011
GREECE
POLITICAL BACKGROUND
Type of government: Parliamentary Republic
Prime Minister: George Papandreou (Pan-Hellenic Socialist Movement - PASOK)
Since October 2009
Key Ministers: Minister of Environment, Energy and Climate Change: Giorgos Papakonstantinou (PASOK)
Parliament: Unicameral: Vouli Ton Ellinon (300 seats)
Elected in: October 2009
Next poll in: October 2013
COUNTRY RISK
CC
Standard & Poor's
Currently highly vulnerable
Country vs. World Median
Ca
B
SECURITY RISK
Control Risks 2010
Political and economic uncertainties and
an occasionally difficult business
environment can affect corporate
payment behaviour. Corporate default
probability is appreciable.
L/M
COFACE
Highly speculative, near to default
B
Moody's
(Five-year risk aggregates)
50
45
40
35
30
25
20
15
10
5
0
Low, medium for Albanian border region
Overall
Financial
Greece
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
11.4 Urban population (2010)
304.7 HDI ranking
61.4%
22/169
Exchange rate (EUR/USD): 0.73 (09/2011)
*Given the severe fiscal and economic reforms under way, the performance of the Greek economy is subject to high uncertainty. After
declining by 4.4% in 2010, GDP in Greece is expected to contract by a further 5.1% in 2011 and 2.2% in 2012.
*The huge general government deficit of €36.6bn (15.6% of GDP) in 2009 was significantly cut to €24bn (10.4% of GDP) in 2010 as a
result of austerity measures. However, progress was reversed in the first half of 2011, and the achievement even of recently agreed fiscal
targets seems in doubt. Public debt to GDP ratio will reach 158.2% this year, an extremely dangerous level for the economy. A debt
restructuring option is seen plausible by investors, although it carries severe economic consequences.
*Apart from cutting expenditure and raising revenue, Greece is supposed to carry out a major programme to privatise €50bn of
government assets, including both business enterprises and property holdings, over the next five years via a new privatisation agency,
managed by independent and professional appointees.
*Greek banks are now reliant on liquidity provision by the European Central Bank (ECB). are now having to face losses from nonperforming loans as a result of the continuing recession and we expect that they will also have to sustain substantial losses on their
government debt holdings.
*The country’s latest budgetary tax increases and spending cuts, forced on Athens by the troika of the European Commission, the
European Central Bank and the IMF suggests Greece has more to do yet to effectively receive further international funding.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
3
6
1,7
2
1,6
0,9
4,7
5
1
4
0
2009
-1
2010
2011 f
2012 f
-2,3
-2
-1,7
2,7
3
1,8
2
-4,2
-4
-4,4
1,5
1,2
-3
2,4
1
-4,3
1,1
0,2
0
-5
Greece
2009
Eurozone
2010
Greece
Current Account Balance (% of GDP)
2011 f
2012 f
Eurozone
Interest rates (%)
20
10
18
5
16
0,2
0
0,0
0,1
2010
2011 f
2012 f
0,1
2009
-5
14
12
10
Short-term interest rate
8
-10
-6,9
-8,1
-15
4
-10,4
-11,0
Long-term interest rate
6
2
0
-20
Greece
Eurozone
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
0
-2
-4
-3,2
-4,2
-6
-6,0
-6,3
-8
-6,9
-8,4
-10
-10,5
-12
-14
-16
-15,4
-18
Greece
Eurozone
Public debt (% GDP)
2012 f
200,0
180,0
160,0
140,0
120,0
100,0
80,0
60,0
40,0
20,0
0,0
166,9
158,2
127,5
2009
142,7
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The need for far-reaching expenditure cuts and tax rises will continue to cause political instability. A string of high-profile departures from
government of prominent party members has left Pasok in disarray, struggling to reconcile the liberalisation required with its statist
tradition. The reforms are extremely unpopular, but if they do not succeed, Greece risks a possible exit from the euro area.
*The government has struck a surprise compromise agreement with the opposition to start depoliticising higher-education institutions,
mainly by lowering the influence of student bodies in university administration
*Greece’s standing will also continue to be weakened by its dependence on loans from the EU, IMF and particularly from euro zone
countries, especially as it is unlikely that Greece will ever be able fully to repay these loans. There is potential for a higher level of
antagonism with Germany and other creditor countries, if the fiscal consolidation process fails to make progress. Some northern European
countries are reluctant to provide funds for Greece’s bail out.
ENERGY OUTLOOK
Hydro
22%
Electricity (Source: Enerdata)
Capacity (2009)
14.4 GW
Production (2009)
55.8 TWh
Consumption (2009)
53.3 TWh
Coal
33%
Wind &
Geothermic
6%
Electricity matrix
(installed capacity)
Biomass
in 2009
0.2%
Oil
17%
Gas
20%
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
N/A TCF
0,0 BCF
135 BCF
* Energy: After years of sustained growth, electricity demand is expected to change trend and increase only slowly out to 2020 because of
the 2008–09 economic recession and fiscal measures needed to solve the current public finance crisis.
Lignite is the most important fuel in the mix. However, its relevance is going to decline as new natural gas–fired power plants are expected
to come online, and several old inefficient units will be retired.
Deployment of nonhydro renewable has been limited by red tape despite the large potential. Reforms are in discussion to reduce the
administrative procedures.
* Further integration of the Greek and Balkan power markets into the European common energy market will support region wide strategies.
As an EU member state and signatory of the Energy Community of Southeast Europe, Greece has a strategic regional interest in the
integration of countries in the Western Balkans (former Yugoslav republics and Albania) into the EU internal energy market.
Electricity
* Under the government's privatisation programme, public assets in utilities will be partially privatized. The State's shareholding in the
Public Power Company (PPC) will remain at 51%, PPC accounts for almost 90 % of total capacity, generated by lignite, fuel oil,
hydroelectric, and natural gas power plants, as well as by wind and solar energy parks. PPC is the 2d largest lignite power generator in the
European Union. The State will maintain its controlling stake in DESMHE’s electricity transmission network, although wholesale and retail
markets will be “opened” through structural reforms.
*Retail prices are still under government control, they are not cost-reflective, and there is cross-subsidization between tariff groups.
Before the recession the Greek power system experienced a rapid increase of power demand. However, the continuation of this trend is
uncertain as austerity measures implemented by the government to solve the public finance crisis may curb demand growth.
Imported natural gas (LNG) is the fuel of choice for new generation capacity.
Gas
* Gas was only introduced into Greece's energy mix in 1996. Demand has been driven largely by the growth of gas-fired power generation
(currently accounting for over 70% of all gas demand).
Demand peaked in 2008 at 4.2 billion cubic metres (Gm³) before the recession took hold. Uncertainties about demand growth hinder
suppliers' efforts to plan ahead future market needs, in order to conclude long-term supply contracts with their suppliers. It also hinders
investment decisions and the ability to secure project finance. The State owns 65% of the public gas company (DEPA). Following the
liberalization of the Greek gas market, DEPA’s market share declined in the face of increased competition. DEFSA operates the highpressure gas transmission system (TSO) and LNG import terminal. For now, it is a 100% subsidiary of DEPA but the two companies
should be fully unbundled before the end of 2011. The State will retain full management rights and control of DEPA.
Prometheus Gas, a joint venture between Gazprom's subsidiary Gazexport and Greece's Kopelouzous Group, has the right to develop and
supply the Greek market with 3 Bcm of gas annually until 2016 and 7 Bcm of gas annually thereafter.
* Regional hub : The Greek government (through DEPA) has a 50% stake in the ITGI project to bring Azerbaijani gas across Turkey and
Greece for delivery into Italy together with Italian energy company Edison (50%). The current financial crisis raises some doubts over the
project's financing.
A rival project - the Trans Adriatic Pipeline (TAP) - is also looking to bring Caspian and Iranian gas delivered at the Greece-Turkey border
through Greece and on Italy. Either project would boost Greece's supply diversity.
DEPA, Edison and Bulgaria's state-owned gas monopoly BEH have also formed a venture to build a €120m pipeline linking the two
countries, with first gas scheduled for 2013. The 1Gm³/year pipeline aims to reduce Bulgaria's dependency on Russian gas by tapping
supplies from the Caspian region, as well as LNG via Greece. Industry observers say the interconnector could provide an alternative for up
to 30% of consumption in the country. To this end, DEPA plans to construct a new offshore LNG terminal in Kavala, northern Greece.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
100
98
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste landfilled
5,386
81.3%
Despite pressures from international lenders, the Hellenic State seeks to remain a dominant player in what it calls public goods by
maintaining a 51% controlling stake after the partial privatization plans. Greece also explores the possibility of including EYATH, EYDAP
and other regional utilities into a holding company (Hellenic Waters S.A).
Water :
The state currently owns 74% of Thessaloniki Water utility (EYATH), 23% of which will be sold. A complete separation of existing network
infrastructure is proposed.
Waste :
61% of Athens Water and Sewage utility (EYDAP) shares are currently owned by the State that plans on selling 10% of its holdings and on
implementing further separation of networks.
Last update: September 2011
ITALY
POLITICAL BACKGROUND
Type of government: Parliamentary Democracy
Prime Minister: Silvio Berlusconi (People of Freedom - PdL)
Elected in 2008
Next poll in 2013
Key Ministers: Minister of Economic Development, in charge of energy: Paolo Romani (PdL)
Minister in charge of environment: Stefania Prestigiacomo (PdL)
Parliament: Chamber of Deputies (630 seats) - Senate (315 seats)
Elected in 2008
Next poll in 2013
COUNTRY RISK
Strong capacity to meet financial commitments,
but somewhat susceptible to adverse economic
conditions and changes in circumstances.
Very high economic, institutional or government
financial strength and no material medium-term
repayment concern. [Eurozone's ceiling]
A
Standard & Poor's
A2
Moody's
The likelihood of a default in payment is low,
political and economic environment is favourable
but business environment may have some
deficiencies.
A3
COFACE
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
SECURITY RISK
B
Control Risks 2010
L
Low
0
Overall
ECONOMIC OUTLOOK
60.6 Urban population
2,107.5 HDI ranking
Business
Italy
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
Financial
World Median
Political
Exchange rate (EUR/USD): 0.74 (09/2011)
68.4%
23/169
* Given the weakening contribution from exports and the public finance crisis, GDP is expected to expand only by 0.7% only in 2011. The
demand for labor remained weak during 2011 in line with still-fragile economic activity. The private services sector is struggling to
generate any new employment opportunities, while public-sector employment at both the central and local government level is likely to
stagnate as a result of the need to curtail public spending. The general government budget deficit stands at - 4% of GDP in 2011 but it is
estimated to reduce to -1.9%.
* Italy's medium-to-long-term economic prospects are not encouraging, mainly because of weak economic growth. One main obstacle to
stronger long-term growth will be modest export performance, as Italian exports are expected to underperform the growth in the tradeweighted index of world demand for Italian products.
*There is a major risk that investors' concerns about Italy's debt burden and weak economic growth prospects will trigger a vicious circle of
rising uncertainty and spiralling interest rates, which could make debt-servicing costs unsustainable with serious consequences for Italy
and the euro zone as a whole.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
3
1,7
2
0,9
0,7
1
1,2
0
-1
4
1,6
2009
0,4
2010
2011 f
3
2,5
2012 f
-2
2,1
2,4
2
1,5
-3
-4
-5
-4,2
1
0,8
1,8
1,5
-5,2
0,2
-6
0
Italy
2009
Eurozone
Current Account Balance (% of GDP)
2010
Italy
2011 f
Eurozone
2012 f
Interest rates (%)
8
1
7
0
0,2
0,1
Short-term interest rate
6
0,1
0,0
-1
Long-term interest rate
5
-2
4
-2,0
-3
3
-4
-3,5
2
-3,9
-3,8
2011 f
2012 f
-5
1
2009
2010
Italy
2009
Fiscal balance (% of GDP)
2010
0
Eurozone
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
2012 f
0
160
-1
140
-2
120
-1,9
-3
-3,2
-4
-4,0
-5
-6
-7
-4,6
-4,2
128,9
127,8
2009
2010
128,4
2011 f
2012 f
126,8
100
80
60
-5,4
40
-6,0
-6,3
20
-8
Italy
Eurozone
Last update: September 2011
POLITICAL OUTLOOK
*Analysts expect the fall of Berlusconi's government in the coming months leading to a transitional government of national unity. The
italian Prime Minister faced several scandals related to his private life and to his management of public affairs. The ongoing economic
crisis is putting further pressure on Berlusconi and his allies to resign. Italian voters are becoming increasingly right-wing in their stance
towards immigration, a position encouraged and exploited by the ruling centre-right coalition headed by Silvio Berlusconi and including the
anti-immigration and anti-European Union (EU) Northern League (LN).
* The mafia maintains its influence in South Italia, while local authorities are often corrupt and unwilling to address the issue. Inroads were
made into the mafia's power base throughout 2008, 2009, and 2010 with arrests of high-level bosses in Sicily and southern Italy, but there
are often younger members of the organization waiting in the wings to take over. Despite some efforts by the government, the fight against
the prolific Italian mafia is unlikely to be won easily or quickly.
ENERGY OUTLOOK
Gas
56%
Electricity matrix
(installed capacity)
in 2009
Biomass
4% Oil
11%
Coal
4%
Hydro
20%
Wind &
Geothermic
5%
Electricity
(Source: Enerdata)
Capacity (2009)
106 GW
Production (2009)
Consumption (2009)
290 TWh
298 TWh
Natural gas (Source: Enerdata)
Proven reserves (2009)
51 Gm³
Production (2009)
7.9 Gm³
Consumption (2009)
64 Mtep
* The Ministry of Economic Development coordinates energy policy through the General Directorate for Energy (DGERM). ENEA is energy
public agency. Local authorities hold significant control over energy investment decisions, and are present in power and gas distribution.
* Italy has one of the lowest energy consumption per capita in developed countries, with 2.8 tep/year against 3.8 for the European Union.
* A priority of Italy's energy policy is fighting against climate change. Italy adopted a National Action Plan on Energy Efficiency 2008-2016,
which sets an energy saving objective of at least 9.6% by 2016 (that is 126 TWh). Moreover, according to the European directive on
renewable energies, Italy's objective is to increase the share of renewables to 17% of final consumption in 2020. The government thus
launched a 20.7 million euros plan to promote renewables. In 2009, production from renewable energies represented 6.8 TWh.
Electricity
* The electricity market has been liberalized in line with the European Union legislation. In 2009, the liberalized market accounted for 70%
of total electricity consumption. Enel, the former public electricity monopoly, was restructured and privatized. The regulatory authority
intends to reduce Enel's share in power production: in 2005, Enel was forced to sell 3,850 MW capacity.
* Total installed capacity was about 106 GW in 2009. Electricity production decreased to 290 TWh in 2009 (against 318 TWh in 2008).
Oil's share in electricity production is shrinking whereas gas' share reaches now 50%. Italy is the 2nd electricity importer worldwide: in
2009, it imported 47 TWh of electricity, mainly from Switzerland and France. Italy also projects to import 600.000 MWh of electricity per
year from Tunisia, starting from 2018.
* Enel remains the main actor in the electricity market. According to its 2010-2014 programme, it intends to invest 29.7 billion euros in
development and maintenance. It aims to increase its renewable energies capacity from 5.7 GW to 9.2 GW by 2014.
* With over 62,000 km of lines, Terna owns 98% of the electricity transmission grid in Italy. Other companies have emerged as significant
players in the sector of electricity generation and distribution (Edison, Enipower, Acea, Acea Electrabel, Sorgenia, E-On…).
* In January 2011, the Constitutional Court ruled that Italy could hold a referendum on the planned re-introduction of nuclear power. Over
the last three years, proposed laws by the government paved the way for nuclear development. The government was considering to build
8 to 10 nuclear reactors from 2013, in order to cover 1/4 of the country's electricity needs by 2030. Although immediately following the
Fukushima accident, the government had declared a one-year delay on nuclear plans, the referendum, held in June, strongly rejected all
of the four initiatives promoted by Mr Berlusconi.
* Italy has a large potential for solar energy. The Concentrated Solar Power (CSP) technology is promoted by Enel Green Power to reach
the government's objective of 200 MW of solar energy as set in the 2008 law. At present, the available capacity totals 100 MW. In 2007,
the government announced a new objective of 3,000 MW of photovoltaics in 2016 and in 2009 Italy announced a program of solar
incentives for 2011-2013. Italy's state renewable power market operator GSE estimates the country is likely to hit its 8 GW by 2020 solar
PV target by mid-2011.
* Italy is also the sixth largest producer of wind energy in the world (around 6.4 TWh).
Gas
* The Italian gas market is liberalized since 2003, following the European liberalization directives. ENI's share in Snam Rete Gas was
reduced to about 50%. In the beginning of 2010, ENI announced the early sale of its shares in 3 gas pipelines (89% in TAG, 100% in
TENP and 46% in Transitgas). In 2009, ENI supplied 44% of the Italian market (34.2 Gm³).
* Domestic gas production decreases since 2000, with 7.9 Gm³ produced in 2009. Imports cover 90% of gas needs: Algeria and Russia
account for 33% of gas imports each. Italy is supplied with Algerian gas through Enrico Mattei pipeline, whose capacity will be increased
to 33.5 Gm³ by 2012. Other main suppliers are Netherlands, Norway and Libya. However, in February 2011 ENI suspended supplies
through its Greenstream pipeline, which runs from Libya to Sicily and supplies 10% of Italy’s natural gas, as a precautionary measure.
Natural gas consumption is strongly rising since the 1990's (5%/year between 1994 and 2005), to reach about 85 Gm³ since 2006.
* In 2006, Greece and Italy signed an agreement to build an undersea 200-km gas pipeline (IGI project). Its capacity will increase from 3.5
Gm³ to 11.5 Gm³ in 2012 in order to allow supplies from the Caspian Sea through ITGI pipeline. ENI partners with Gazprom in South
Stream pipeline project, which aims to supply up to 63 Gm³ gas from Russia to Europe through Black Sea.
* Several LNG regaseification facilities projects are considered, as well as gas storage projects. At least 4 regasification and stockage
plants should be built.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2006)
Access to drinking water (%)
Access to sanitation (%)
100
N/A
Waste
(Source: Unstat 2007)
Municipal waste collection
32.8 million tons
Municipal waste landfilled
48.9%
Water: * Italy has one of the highest waste of water rate in Europe. Several legislative attempts were led to improve water management
since the 1990's. Galli Law aimed to reinforce municipal authorities' control over the water sector, setting up Optimal Area Authorities
(ATOs) in order to ensure a coordinated management at the provinces' level. ATOs are conceived as independent regulators, with
planning and tariff setting powers. A National Authority is also set up to monitor market developments.
* However, a decree was adopted in December 2009 to favor privatization of water sector. It makes tenders compulsory for the attribution
of the water management and limits local authorities' participation in companies responsible for water management.
* Water prices are within the lowest in Europe. Tariffs increase is considered necessary to catch up adequate investment levels.
Waste: * Italy encounters serious problems in waste management, mainly in the Southern part of the country. Berlusconi has made
substantial strides in addressing the Naples waste crisis, which has left the city buried under uncollected rubbish on numerous occasions
since 1994. The blame for the region's waste management issues is often laid at the feet of the mafia, which controls the waste
processing facilities in the area, while local authorities are often corrupt and unwilling to address the issue. The implementation of EU
directives
on
waste
management
will
open
potential
market
opportunities
for
foreign
firms.
* The amount of waste collected separately increases, reaching 31% of all Italian waste in 2008. Moreover, Italy is heading towards the
goals of the Landfill Directive in terms of reducing organic waste to landfill. The number of landfills is decreasing, but still account for 44%
of all disposal (about 32 million tons).
Last update: September 2011
THE NETHERLANDS
POLITICAL BACKGROUND
Type of government: Federal Constitutional Monarchy (parliamentary)
Head of State: Queen of the Netherlands Beatrix, since 1980
Prime Minister: Mark Rutte, since 2010 (People's Party for Freedom and Democracy - VDD)
Key Ministers: Minister of Economic Affairs (including energy): Maxime Verhagen (Christian Democratic Party - CDA)
Minister of Infrastructure and the Environment: Melanie Schultz van Haegen-Maas Geesteranus (VDD)
Parliament: Bicameral Parliament (Staten Generaal): Senate (75 members) elected by provincial assemblies and House of
Representatives (150 members), directly elected for four-year terms.
Elected in: June 2010
Next poll in 2014
COUNTRY RISK
Standard & Poor's
AAA
Moody's
Aaa
COFACE
A2
SECURITY RISK
B
Control Risks 2010
L
Highest rating, maximum security
Highest rating with minimal credit risk
The political and economic outlook are
satisfying, the business environment can
show some weaknesses but the risk of
corporate default is very low.
Low security risk
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Financial
Business
Netherlands
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP(Bn USD)
16.65 Urban population
778.2 HDI ranking
82.9%
7/169
Exchange rate (EUR/USD): 0.71 (09/2011)
* Dutch GDP could grow by 1.7% in 2011 before easing to 1.0% in 2012. In particular, consumer spending remained muted and exports
lost some momentum. Business confidence sank deeper into negative territory in August, falling to its lowest level since spring of 2011.
Furthermore, consumer sentiment has also declined markedly during July–August, falling to a two-year low in August. High oil prices, stock
market turbulence, slower global growth, tightening fiscal policy, and a gradual rise in interest rates are likely to take a toll on growth in the
near term. Thus, we expect GDP growth to slow to only 1.0% in 2012.
* The fiscal position has deteriorated in 2009–After three years of budget surpluses, the Dutch budget moved into deficit of 5.5% of GDP in
2009 and remained at a similar deficit of 5.4% of GDP in 2010. This is far above the 3.0%-of-GDP ceiling stipulated by the EU's Stability
and Growth Pact. The government debt is also set to rise in the near term while the government pumped in more than EUR 31 billion either
to buy or to shore up struggling banks and insurers in 2008.
Real GDP Growth (%) change from a year earlier
3
1,7
2
CPI Inflation (%) change from a year earlier
4
1,7
1,0
1
1,6
1,6
0,9
0
-1
2009
2010
2011 f
2012 f
3
2,4
2,0
2
2,1
1,5
-2
1,8
-3
-3,5
-4
-4,2
1
1,2
1,3
0,2
-5
0
the Netherlands
2009
Eurozone
Current Account Balance (% of GDP)
8
7
6
5
4
3
2
1
0
-1
2010
2011 f
the Netherlands
2012 f
Eurozone
Interest rates (%)
6
7,2
5
4,9
4,9
Short-term interest rate
Long-term interest rate
4
4,4
3
2
0,1
0,2
0,0
0,1
2009
2010
2011 f
2012 f
1
0
the Netherlands
Eurozone
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
0
-2
-3,2
-4
-4,2
-6
-5,2
-5,4
-5,5
-6,3
-6,0
-8
the Netherlands
Eurozone
Public debt (% GDP)
2012 f
-4,7
80
78
76
74
72
70
68
66
64
62
60
74,3
75,2
71,4
67,6
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Bumpy Ride for Minority Government: In the wake of the 2010 snap parliamentary election, a minority coalition was formed between the
election winner, the People's Party for Freedom and Democracy (VVD), and the former government leader, the Christian Democratic
Appeal (CDA). Together, these two parties control only 52 seats in the lower house of parliament, and Prime Minister Mark Rutte of the
VVD is relying on "silent" co-operation with the opposition far-right Freedom Party (PVV) to push through legislation and ensure the
administration's continuity. Concerns about the government's longevity linger, especially as the fundamental ideological differences
between the conservative CDA and populist PVV could trigger internal disputes and disunity in the future.
* The coalition might now seek the tacit support of other small Senate parties, but the failure to secure an outright parliamentary majority
could still act as a restraint on the government's agenda, which above all includes budget cuts and retirement age increases.
ENERGY OUTLOOK
Coal
13%
Electricity (Source: Enerdata)
Capacity (2009)
26 GW
Production (2009)
112 TWh
Consumption (2009)
108 TWh
Oil
3%
Biomass
4%
Nuclear
2%
Gas
68%
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
Wind
10%
Electricity matrix
(installed capacity)
in 2009
50 TCF
3,008 BCF
1,878 BCF
* The new Dutch right-wing government has announced a radical overhaul of Dutch energy policy. It is cutting subsidies for most forms of
renewable energy drastically, and is even putting an end to all subsidies for offshore wind, solar power and largescale biomass.
It has also announced a warm welcome for new nuclear power stations.
Electricity
* Since January 2007, the electricity market is fully liberalized. There does not exist any longer regulated tariffs. Patrimonial unbundling of
network management, production and distribution activities should be achieved in 2011.
* 112 TWh of electricity were produced in 2009, of which 91% come from thermal plants (22 GW capacity).
* There are three main electricity production companies: Essent (6,000 MW capacity - 24% of total), GDF SUEZ (Electrabel) (4,100 MW
capacity - 16% of total) and Nuon (3,750 MW capacity - 15% of total).
* Governmental policy pursues diversification in electricity generation away from gas and oil towards other sources of energy. More than 8
plant projects have been announced since 2006, in order to make up for the lack of domestic capacity. Thus, about 13 GW of additional
capacity has been anounced by 2014. Various projects are oriented towards coal-fired power plants.
* The new Electric Law provides subsidies for electricity production from renewable energies. The government intends to facilitate the
installation of wind farms: it aims to reach 6 GW of installed capacity by 2020. Shell and Nuon inaugurated the first offshore wind farm in
the Netherlands (108 MW) in 2007.
* The closure of Borssels plant (the only nuclear plant in the country) has been postponed to 2033 (instead of 2013).
Gas
* The Netherlands have very important gas reserves (1,222 Gm³ in 2009), and one of the biggest gas field in the world, in Groningue (1,094
Gm³). However, gas reserves are strongly decreasing. Gas production varies significantly. It was 80.2 Gm³ in 2009. Natural gas accounts
for 45% of the country's energy needs and ensures an independence rate of 83%.
*Since January 2004, the gas market is fully liberalized. Gasunie, former national gas company, has been divided into two companies: one
dealing with the transport network, and an other dealing with sales activities (GasTerra). The number of players on the gas wholesale
market has increased from 8 to about 70 players since 2001. GasTerra controls 70% of available gas.
* The Dutch government issued the Energy Report 2011 that continues to give gas a prominent role in Dutch energy policy. The following
points are of importance in this Report :
• The Netherlands' position as a gas hub is further strengthened: Maintain small fields production level of 30 Bcm, Facilitate gas storage,
optimize and increase cross border transport capacity, increase gas knowledge development, elaborate future role of GasTerra (possibly
GasTerra continuous its role as trading house)
• Support for offshore CCS and Green Gas technology
• Further research on potential and environmental effects of unconventional gas (but no public support today)
• Getting prepared for changing gas composition (due to LNG, Nordstream, …)
• Active energy diplomacy
• Minority interest in Gasunie potentially for sale
* The main objective of the government's gas policy is to reorganize the market to favor competition and reach energy security objectives.
The country aims to play a central role in Europe in gas trade, developing its LNG imports and gas pipelines infrastructure. Gasunie holds a
9% share in Nord Stream pipeline (55 Gm³) which will provide gas from Russia. A LNG terminal is under construction in Rotterdam and the
first delivery expected on July 2011. Vopak and its partner NIBC European Infrastructure Fund (NEIF) have established a joint venture to
build and operate another storage terminal in Eemshaven. It is expected to be commissionned in 2013.
ENVIRONMENT OUTLOOK
Water (Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
100
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste collection (%)
10,159
100
Water: * Responsibility for water management and for protecting residents for flooding is largely allocated to the 26 Waterschappen
(regional water authorities or water boards). Sanitation is the joint responsibility of municipalities, while water supply companies ensure the
delivery of drinking water. Groundwater is the responsibility of the provinces.
* The Netherlands rarely face water shortages, as they have high water resources thanks to the presence of large rivers as the Rhine or the
Meuse. Only 9% of the total annual renewable water resources is used.
* The focus of the Dutch water policy for the 21st century is the control the storage of excess water in reservoirs that are created in urban
and rural areas, during periods of high water levels.
Waste: * The waste market is still growing in the Netherlands, generating over 60 million tons/year. Landfill taxes are used to encourage
recovery or incineration of waste flows. Household waste collection is under the responsibility of local authorities. 83% of the existing waste
is treated and recycled. The Ministry of Finance wants now to abolish the landfill tax as waste management infrastructure is in place
(overcapacity) and land filling is close to zero. Strong reaction against it from collectivity of waste managers (best steering method ever
implemented and might destabilize fragile balance in market).
Last update: September 2011
NORWAY
POLITICAL BACKGROUND
Type of government: Parliamentary democracy under Constitutional Monarchy
Head of State: King Harald V
Prime Minister: Jens Stoltenberg (Labor) since 2005
Key Ministers: Minister of Petroleum and Energy: Ola Borten Moe
Minister of the Environment and International Development: Erik Solheim
Parliament: The Storting (Stortinget) with 169 seats
Elected in September 2009
Next poll in September 2013
COUNTRY RISK
AAA
Standard & Poor's
Highest rating, maximum security
Highest rating with minimal credit risk
Aaa
Moody's
Highest rating. The political and economic
situation is good. The business climate is
favorable. Corporate default probability is
very low.
A1
COFACE
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
SECURITY RISK
B
Control Risks 2010
I
0
Insignificant
Overall
Financial
Norway
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
4.88 Urban population
77.6%
Exchange rate (NOK/USD): 5.38 (09/2011)
Nominal GDP (Bn USD)
412.8 HDI ranking
1/169
* The Norwegian economy is expected to strengthen gradually, after bouts of recession in 2008-10. The annual average real GDP growth is
forcasted to be about 1.5% in 2011-15, after weak growth of 0.3% in 2010. Norway’s substantial sovereign oil wealth will continue to
provide a buffer to cushion the economy in times of distress without creating either an external payments imbalance or the budget deficit
and debt problems now prevalent in other countries. Nonetheless, growth will be weaker than in the decade up to the recession, also
curbed by the trend fall in petroleum output.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
3
3
1,6
1,9
2
1,0
0,9
0
-1
-2
2,2
1,7
1
2,4
2
0,3
2009
2010
2011 f
1,5
2012 f
2,4
1,9
1,5
1,8
-1,6
1
-3
-4
-4,2
0,2
-5
0
Norway
Eurozone
2009
2010
Norway
Current Account Balance (% of GDP)
2012 f
Eurozone
Interest rates (%)
8
20
7
15
Short-term interest rate
6
10
2011 f
11,8
12,4
10,3
10,1
Long-term interest rate
5
4
5
3
0
2
0,1
0,2
0,0
0,1
2009
2010
2011 f
2012 f
1
-5
Norway
Eurozone
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
13
10
2010
10,8
10,7
10,7
2011 f
Public debt (% GDP)
2012 f
10,6
7
4
-2
-8
-4,2
-6,3
-6,0
Norway
Eurozone
56,1
-3,2
48,0
2010
51,2
49,5
2009
1
-5
100,0
90,0
80,0
70,0
60,0
50,0
40,0
30,0
20,0
10,0
0,0
Doc.Id: EPN-MGMT-A-EN-000315
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Municipal and county elections were held in Norway on September 12, 2011. The ruling Labor Party won 33.2 % of the vote and had its
best local election result in more than two decades. The Conservatives were supported by 27.7% of the voters while the anti-immigrant
Progress Party plummeted in support from 18.5 % in 2007 to 11.8 this year, two months after attacks by a right-wing fanatic killed 77
people.
* The government’s centrist programme focuses on supporting employment, environmental policies and reforms to education and
healthcare. Following the terrorist attacks in July 2011, more resources will be devoted to policing.
* Despite the positive overall relations with the EU, Norway's EU membership is still not on the government's agenda. Norway is as
integrated in EU policy and economy as a non-member state can be; also being able to participate in a number of EU programmes,
including trade, environment, education, and research.
ENERGY OUTLOOK
Wind
1%
Gas
4%
Biomass
0,3%
Electricity
(Source: Enerdata)
Capacity (2010)
32.7 GW
Production (2010)
Consumption (2010)
Electricity matrix
(installed capacity 2010)
Natural gas
Hydro
94%
124 TWh
120 TWh
(Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
82 TCF
3,756 BCF
233 BCF
Electricity
* Norway's power installed capacity is 32.7 GW (2010), of which 94% is hydropower. Electricity production reached 124 TWh in 2010.
Norway is the 6th world largest hydropower producer with more than 100 hydro power plants (from 1 MW to more than 1200 MW per unit).
The country's 2 main hydro power plants are Kvilldal (1240 MW) and Tonstad (960 MW).
* According to IEA, Norway's electricity installed capacity should reach 36.7 GW in 2020 and 38.5 GW in 2030. At that time, hydro would
represent 83% of installed capacity, while natural gas and wind energy would respectively increase up to 5% and 11%.
* In June 2009, the Norwegian government presented an offshore renewable energy act. It is intended to provide a unified legal framework
for the construction and operation of facilities for offshore power production from renewable energy resources in Norwegian territorial
waters and on and above the Norwegian Continental Shelf. The draft Act establishes procedures for the opening of offshore areas for
power production and for the award of production licenses and transmission licenses. It is currently examined by the Norwegian Parliament
and will be revised in 2012.
* The state and local authorities own 85% of the Norwegian power sector. The money they make goes towards public services. The power
industry administers around 5% of the capital goods in onshore Norway. About a half of the sum paid by electricity customers goes to the
state in the form of taxes. Around 10% goes to the owners in the form of dividends.
Gas
* Norway, the largest holder of natural gas and oil reserves in Europe, provides much of the oil and gas consumed on the continent. In fact,
in 2010, Norway was the second largest exporter of natural gas in the world (after Russia). In 2010, crude oil, natural gas, and pipeline
transport services accounted for almost 50% of Norway's exports value, 21% of GDP, and 25% of government revenues according to the
Norwegian Petroleum Directorate (NPD).
* Although Norway's oil production peaked in 2001 at 3.42 million barrels per day (bbl/d) and declined to 2.13 million bbl/d in 2010, natural
gas production has been steadily increasing since 1993, reaching 3.76 trillion cubic feet (Tcf) in 2010.
* Norway's single largest natural gas field is Troll, which produced 0.886 Tcf in 2010, according to the NPD, representing about one-quarter
of Norway's total natural gas production. The three other largest producing fields in 2010 were Ormen Lange (0.664 Tcf), Asgard (0.381
Tcf), and Sleipner Ost (0.265 Tcf). These 4 fields accounted for about 60% of Norway's total natural gas production.
* Statoil (66,9% owned by the Norwegian state) dominates natural gas production in Norway. Several international majors, such as
ExxonMobil, ConocoPhillips,Total, Shell, and Eni also have a sizable presence in the natural gas and oil sectors.
* State-owned Gassco is responsible for administering the natural gas pipeline network. The company also manages Gassled, the network
of international pipelines and receiving terminals that exports Norway's natural gas production to the United Kingdom and continental
Europe.
* The historic agreement between Norway and Russia, which defined their maritime boundaries in the Barents and Arctic Seas and
resolved their 40-year old dispute, was fully ratified by both governments in early 2011 and went into effect in July 2011. The agreement
requires the two countries to jointly develop oil and gas deposits which cross over their boundaries, a 176,000 square kilometer maritime
area which straddles their economic zones in the Barents and Arctic Seas.
* Gjoa oil and gas field, developed by Statoil and GDF SUEZ, began production in January 2011. Located in the North Sea, Gjoa has a
daily production capacity of 600 million cubic feet of gas and 87,000 barrels of oil. The gas is transported directly via pipeline to St. Fergus,
Scotland, while the oil will be transported to the Mongstad refinery through the Troll II pipeline. The field is expected to be in production for
at least the next 15 years, but the installations are designed for an operating life of 30 years. For the first time in the offshore oil and gas
industry, the floating platform is fully powered by electricity from the mainland. The Gjoa platform opens a new area in the North Sea for
production, and its infrastructure will be a hub for future developments.
* According to Cedigaz estimates, in 2010, shipments of Norwegian LNG totaled 138 Bcf, up from 112 Bcf in 2009. OECD European
countries received about 74 percent of the total, with Spain importing almost half of that. The United States imported about 5 percent or
26.8 Bcf. Norway has long-term contracts with Spain's Iberderola and the U.S. company El Paso.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
100
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste collection (%)
2,269
99
Water: * Norway has a large number (1,600) of small water works and a few large works. 90% are based on surface water and 10% on
groundwater. The country has about 2,600 waste water plants. Chemical treatment (P-removal) is most usual for discharge to inland waters
and the southern coasts of Norway.
* With a long coastline and strict water quality standards, Norwegian industry has developed good and economically efficient technology for
control, filtration and purification of different water qualities. Norway’s strong maritime and oil and gas sector has inspired world class
leading technical solutions.
Waste: * Waste management is regulated in various ways, and there is an interplay between regulation at central and local levels. The
central government authorities set the general framework, leaving municipalities and industry with a relatively free hand to design local
collection and treatment solutions.
* The authorities have put in place a number of instruments (e.g. legislation, taxes, economic incentives) targeted at the municipalities,
business and industry. Their full effect is expected to increase.
Doc.Id: EPN-MGMT-A-EN-000315
Last update: September 2011
PORTUGAL
POLITICAL BACKGROUND
Type of government: Parliamentary
President: Anibal Cavaco Silva
Head of government: Pedro Passos Coelho (PSD)
Elected in: January 2011
Next poll: 2015
Key Ministers: Minister in charge of Energy: Alvaro Santos Pereira
Minister of Environment: Assunção Cristas
Parliament: Unicameral assembly: 230 seats
Elected in: June 2011
Next poll in 2015
COUNTRY RISK
Standard & Poor's
Moody's
Ba2
COFACE
Considered lowest investment grade by market
participants.
No clear and present repayment concern.
The economy's competitiveness problems,
combined with the large fiscal deficit and the high
debt levels in the private sector, would make fiscal
consolidation even more difficult.
BBB-
A4
SECURITY RISK
Control Risks 2010
B
L
Low
Country vs. World Median
(Five-year risk aggregates)
45
40
35
30
25
20
15
10
5
0
Overall
Financial
Portugal
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
10,7 Urban population (2015 f)
228,4 HDI ranking
60,7%
40/169
Exchange rate (EUR/USD): 0.73 (09/2011)
On 30th August the GoP approved a budget strategy for 2011-15 that delineated a tougher path for fiscal consolidation than envisaged by the country’s agreement
with its international creditors.
On August 12th a joint mission of representatives of the international "troika" of creditors, the European Commission, the IMF and the European Central Bank (ECB),
concluded its first quarterly review of Portugal’s progress according to the Memorandum of Understanding (MoU). The next review will take place in November 2011.
The Portuguese economy would remain in recession in 2011 and 2012.
The EUR78-billion EU/International Monetary Fund (USD112 billion) April 2011 bailout should give Portugal time to reduce deficit and introduce reforms.
The labor market is expected to deteriorate further. The unemployment rate rose sharply during the first quarter of 2011 and now stands at its highest level in 27 years
(12%). The EUR78-billion EU/International Monetary Fund (USD112 billion) bailout will not solve the Portuguese crisis. Nevertheless, it could help Portugal proceed
with its fiscal-reduction program and introduce the reforms the economy so badly needs in order to become more competitive without having to suffer the current
suffocating pressure from bond markets. External liquidity support will only be helpful as long as the public finances are put onto a sustainable path and structural
reforms are implemented. Given the nature of Portugal's economic problems, this will be challenging.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
3
1,7
4
1,6
3,2
2
3
0,9
1
1,4
0
2
1,5
-1
1
1,4
1,8
2,4
1,4
0,2
-2
-1,8
-3
-2,5
0
-2,2
-1
-4,2
-4
-5
-0,8
-2
2009
2010
2011f
Portugal
2012f
2009
Eurozone
Current Account Balance (% of GDP)
2011f
2012f
Eurozone
Interest rates (%)
2
12
0,1
0
-2
2010
Portugal
0,2
0,1
10
0,0
-4
8
-6
6
-5,8
-8
-6,8
-10
Long-term interest rate
4
-9,9
-10,9
-12
Short-term interest rate
2
-14
2009
2010
2011f
Portugal
2012f
0
Eurozone
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
Fiscal balance (% of GDP)
2009
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
2010
2011f
2012f
140,0
110,8
120,0
100,0
-3,2
-4,2
-6,3
-6,0
-6,2
-4,6
115,8
103,1
93,1
80,0
60,0
40,0
20,0
-9,1
0,0
-9,3
Portugal
Eurozone
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
The GoP coalition government is committed to austerity. Since the presentation of the general policy Guidelines of the Government
Program on June 28, the GoP has confirmed its intention to go even further than the signed MoU in what concerns State expenses : its
agenda is dominated by economic measures (increasing taxes, reducing welfare benefits, privatising state assets, …). Underlying social
tensions are much less of a concern than in other European countries. Further reductions of the scope of government will prove a
challenge for the survivability of the coalition in the longer term (beyond 2012).
Despite the apparent social and political calmness, lower-income and middleclass households have started to feel the effects of the fiscal
consolidation process (and the weak economy) on their now-falling disposable income.
The main trade union federation has scheduled a nationwide demonstration for October 1st.
The Specific Economic Policy Conditionality signed as a counterpart for the 78 bnEUR bailout, foresees potential significant regulatory
changes in electric sector, for instance, on wind energy contracts, the GoP could achieve this through a 20% reduction of FIT or through a
special tax.
ENERGY OUTLOOK
Coal
10%
Hydro
28%
Wind & Geo
22%
Electricity (Source: REN)
Capacity (2010)
Production (2010)
Consumption (2010)
17.9 GW
50,1 TWh
52.2 TWh
Electricity matrix
(Installed Capacity)
in 2010
Oil
14%
Biomass
2%
Gas
24%
Natural gas (Source: DGEG)
Proven reserves (2008)
none Gm3
Production (2010)
none Gm3
Consumption (2010)
4.2 Gm3
Electricity
The snap 5 June 2011 election brought the Social Democratic Party (PSD) to power in a coalition with the Democratic and Social CentrePeople's Party (CDS-PP). The PSD/CDS-PP alliance controls 132 seats in the 230-member parliament.The coalition is in favour of
complying with the terms of the international bailout, with both parties endorsing the agreement that aims to reduce Portugal's public
deficit from 9.1% of GDP in 2010 to 3% by 2013. As a result, the government agenda is set to be dominated by economic measures such
as increasing taxes, reducing welfare benefits, and privatising state assets, with the state water utility and the Lisbon Metro due to be sold
off in the coming years.
According to the tight deadlines set out in the bailout package, the government will need to implement around 200 measures by the end of
2011. These include difficult moves such as reducing compensation payments for dismissed workers, increasing national health charges,
and selling ""golden shares"" in the big utilities. Although the political determination to see these measures implemented exists and there
is a broad understanding among the public that they are necessary, they are likely to prove highly unpopular.
In July, the GoP announced its intention to collect a financial contribution from all regulated generation activities1 (i.e. remunerated
through a pre-established), including Special Regime Producers which cover all RES with exception to large hydro.
For wind power sector, the Government has the budgetary goal of reducing ~120M€/year from an estimated revenues of ~900M€/year. In
practice, what the Government aims is to review downwards the existing FIT contracts (excluding newest wind parks as ENEOP and
Ventinvest projects) either through a negotiated reduction of about 20% or a unilaterally implemented special tax.
Some negotiations took place in August but it appears that the GoP shall take a decision soon.
Gas
* Since 01/01/2010 the gas market is totally liberalised.
* Portugal does not have any commercial natural gas production, though there have been repeated exploration offshore attempts.
* Gas de Portugal (GdP), a wholly-owned subsidiary of Galp Energia, dominates Portugal's natural gas sector. GdP directly controls
natural gas importation, transportation, and supply, while it indirectly controls distribution through its stakes in Portugal's six regional
distribution companies.
* Portugal imports 43% of its gas from Algeria through pipelines and the rest from Nigeria as LNG.
* Sines LNG terminal is going to be extended to 2012 in order to expand his regazeification capacity to 11.8 Gm3 / year.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2007)
Waste
(Source: Unstat 2007)
Access to drinking water (%)
92.1
Municipal waste collection (%)
100
Access to sanitation (%)
74
Municipal waste generation
472 Kg/capita/year
* Water and wastewater sector features : fragmentation - weak regulatory control and oversight - too low tariffs (no incentive to invest) non-compliance. Aguas de Portugal (AdP) is the second largest water company in Iberia. It supplies water to 7 million people, around
70% of Portugal’s population and treats wastewater from 40%.
* The government has adopted a national programme of investment in distribution and water treatment for 2007- 2013. The investment
represents 1.6 bn EUR. To realise it, an EU fund for Portugal of 21.5bn EUR including 4.6bn EUR for environment and infrastructure has
been created.
* The monthly water consumption is under the European average. The Portuguese average is 208 litres by inhabitant whereas the
European average is above 272 litres by inhabitant.
* Municipal solid waste (MSW) disposal has been one of the most important environmental problems for all of the Portuguese regions.
Last update: September 2011
SPAIN
POLITICAL BACKGROUND
Type of government: Constitutional monarchy
Head of government: José Luis Zapatero (PSOE - left)
Next poll: November 2011
Elected in: March 2008
Key Ministers: Minister in charge of Energy: Miguel Sebastian
Minister in charge of Environment: Rosa Aguilar
Parliament: Bicameral Congress: Senate: 264 seats ; Chamber of deputies: 350 seats
Next poll in November 2011
Elected in: March 2008
COUNTRY RISK
Standard & Poor's
Moody's
Aa2
COFACE
High grade. Very strong capacity to meet financial
commitments.
Very high economic, institutional or government
financial strength and no material medium-term
repayment concern.
The volatile economic environment impacts the
corporate paiment behaviour. Corporate potential
defaults in payment remain acceptable.
AA
A3
SECURITY RISK
Control Risks 2010
B
L
Low
Country vs. World Median
(Five-year risk aggregates - Global Insight)
35
30
25
20
15
10
5
0
Overall
Financial
Spain
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Exchange rate (EUR/USD): 0.72 (09/2011)
Population (Million)
47,2 Urban population (2015 f)
77,4%
Nominal GDP (Bn USD)
1405.5 HDI ranking
20/169
Current GDP growth projections are very modest : 0.7% in 2011 and 0.5% in 2012, compared with a 0.1% contraction in 2010.
Government budget deficit will narrow from 9.3% of GDP in 2010 to 3% of GDP in 2015, with the government most likely missing its target
of 3% of GDP by 2013.
Spain's commitment to restoring fiscal discipline is not in question, but the government needs to remain ready to act quickly and
decisively. The risks are significant, particularly from regional and local governments struggling to deliver budgetary savings, the savings
bank sector fresh capital needs, and stalled economic recovery curtailing the upturn in tax receipts.
Near-term outlook for Spain remains volatile, In case of a global double-dip recession, Spain would be back into recession, with significant
impacts on fiscal revenue and fiscal targets.
Spain is enduring the impact of the Eurozone sovereign debt crisis. Spain's 10-year bond yield went beyond 6.0% again in early August,
the highest level since the introduction of the euro. Bond yields have since fallen after the European Central Bank resumed its bondbuying programme. Restructuring of regional banks is ongoing. With a reduction in the number of savings banks to 17 from 45, the
restructuring is entering a critical phase. Some banks must now seek capital through the markets. The overhaul has been important to
build international confidence in the industry, but risks remain elevated. The Central Bank took into administration Caja de Ahorros del
Mediterráneo in July.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
3
4
1,6
2
0,9
0,4
0,7
0
3
1,8
2
-0,1
-1
2
-2
-3
3,0
3
1,7
1
1,8
1,5
1,5
1
-3,7
-4
1
0
-4,2
-5
-1
2009
2010
Spain
2011f
Eurozone
2012f
0,2
-0,3
2009
Current Account Balance (% of GDP)
2010
Spain
2011f
Eurozone
2012f
Interest rates (%)
6
2
0
0,2
0,0
-4,6
-4,0
5
0,1
-3,6
0,1
-2
4
-4
-6
2,4
-5,2
3
-8
Short-term interest rate
Long-term interest rate
2
-10
1
-12
2009
2010
Spain
2009
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
-11
-12
-13
2011f
0
Eurozone
Fiscal balance (% of GDP)
2010
2012f
2011f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
2012f
90,0
73,6
80,0
70,0
-3,2
-4,2
-5,0
-6,0
-6,3
-6,7
62,3
2009
2010
74,8
2011f
2012f
66,1
60,0
50,0
40,0
30,0
20,0
-9,3
10,0
-11,1
0,0
Spain
Eurozone
Last update: September 2011
POLITICAL OUTLOOK
PM Zapatero has called a general election for 20 November 2011, four months ahead of schedule, hoping that PSOE leader, A
Rubalcaba, will be able to win the elections. He is popular with the public and party members and may be able to rebuild ties with workers’
unions. The general belief is a comfortable Popular Party (PP) victory in the November election, with Mr. Rajoy as PM. However, PP
programme has to be made clearer to the electorate. The PP is likely to need support from regional parties to have a parliamentary
majority; the conservative Catalan nationalists party, Convergence and Union (CiU), appear to be the ideal ally.
In the meantime, the government continues with packages of fiscal adjustment measures aimed at ensuring it meets its end-2011 deficit
target of 6% of GDP.
Regardless of the election outcome, politicians face dire economic realities : soaring unemployment and large fiscal deficits and the new
government will continue to pursue austerity measures and structural reforms.
Large-scale social unrest in Spain remains unlikely: the first widespread protests since the beginning of the economic crisis took place in
May (“Los indignados”) and more have occurred since, but these have been mainly peaceful
ENERGY OUTLOOK
Electricity matrix
Solar
5%
Nuclear
9%
Electricity (Source: Red Eléctrica de España - REE)
Capacity (2010)
97.4 GW
Production (2010)
273 TWh
Consumption (2010)
260 TWh
Hydro
19%
(Installed Capacity)
in 2010
Fuel/Gas
3%
Wind
22%
Coal
13%
Natural gas (Source: Sedigas)
Proven reserves (2010) negligible Gm3
Production (2010)
0.07
Gm3
Consumption (2010)
34.4
Gm3
CCGT
29%
Electricity
* Endesa (Enel) is the largest power generating and distributing company in Spain, with over 21,600 MW of installed generating capacity.
The company controls about half of the regulated electricity market and one-third of the liberalized market. Spain's second-largest power
utility overall is Iberdrola (almost as big as Enel), though the company controls the largest share of the deregulated portion of the market
and is the largest REN generator in the country.
* The crisis has resulted in lower consumption levels since 2009 : 265 TWh (2008), 252 TWh (2009) and 260 TWh (2010).
* The electricity sector is totally open since 2003.
* National Plan for Energy Efficiency aims at 11% of energy savings by 2012.
* The development of the renewables share in the energy mix is a national objective. The government aims at a 20% share in the final
consumption of energy in 2020 (10% at present, despite a much higher installed capacity).
* Since January 2004, Spain and Portugal created the Pan-Iberian electricity market (Mibel). There has been progress towards
integration, namely, a new 400-kilovolt transmission line between the countries at Cartelle-Lindosa.
* Taking into account the growth in energy demand and on going projects, UNESA expects a total installed capacity of 99.7 GW in 2013.
Power producers have appealed to the authorities to obtain permission in order to extend existing nuclear plant life expectancy from 40 to
60 years.
* REE, the transmission operator, has a strategic plan for 2010-2014 aiming at investing 4 billion euros in transmission network in order to
increase connexion capacities with France and Portugal and to integrate new production capacities, like renewables.
Gas
* Spain is one of Europe’s largest LNG importers. There are three new LNG regasification terminals proposed for Spain that are in various
stages of the planning process, in Tenerife, Islas Canarias, and El Musel, in the Asturias region of Spain.
* 2/3 of the gas consumed in Spain are imported as LNG. The rest is supplied from Algeria and Norway through pipelines.
* The largest natural gas supplier in Spain is Gas Natural (GN). Enagas operates most of Spain's domestic natural gas transportation
system, controlling 7200 km of pipelines, consisting of three main trunk lines that connect the six iberian regazification LNG plants. The
country also benefits from two international import pipelines : Trans-Pyrenean pipeline which imports natural gas from Norway via France
and Maghreb-Europe Gas- MEG which connects Algeria's Hassi R'mel gas field with Cordoba, Spain, via Morocco. The gas pipeline
Medgaz, a second link between Algeria and Europe, started operating in April 2011.
* Gas Natural new strategic plan fixes the objectives for 2012 in the achievement of 22 million points of supply worldwide, in a higher than
20% of dual-fuel clients in Spain and in 15.3 GW of installed capacity in 2012 (after the disinvestments agreed with the CNC). For the
2010-2012 period, the new plan envisages investments of 5,300 MEUR and achieving an EBITDA of more than 5,000 MEUR in 2012,
which will involve accumulated annual growth of EBITDA of 5%.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2009)
Access to drinking water (%)
Access to sanitation (%)
96
91
Waste
(Source: Unstat 2009)
Municipal waste treated (%)
Municipal wastecollection
70
2.6 Mt/year
* Water management remains an issue, because of its uncontrolled use in agriculture and unequal repartition between the country's
regions.
* Water market size: about 4.5 billion EUR, 45% managed by the private sector.
* 80% of the waste collection market is done by private sector.
* Investments are needed in order to normalise the waste sector (illegal dumping grounds, no incentives for waste production reduction).
Last update: September 2011
UNITED KINGDOM
POLITICAL BACKGROUND
Type of government: Constitutional Monarchy (parliamentary)
Head of State: Queen Elizabeth II, since 1952
Prime Minister: David Cameron, since May 2010 (Conservative)
Key Ministers: Secretary of State for Energy and Climate Change: Chris Huhne (Liberal Democrat)
Secretary of State for Environment, Food and Rural Affairs: Caroline Spelman (Conservative)
Parliament: Bicameral; the House of Commons has 650 members directly elected on a first-past-the-post basis (lower
Chamber); Conservative Party (307 seats), Labour Party (258 seats), Liberal Democrats (57 seats), Others (28
seats) Next election: May 2015
COUNTRY RISK
Standard & Poor's
AAA
Moody's
Aaa/STA
COFACE
A3
B
SECURITY RISK
Control Risks 2010
Highest rating, maximum security
Highest rating with minimal credit risk
The economic environment is favorable.
Average default probability is low.
L
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Low
Financial
United Kingdom
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
62.25 Urban population
2,244.6 HDI ranking
90.1%
26/169
Exchange rate (GBP/USD): 0.63 (09/2011)
* Figures from the Office of National Statistics (ONS) show that the growth of the UK economy slowed in the second quarter, with GDP
growing by 0.2%, following 0.5% growth in the previous three months. Transport, storage and communication contributed particularly
strongly to the growth of the services sector. Production fared less well, contracting 1.4% from the previous quarter, with mining and
quarrying down 6.6%. For the supply/retail & service activities of GDF SUEZ’s business, we continue to see a particularly price driven
market and a reduced appetite to invest in projects with medium or long-term ROI’s.
Although the UK inflation rate fell unexpectedly in June, with the Consumer Prices Index (CPI) measure dropping to 4.2%, it is expected
the impact of recent energy and food price increases to see this rise in Q3. Deficit reduction, spending cuts continue to dominate the
political landscape.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
5
3
1,5
4
1
1,4
2009
2010
2011 f
3,3
0,9
1,0
0
-1
4,4
1,6
1,7
2
2012 f
-2
3
2,5
2,2
2
1,5
2,4
-3
-4
-5
1,8
-4,2
1
0,2
-4,9
0
-6
2009
UK
Eurozone
2010
UK
Current Account Balance (% of GDP)
2011 f
2012 f
Eurozone
Interest rates (%)
5
0,5
0
0,2
0,1
-0,5
0,1
0,0
Short-term interest rate
4
Long-term interest rate
-1
3
-1,5
-2,2
-2
-1,7
-2,2
-2,5
2
-3,2
-3
1
-3,5
2009
2010
2011 f
UK
Eurozone
2012 f
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
-11
-12
2010
2011 f
-3,2
-4,2
-6,0
-6,3
-7,0
-8,5
-10,2
-10,9
UK
Eurozone
Public debt (% GDP)
2012 f
100
90
80
70
60
50
40
30
20
10
0
88,5
93,3
82,4
72,4
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The Conservative-Liberal Democrat governing coalition has a solid majority in Parliament. Fiscal austerity and economic weakness will strain
relations, but it would be a major gamble for either party to trigger an early election. Pressure on the Lib Dems to defend their identity will see a less
compromising and more divisive form of coalition politics. Politics has returned to normal, after the brief period of rioting and looting in English cities
that prompted the recall of parliament in August. However, political instability could increase if the fallout from News of the World 's phone-hacking
scandal spreads further.
* Efforts to shrink the UK's largest-ever peacetime budget deficit will dominate policy debate. A dramatic five-year fiscal tightening programme will
entail tax rises and the deepest sustained period of public spending cuts since the 1940s.
The austerity plan has eased investor concerns over fiscal sustainability, but a combination of prolonged weak activity, high inflation and a
deterioration in industrial relations will cause clear slippage from the deficit-reduction targets.
ENERGY OUTLOOK
Biomass Nuclear
12%
2%
Electricity matrix
(installed capacity)
in 2009
Hydro Oil
5% 7%
Coal
34%
Electricity (Source: Enerdata)
Capacity (2009)
87.1 GW
Production (2009)
372 TWh
Consumption (2009)
325 TWh
Wind &
Geothermic
5%
Natural gas (Source: EIA)
Proven reserves (2010)
10 TCF
Production (2010)
1,988 BCF
Consumption (2010)
3,329 BCF
Gas
35%
* The country's oil and gas reserves are depleting fast. Oil, coal and gas production are decreasing too.
The new energy white paper issued in July 2011 has three principal objectives: - tackling barriers to investment in energy efficiency
- enhancing energy security
‐ ‐
- enabling investment in low carbon energy supplies.
The policy is based on four elements that are 1) The carbon price floor announced in the March Budget 2) Feed in tariffs for renewables and new
‐
nuclear, through contracts for differences (FiT CfD) 3) An emissions performance standard (EPS) to stop new coal stations being built without carbon
capture and storage 4) A capacity remuneration mechanism to ensure sufficient generation is built to cover peak demand and back up intermittent
renewable.
Electricity
* Electricity market was liberalized in 1989. By 2008, 52% of households had changed energy provider. There are now 43 power producers and 15
distribution companies. EDF Energy is the biggest energy producer since the acquisition of British Energy (2009).
* Total installed capacity was 87.1 GW in 2009. The share of cogeneration increases (5,500 MW in 2009 - 7% of the electricity produced in the
country).
* Renewable energies are a central part of the government's climate change policy. Britain is aiming by 2020 to have 30 percent of its electricity
produced from renewable sources such as wind, marine, and biomass energy (66% wind, 22% biomass). The UK government has introduced
regulations that require electricity distributors to source a portion of their electricity supply from renewables. Investments in wind power have increased
substantially: the government's objective is to reach 7,000 wind mills by 2020 (of which 3,000 offshore for a 34 GW capacity).
* Nuclear : The government has pushed ahead with plans for new nuclear power plants in the UK, as it confirmed a list of eight sites where the next
generation of reactors can be built. Among them 2 for EDF Energy and Sellafield, in Cumbria for NuGen (GDF SUEZ and Iberdrola). There are
currently ten nuclear power stations across England, Scotland and Wales, providing around 13% of the electricity consumed in the UK. By 2025 all but
one of these power stations will be closed down as they reach the end of their expected working lives. In 2009, the government announced the
construction of 10 new nuclear plants by 2025, for a total capacity of 16 GW. Over the next two decades, some aging nuclear power plants will
gradually close. New nuclear generation plants will be built in their place. The first of a new generation of plants may be up and running by 2018.
Gas
* The liberalization of the gas market began in 1986 with the privatization of the public monopoly British Gas, and was completed in 1998. The main
gas producers are ExxonMobil (6.1 Gm³ in 2009), BP, Total, Shell, British Gas and Centrica.
* The UK gas reserves and production are decreasing. It is expected that 80% of its gas consumption will be covered by imports in 2020. Gas
production is rapidly falling, reaching 62.8 Gm³ in 2009 (against 114 Gm³ in 2000). As a consequence, the UK is a gas importer since 2004, and gas
imports are strongly increasing, reaching 41 Gm³ in 2009, mainly from Norway (58%). The UK are expected to be 80% dependent on imports by 2020.
* Natural gas consumption increased sharply in the 1990's, and stabilized at around 100 Gm³ in the 2000's. In 2009, it decreased by 8%, due to the
economic crisis.
* 3 gas pipelines link the UK to continental Europe, allowing gas imports to Britain. There are 4 LNG terminals in the UK, of which two were
commissioned in 2009. Moreover, there are 6 underground gas storage sites in the country, for a total capacity of 4.4 Gm³.
* Several infrastructure projects are ongoing to ensure gas supplies, of which LNG terminals extensions and the construction of a new floating terminal
by 2013 (8 Gm³/year capacity). Gas storage infrastructures are considered as well as the exploitation of new gas fields.
ENVIRONMENT OUTLOOK
Water (Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
100
(Source: UNData 2009)
Municipal waste generated (Mt)
Municipal waste collection (%)
32,600
100
Water * The water sector was privatized in 1989 in England and Wales. Water and wastewater services remain under public ownership in Scotland
and Northern Ireland. Each day the UK water industry abstracts, treats and supplies nearly 19 billion litres of water to domestic and commercial
customers, and collects, treats and returns to the environment over 10 billion litres of wastewater. The UK water industry is made up of 12 water and
sewerage service providers and 14 main water suppliers.
Waste * The UK waste management market is highly fragmented. There are about 4,000 companies in the waste management or recycling sector.
The largest waste management company is Veolia (1.2 billion pounds turnover in 2008), followed by Biffa and Sita.
* Each region in the UK has set performance targets for the recycling and composting of household waste. England thus targets to reach 50% of
waste recycled and composted in 2020. The government issued a regulation for the collection and recycling of batteries.
* The government aims to reduce municipal waste sent to landfill (objective of 35% by 2020). All hazardous waste has to be treated before it is sent to
landfill. The tax on waste sent to lanfill will increase and the government is considering to ban certain materials from landfills.
Last update: September 2011
CZECH REPUBLIC
POLITICAL BACKGROUND
Type of government: Parliamentary Republic
Prime Minister Petr Necas (Civic Democratic Party - ODS)
Appointed by the President in June 2010
Key Ministers: Minister of Industry and Trade, in charge of energy : Martin Kocourek (ODS)
Minister of Environment: Tomáš Chalupa (ODS)
Parliament: Bicameral Congress: Chamber of Deputies (200 MPs) and Senate (81 senators)
Elected in: May 2010 (Chamber of Deputies), October 2010 (Senate)
Next poll in May 2014 (Chamber of Deputies), October 2012 (27 senators)
COUNTRY RISK
Very strong capacity to meet financial
commitments
(Five-year risk aggregates)
A1
Upper-medium-grade, low credit risk
35
A2
The business environment is strongly
dependent on the economic situation of
European Union. Corporate payment
behaviour have been affected by recent
difficulties.
AA-
Standard & Poor's
Moody's
Country vs. World Median
30
COFACE
SECURITY RISK
Control Risks 2010
B
L
25
20
15
10
5
0
Overall
Low
Financial
Czech Republic
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
10.5 Urban population (2010)
73.5%
Exchange rate (CZK/EUR): 24.46 (09/2011)
Nominal GDP (Bn USD)
191.9 HDI ranking
28/169
* Czech economic risks relate mainly to external factors, as the country is highly export dependent. Reducing budget deficits ranks as the
country's greatest economic challenge for the next several years, key to ensuring strong economic growth over the longer term. Although
the Czech Republic may meet the Maastricht fiscal criteria sooner than expected, euro adoption may still be delayed because of political
skepticism; The Czech Republic's long-term prospects are relatively promising, thanks to modest external debt, an educated workforce,
and close proximity to Germany and Austria. The country ranks among the richest of the former communist states that acceded to the
European Union in 2004.
Real GDP Growth (%) change from a year earlier
3
1,7
1
-1
2009
2010
CPI Inflation (%) change from a year earlier
4
2,3
2,2
3,0
3
1,6
2011 f
2012 f
2,6
2,4
0,9
2
1,8
1,5
1,0
-3
-5
1
-4,0
0,2
-4,2
0
Czech Republic
2009
Eurozone
Current Account Balance (% of GDP)
3
6
0
-3
0,2
0,1
2012 f
Eurozone
5
0,1
0,0
2011 f
Short-term interest rate
Long-term interest rate
7
1
-2
2010
Czech Republic
Interest rates (%)
8
2
-1
1,8
1,5
4
-2,5
3
-4
-2,8
-3,2
-2,7
2011 f
2012 f
2
1
-5
2009
2010
Czech Republic
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Eurozone
Fiscal balance (% of GDP)
2009
2010
2011 f
Public debt (% GDP)
2012 f
0
100,0
-1
80,0
-2
42,4
-3,5
-5
-7
-4,4
-4,7
-4,2
-3,2
2010
50,8
46,6
2009
-4
-6
49,3
60,0
-3
40,0
20,0
0,0
-5,9
-6,3
-6,0
Czech Republic
Eurozone
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Czech politics among the least predictable in Europe: The political arena is dominated by moderate centre-left and centre-right parties,
but the smaller parties often play kingmakers and exert significant influence over government policy.The centre-right, three-party coalition
that emerged after the 2010 poll holds a strong parliamentary majority and is therefore very likely to remain in place for the years to come.
In 2011, corruption scandals implying 6 ministers caused big concerns among the country.
ENERGY OUTLOOK
Nuclear
19%
Wind &
Geothermic
4%
Hydro
12%
Biomass 1%
Oil 0.3%
Electricity (Source: Enerdata)
Capacity (2009)
17.9 GW
Production (2009)
82.3 TWh
Consumption (2009)
57.2 TWh
Gas
6%
Electricity matrix
(installed capacity)
in 2009
Coal
58%
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
N/A TCF
7 BCF
329 BCF
* Energy security. The Czech Republic holds only minor hydrocarbon reserves and is consequently heavily dependent on gas imports,
primarily from Russia, to meet its needs. The country is seeking to diversify its energy import sources with a particular focus on sourcing
additional supplies from Norway, and to encourage the development of gas storage facilities. High penetration of gas in the residential
sector: the 3rd most important gas market in Central Europe
Electricity
* Czech demand for power fell by 5.5 percent in 2010 owing to the recession and is expected to grow moderatly in 2011.
• Generation in Czech Republic is driven predominantly by coal, which accounts for about 70 % of supply. The next largest source of
power is nuclear energy. The major thermal plants under construction are lignite. In the long run thermal additions are expected to be split
between gas and coal. the long-term generation mix is still going to be reliant predominantly on coal and nuclear, despite the gas and
renewable additions.
• The Czech Republic has seen a solar photovoltaic (PV) boom, with installed PV capacity rising from only about 55 MW in 2008 to over
1.2 gigawatts (GW) in 2010, because of very generous feed-in tariffs. Steps were taken to stop the boom.
• The Czech market has been liberalized since January 1, 2006, but remains, dominated by the state owned Ceske Energeticke Zavody
(CEZ) that holds nearly 80 percent of capacity market share and has a cost advantage over any potential new generator.
• The Czech power market was market coupled with the Slovakian market in November 2010, increasing the efficiency of utilization of
transmission capacity between the two countries. Since then, the two power markets have achieved nearly perfect wholesale power price
convergence. Further market coupling is being discussed in Central Europe, but there are no definite plans.
* The 2004 state energy policy envisaged building two or more large reactors, probably at Temelin, eventually to replace Dukovany. In July
2008, CEZ announced a plan to build two more reactors at Temelin totalling up to 3400 MWe, with construction start in 2013 and
commissioning of the first unit in 2020.
The three shortlisted vendor groups are: a consortium led by Westinghouse; a Škoda JS/Atomstroyexport/OKB Gidropress consortium;
and Areva. Bids are expected in 2012 and the contract is to be signed in 2013.
CEZ said the Temelin contract would include an option to order up to three more reactors for other locations in the country or elsewhere in
Europe. Feasibility studies for a new reactor at Dukovany are in progress. CEZ also has a 49% share of a joint venture with Slovak stateowned Javys to build a new reactor at Bohunice in Slovakia.
Gas
* Retain transit status. The Czech Republic is keen to retain its status as a transit country for Russian energy to Europe. Around 25 % of
Russian gas exports to the EU are delivered to Europe via the Czech Republic gas transmission system. In September 2011, German
natural gas company Wingas has completed the construction of the OPAL gas pipeline, which links Russian gas giant Gazprom’s Nord
Stream pipeline via Germany with the Czech Republic.
Wingas and another German natural gas company, E.ON Ruhrgas, have invested over 1 billion euros in the OPAL pipeline.
The operator of the pipeline project is OPAL NEL Transport, a unit of Wingas, which is co-owned by Gazprom and German oil and gas
company Wintershall.
* Still in Sept. 2011, the Polish and Czech PMs , officially launched the Polish-Czech gas interconnector in Cieszyn. Tusk said the new
connection terminal is part of the strategy of providing energy security for Europe and, in the future, facilitate free trade in natural gas. "We
are counting on it to become an element of the north-south corridor, so that gas can be transported from Swinoujscie," the Polish PM said,
adding that the interconnector may also prove useful for the transfer of shale gas. The 32-kilometre pipeline was built by two operators of
the transfer network: Poland's Gaz-System and the Czech Net4gas. Initially, the interconnector will carry around 0.5 billion cubic metres of
gas per year to Poland, and in the future will allow Poland to export gas.
* Development of a traded gas market. The state-owned electricity operator OTE launched on January 1, 2010, the Czech spot gas
market. In addition to interconnections and improving gas storage access, the move supports the government’s policy of fostering
competition in the country. Although the market is largely dominated by RWE Transgas, competition is increasing with the development of
new gas traders, as GDF SUEZ.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
100
98
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste landfilled
3,310
72.2%
Last update: September 2011
HUNGARY
POLITICAL BACKGROUND
Type of government: Parliamentary Republic
Prime Minister: Viktor Orban, since May 2010 (Fidesz – Hungarian Civic Union), next poll in 2015
Key Ministers: Minister of National Development, in charge of Energy: Tamas Fellegi (no party affiliation)
Minister of Rural Development, in charge of Environment : Sándor Fazekas (Fidesz)
Parliament: National Assembly (386 seats)
Elected in: April 2010
Next poll in April 2014
COUNTRY RISK
Country vs. World Median
Standard & Poor's
BBB-
Lowest investment grade
Moody's
Baa3
Medium grade with moderate credit risk
COFACE
A4
Shaky economic outlook and a relative
volatile business environment can affect
corporate payment behaviour
B
SECURITY RISK
Control Risks 2010
L
Low
(Five-year risk aggregates)
45
40
35
30
25
20
15
10
5
0
Overall
Financial
Hungary
Business
Political
World Median
ECONOMIC OUTLOOK
* The Hungarian economy was badly hit by the economic crisis, contracting by 6.5% in 2009 and growing by 1.1% in 2010. Growth is
expected to remain weak at 1,5% in 2011. Hungary’s public debt is almost 80 percent of GDP.
* Fiscal Consolidation Is Key to Reducing Dangerous Public Debt Level: Among the countries of Central and Eastern Europe, Hungary
faces, by far, the most challenging public debt problem. This high level of public debt, combined with an elevated overall external debt,
makes the countries one of the most vulnerable to contagion from the ongoing Eurozone debt crisis. As part of its promised fiscal reforms,
the government has also committed itself to an aggressive attack against public debt. The privatisation of the pension plans was one step
in this direction. Without more sustainable fiscal reforms, a further, significant reduction of public debt will be impossible.
*Domestic demand will struggle to recover, leaving external demand the primary engine for growth. GDP expansion in the second half of
2011 was derived primarily from German demand, with Hungarian exports to that country helping push forward the entire economy. These
prospects dimmed significantly in late summer, with the revelation of the slowing German economy. Meanwhile, domestic demand is
struggling to recover, having continued to contract through the first half of the year. Domestic demand is being undermined by heavy
external debt repayment obligations that were made even more difficult by the weakness of the forint vis-à-vis the euro and Swiss franc.
With domestic demand unlikely to pick up significantly in the near future, the slowdown of external demand will likely have a more direct
impact on overall GDP growth than initially anticipated.
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
10 Urban population (2020 p)
130.4 HDI ranking
72.3%
36/169
Exchange rate (HUF/EUR): 275 (09/2011)
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
4
6
1,6
1,7
2
2009
2010
5
0,9
1,5
1,1
0
1,9
4,9
4
2011 f
4,2
2012 f
-2
4,1
3
3,2
-4
-4,2
2
-6
-6,5
1
1,5
2,4
1,8
0,2
-8
0
Hungary
2009
Eurozone
2010
Hungary
Current Account Balance (% of GDP)
2011 f
2012 f
Eurozone
Interest rates (%)
10
4
2,1
8
2,2
2
1,0
0
0,1
0,4
6
0,1
4
0,2
0,0
Short-term interest rate
2
-2
Long-term interest rate
2009
2010
2011 f
Hungary
2012 f
0
Eurozone
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
2010
2011 f
-2,8
-4,2
-4,3
-4,5
-6,3
-6,0
Hungary
Eurozone
Public debt (% GDP)
2012 f
4,1
-3,2
87,0
86,0
85,0
84,0
83,0
82,0
81,0
80,0
79,0
78,0
77,0
76,0
84,7
b
85,6
80,8
79,8
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Hungary held a parliamentary election in April 2010, and the Fidesz-Christian Democratic People's Party (Fidesz-KDNP) union has since
been towering over Hungary's politics, pushing the Hungarian Socialist Party into opposition. With over a two-thirds parliamentary majority,
the Fidesz-KDNP holds all the cards in Hungary's parliament and can change most laws at will, on paper. The union is trying to marry a
strong welfare state with a liberal economy, something the anxious public may not take to overwhelmingly well.
*The PM Viktor Orban's Fidesz (centre-right) has the strongest government mandate since the fall of communism, enabling it to pass or
amend legislation without the need for political compromise.
ENERGY OUTLOOK
Oil
Wind &
5% Geothermic
2%
Nuclear
22%
Electricity matrix
(installed capacity)
in 2009
Gas
54%
Hydro
1%
Biomass 4%
Coal
13%
Electricity (Source: Enerdata)
Capacity (2009)
8.7 GW
Production (2009)
35.9 TWh
Consumption (2009)
37.4 TWh
Natural gas (Source: EIA)
Proven reserves (2009)
0.286 TCF
Production (2010)
88 BCF
Consumption (2010)
426 BCF
* The new government has adopted a more interventionist approach to the energy sector, to have more power over end-user power prices
and to raise taxes on utilities by extending taxes previously due to retire in 2010 and introducing an extraordinary tax on utilities (1.05
percent of energy utilities’ net revenues), rather than deeper structural reforms. GDF SUEZ entities in Hungary are strongly affected by this
tax. The new approach raises concerns about future investment in power plants in Hungary.
The government is also stepping away from market liberalization, having ruled out any further privatization and instead hinting it would be
looking to buy back shares in existing utilities.
* Following the 2011 review by the International Energy Agency, the recommendations to the government of Hungary are:
- Continue to play a leading role in regional energy market integration and to build on existing regional synergies to improve security and
flexibility of energy supply.
- Provide clear guidance on its preferred options for future electricity supply; clarify the role of nuclear new build.
- Ensure predictable and attractive framework conditions for investing in energyinfrastructure.
- Intensify efforts to improve energy efficiency in all sectors, also by abolishing subsidies for energy use and replacing them with direct
support to those in need.
Electricity
* Hungary is seeing a 4.5 percent rise in power demand in 2010, despite a projected gross domestic product (GDP) rise of only 0.8
percent, because of weather effects. In the long term, power demand is expected to grow slightly more slowly than in the past, at only the
average rate across Europe.
* The Hungarian power sector remains dominated by MVM that produces about 40 percent of Hungary’s electricity and owns the country’s
sole nuclear power plant Paks. MVM also owns the transmission system operator MAVIR, the new Hungarian Power Exchange (HUPX),
and Hungary's crossborder capacity.
Gas
* Natural gas represents 46 percent of total energy consumption in Hungary. This share is expected to continue increasing up to 50
percent by 2020, as the use of solid fuel and oil products declines. Gas consumption has been significantly affected by the economic
recession, decreasing around 14 percent in 2009.
* Strong desire for supply diversity. Hungary currently depends on Russia for about 70 percent of its gas imports. This situation has
created a strong focus on security of supply in Hungarian energy policy, with the country seeking to diversify its supply sources and build
up strategic gas-storage capacity. One piece of this diversification strategy is participation in Nabucco. However, Hungary also signed an
agreement in early 2010 with Gazprom to create a joint-venture company that will build the Hungarian part of the South Stream project.
ENVIRONMENT OUTLOOK
Water (Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
100
100
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste collection (%)
4,312
92.5
Last update: September 2011
POLAND
POLITICAL BACKGROUND
Type of government: Parliamentary Republic
Prime Minister : Donald Tusk (Civic Platform - PO)
Appointed by the President on November 16th 2007
Key Ministers: Vice Prime Minister, Minister of Economy in charge of Energy: W. Pawlak (Polish People's Party-PSL)
Minister of Environment: Andrzej Kraszewski (PO)
Parliament: Bicameral Congress: Senate: 100 seats; Chamber of deputies: 460 seats
Elected in: October 2007
Next poll in October 2011
COUNTRY RISK
Standard & Poor's
A-
Strong capacity to meet financial
commitments
Moody's
A2
Upper-medium-grade with low credit risk
Country vs. World Median
(Five-year risk aggregates)
35
The political and economic outlook and a
relatively volatile business environment
A3
COFACE
can affect corporate payment behaviour.
30
25
20
15
10
5
0
SECURITY RISK
B
Control Risks 2010
L
Overall
Low
Financial
Business
Poland
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
38.3 Urban population (2020 p)
469.4 HDI ranking
62.4%
41/169
Exchange rate (PLN/EUR): 4.21 (09/2011)
* Growth momentum will level off in annual terms in 2011, but the robust pattern of the recovery will be maintained. The broad-based
pattern of economic growth in Poland will be maintained, although the actual growth pace of GDP will hardly accelerate as the stimulus
from net exports will weaken and fiscal tightening takes its toll. Nevertheless, austerity measures in 2011 will not suffocate domestic
demand, which is mainly driven by private consumption in the near term, with investment joining the fray. Fixed investment, a weak spot
on Poland’s growth scorecard in 2010, will therefore accelerate during 2011 as lending conditions ease. The UEFA football championship
in Poland and Ukraine in 2012 also will lend modest support to domestic demand. Nevertheless, private-sector spending will hardly
overheat, so Poland’s external deficit will remain manageable and widen only modestly.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
5
6
4,0
3,8
3,6
4
5
3
1,6
2
0,9
1,6
1
4
1,7
2,7
3
0
-1
2009
2010
2011 f
2,7
2012 f
2
-2
-3
4,1
3,8
1,5
2,4
1,8
1
-4,2
-4
0
-5
0,2
2009
Poland
Eurozone
Current Account Balance (% of GDP)
1
2010
2011 f
Poland
2012 f
Eurozone
Interest rates (%)
9
0
0,2
0,1
-1
0,1
0,0
-2
Short-term interest rate
Long-term interest rate
8
7
-3
6
-4
-3,9
-5
5
-4,5
-5,1
-6
2009
2010
-5,5
2011 f
4
2012 f
3
Poland
2009
Eurozone
Fiscal balance (% of GDP)
2010
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
2012 f
0
-1
-2
-3
-4
-3,4
-4,2
-5
-5,2
-6
-7
-8
-9
-6,0
-6,3
-7,3
-7,9
-3,2
58,0
57,0
56,0
55,0
54,0
53,0
52,0
51,0
50,0
49,0
48,0
47,0
56,8
55,9
55
50,9
2009
Poland
Eurozone
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The centre-right Civic Platform (PO), the country's largest political party, governs in coalition with the rural-based Polish Peasants' Party
(PSL). The government has a workable parliamentary majority, and faces an opposition divided between the conservative Law and
Justice (PiS) and several centre-left parties. The PO-PSL government is likely to survive until the next parliamentary election (October
23, 2011) subject to approval by the president, Bronislaw Komorowski. The PO has largely diluted its free-market agenda, and the
coalition should continue to be able to defuse problematic issues through compromise.
* Poland took for the first time the presidency of the EU in July 2011 untill the end of the year.
ENERGY OUTLOOK
Biomass 1%
Hydro 7%
Wind &
Geothermic
4%
Oil 1%
Gas 3%
Coal
84%
Electricity matrix
(installed capacity)
in 2010
Electricity (Source: Enerdata)
2010
Capacity (2010)
33.6 GW
Production (2010)
157 TWh
156**
Consumption (2010)
129 TWh
118*
*Source ARE (Energy Market Agency)
** Source TSO
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
6 TCF
215 BCF
607 BCF
Electricity
* Generation is dominated by 4 vertically integrated power utilities, PGE, Tauron, Energa, and Enea. New entrants have been
discouraged from entering the Polish power sector. However, to narrow the budget deficit, the government tried to sell stakes in Enea and
Energa but the process was stopped and should resume in 2012/2013.
* The EU climate regulation has put pressure on Poland to cut its CO2 emissions, a difficult task for a country that relies on coal for over
90 percent of its power generation. The government wants to cut coal’s share in total generation by as much as 40 percent in the next 20
years; but in its projections the total use of hard coal will fall between 15 and 20 percent.
*The capacity gap will be important (estimated up to 1000 MW / year during the next 20 years - some estimation put the capacity gap at
8.8 GW in 2020), due to increasing demand and to an important decommissioning program. 9300 MW of coal/gas projects are already
expected as from 2016.
Anyhow, Poland confirmed after the accident in Fukushima that it is still willing to enter nuclear activities in the medium run. The first NPP
is expected to come online in 2022 and nuclear power should account for 6000 MW in 2030-2032 (around 15% of the total installed
capacity).
Gas
* Diversification and security of supply : A LNG terminal is planned at Swinoujscie with a capacity of 5 billion cubic meters (Bcm) per
year by 2014. EU provided last October a €80 million grant for LNG's storage tanks and berth. Poland is also seeking to expand its entry
capacity at the German border with a new 3 Bcm interconnector and a 0.6 Bcm expansion (from current 0.9 Bcm) by 2011.
* Poland’s total natural gas imports in 2009 amounted to some 10 Bcm. Russia has been the principal source of natural gas imports (82%
of the imports). In October 2010 the long-term contract between PGNiG and Russia’s Gazprom of 1996 was amended. Under this new
contract arrangement, Gazprom will increase gas supply to Poland to 10.5 Bcm in 2011 and 11 Bcm from 2012. The supply contract will
end in 2022. The destination clause forbidding re-export of Russian gas to other countries was removed from the contract.
* Unconventional gas may change the gas supply picture as well as the Polish fuel mix. Its exploitation is strongly supported by the
political class and public opinion. Conventional gas production in Poland is slowly declining. Unconventional gas may have a bright future
in Poland, as the first drillings are promising . However, the timeline for production is between 10 and 15 years and the production costs
are expected to be high. Interest has grown exponentially with the signing off of 60 concessions. Resource estimates corrected upwards
(5,3tcm).
* PGNiG has a main position in both upstream and downstream sectors. It is practically the only importer of gas: it has booked nearly
100% of transportation capacity at all entry points. Being also the major domestic gas producer (98% of domestic production), it
effectively controls the wholesale gas market.
Moreover, PGNiG is the only owner and operator of the underground gas storage (USG) capacity. The regulator appointed PGNiG as the
Storage System Operator for 27 years in 2008. As part of the market reform, the gas transmission assets of the incumbent PGNiG were
ownership unbundled. An independent transmission system operator (TSO) fully owned by the state - OGP GAZ-SYSTEM - was
established in 2004. In 2007, six regional distribution companies were legally unbundled from PGNiG and granted the status of
Distribution System Operators. PGNiG is also a leader on the retail market, several other companies have entered the market but their
total market share was about 2% in 2009.
Water (Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
99
100
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste collection (%)
12,053
79
Last update: September 2011
ROMANIA
POLITICAL BACKGROUND
Type of government: Constitutional Republic
Head of State: Traian Basescu (Democratic Liberal Party - PDL)
Elected in: December 2004 ; reelected in 2009
Next poll in November 2014
Key Ministers: Minister of Economy, in charge of energy: Ioan Ariton (PDL)
Minister of Environment and Forestry: László Borbély (Democratic Union of Hungarians in Romania - UDMR)
Parliament: Bicameral Congress: Senate (137 seats) and Chamber of deputies (334 seats)
Elected in: November 2008
Next poll in November 2012
COUNTRY RISK
Considered lowest investment grade by market
participants
Medium grade, moderate credit risk with certain
speculative characteristics
Standard & Poor's
BBB-
Moody's
Baa3
COFACE
B
Political and economic uncertainties and an
occasionally difficult business environment can
affect corporate payment behaviour. Corporate
default probability is appreciable.
L
Country vs. World Median
Low
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
B
SECURITY RISK
Control Risks 2010
Financial
Romania
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
21.5 Urban population (2020 p)
163 HDI ranking
58.1%
50/169
Exchange rate (RON/EUR): 4.25 (09/2011)
* Romanian economy will return to modest growth this year, following two years of contraction in 2009-10. Latest forecasts of Erste Bank/BCR
predict a 2% GDP growth for 2011, while EBRD estimated a 1.8% growth.
Romania’s National Bank indicated that joining the Eurozone is absolutely necessary in 2015 and that the target would remain unchanged, even
though Romania is not ready for accession. The bank’s proposal is an 11-month transition period (during 2015) during which both the Euro and
the RON would circulate in parallel, in order to allow time for Romania's macroeconomic indicators to reach convergence. According to the new
convergence program, Romania would join ERM-II, the European mechanism of exchange rates, in 2013-2014.
* Submission of Romania’s letter of intent to IMF; several significant changes are expected, like the privatisation of the management of some
state companies, the end of the public subsidies to district heating (except for low revenues residential customers) and better regulatory
behaviour.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
4
7
1,6
1,7
2
3,4
6
6,1
0,9
1,3
0
2009
-2
2010
2011 f
5
4
2012 f
-1,3
3
-4,2
-4
6,0
5,6
3,2
1,5
2
-6
1
2,4
1,8
0,2
-7,1
-8
0
Romania
2009
Eurozone
2010
2011 f
Romania
Current Account Balance (% of GDP)
2
2012 f
Eurozone
Interest rates (%)
10
9
0
0,2
0,1
0,1
0,0
8
7
-2
6
-4
5
-3,4
-6
-3,9
-4,2
-4,5
4
3
2
-8
2009
2010
2011 f
2012 f
Short-term interest rate
1
0
Romania
Eurozone
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
80,0
71,6
-1
75,2
67,7
70,0
-2
65,1
60,0
-3
-2,9
-4
-4,2
-5
-3,2
50,0
-4,2
40,0
-6
-7
-8
External debt (% GDP)
2012 f
0
-6,3
-7,3
-6,0
30,0
-6,8
20,0
-9
Romania
Eurozone
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The country is under pressure to overcome political disparities and prevent future political instability. Reforms Top Government's Priority List:
Romania's government now has to dedicate all its energy to implementing reforms that will ensure better measures for fighting corruption and
increase the judicial capacity. Moreover, Romania is still lacking a business-friendly environment with regards to quality of infrastructure,
simplicity of the tax environment, transparency of the legal system, and relevant measures used for tackling corruption and red tape. As one of
the latest countries to join the EU, Romania is still in the process of harmonising its legislature with EU requirements. Strict monitoring of certain
outstanding issues is still in place, and there is a likelihood of financial sanctions from the European Commission should Romania fail to ensure
consistent pace and depth of reforms in the country, specifically concerning corruption and judicial competence.
*Schengen Accession Almost in Jeopardy: its entry in the visa-free Schengen zone in March 2011 was postponed due to a series of delays
regarding political objections of such countries as France, Germany and the Netherlands. These countries particularly criticised Romania's high
level of corruption and lack of speed in implementing judicial reforms. Although these areas fall outside the Schengen criteria, the three countries
have suggested that Romania's Schengen entry should be conditional on improvements in these fields as the country's EU accession has
deprived the bloc from the most efficient tool to enforce the reforms. In June 2010, the European parliament supported Romania's Schengen bid;
however, its accession to the zone is still likely only in 2012.
ENERGY OUTLOOK
Electricity (Source: ENERDATA)
Capacity (2008)
20.7 GW
Production (2008)
65.1 TWh
Consumption (2008)
50.1 TWh
Hydro
Coal
Gas
Oil
Nuclear
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2009)
Consumption (2009)
2 TCF
384 BCF
455 BCF
Source: ENERDATA
Electricity
* The RO Authorities want to increase nuclear in the country’s energy mix. Besides the 2 new blocks at Cernavoda NPP (1400 MW), they plan to
build an EPR reactor by 2030. The withdrawal beginning of 2011 of 4 investors, including GDF SUEZ from this project give a negative signal to
potential investors and may compromise the feasibility of the project.
* Romania’ s power consumption increased by 4.8% in 2010 and it is foreseen to grow by 2% more in 2011. (TSO source)
* Romania’s generation mix is balanced, with coal, hydro, and nuclear energy as prominent sources of power production. Nevertheless, the
power generation sector needs large investments to modernize existing facilities, to improve efficiency, and upgrade them to the current EU
emissions standards.
* Renewable energy is forecasted to growth significantly in the next 3-5 years, mainly thanks to a very favourable support scheme (3000 to 4000
MW expected in wind). the installed wind energy jumped from 14 MW at the end of 2009 to 462 MW end of 2010.
Gas
* The Arad-Szeged gas interconnection, linking Hungary to Romania (only one way flow), was inaugurated in October 2010. It has an initial
capacity of 1.7 billion cubic meters/year and might reach a maximum of 4.4 billion cubic meters/year. GDF SUEZ has booked capacity. Romania
is also preparing the connection to Bulgaria by the Giurgiu-Ruse pipeline starting summer 2012.
* Romania promotes the AGRI project (Azerbaijan-Georgia-Romania-Interconnection liquefied natural gas project) that will cost between 2 and 5
bln EUR. Hungary has joined this consortium in Feb. 2011.
* Pressure put on the Authorities is growing, both from IMF and Foreign Investors, for a serie of tariff increase over 2011. the calculation of the
regulated prices for gas should be reformed. An increase of its tariffs on the non-protecting customers segment is expected.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2006)
Access to drinking water (%)
Access to sanitation (%)
99
88
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste collection (%)
8,507
58
Waste: * The inadequate waste management practices, inherited from the past and still in place in Romania, have led to a large number of noncompliant waste landfills and to the inadequate disposal of considerable quantities of waste. Moreover, Romania faces infringement measures as
a result of failing to comply with the European regulations on land filling.
In order to meet the European legislation approximately 1.17 bn EUR are estimated to be directed to waste management and recycling between
2007-2013, out of which 930 MEUR are EU funds.
Last update: September 2011
SLOVAKIA
POLITICAL BACKGROUND
Type of government: Parliamentary Republic
Prime Minister Iveta Radicova (Slovak Democratic and Christian Union – Democratic Party)
Appointed by the President in July 2010
Key Ministers: Minister of Economy, in charge of energy: Juraj Miskov (Freedom and Solidarity Party - SaS)
Minister of Environment: József Nagy (Most – HID)
Parliament: National Council of the Slovak Republic with 150 members
Elected in: June 2010
Next poll in June 2014
COUNTRY RISK
Upper medium grade, strong capacity to
meet financial commitments
A+
Standard & Poor's
A1
Upper-medium-grade, low credit risk
A3
Moody's
The political and economic outlook and a
relatively volatile business environment
can affect corporate payment behaviour.
Corporate default probability is still
acceptable on average.
Country vs. World Median
(Five-year risk aggregates)
35
30
COFACE
25
20
15
10
5
0
SECURITY RISK
B
Control Risks 2010
L
Low
Overall
Financial
Slovakia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
5.4 Urban population (2010)
87.2 HDI ranking
56.8%
31/169
Exchange rate (EUR/USD): 0.73 (09/2011)
* Slovakia had the fastest growing economy in Europe in 2010 with a GDP growth of 4.0 %; growth is expected to be slightly lower in
2011 (roughly 3.3 %), due to an ambitious fiscal consolidation package to push down the State deficit from 7.9 % in 2010 to around 4,9 %
in 2011; foreign demand is the driving force of the economy but inflation is growing fast and reached 4.1 % in May on a year-on-year
basis. Unemployment is decreasing but remains high(14 %).Public debt is growing but is still very low(41%) compared with Western
countries average.
* Export competitiveness remains an issue of modest concern, as Eurozone membership (achieved in January 2009) prevents the use of
currency depreciation as a tool to boost external competitiveness. Nevertheless, euro adoption has also brought low interest rates and
exchange-rate stability, while the currencies of other Central European countries will continue to face fluctuations in the run-up to
Eurozone entry, making them less attractive to investors. As Slovakia grows richer, one of the biggest challenges for policymakers will be
to attract foreign investment that is not based on low wages alone.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
6
4,0
5
4,1
3,3
4
4
1,7
2
3,9
1,6
0,9
0
2009
2010
2011 f
2012 f
-2
-4,2
-4
3
2,4
2
1
1,5
0,9
1,8
0,7
0,2
-4,8
-6
0
Slovakia
2009
Eurozone
2011 f
2012 f
Eurozone
Interest rates (%)
8
0,2
0,1
2010
Slovakia
Current Account Balance (% of GDP)
2
0,1
0,0
7
0
Short-term interest rate
6
-2
-2,0
-2,2
-4
-3,5
-3,6
Long-term interest rate
5
4
-6
3
-8
2
1
-10
2009
2010
2011 f
Slovakia
2009
0
Eurozone
Fiscal balance (% of GDP)
2010
2012 f
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Net Public debt (% GDP)
2012 f
0
60,0
-1
46,7
50,0
-2
44,6
41
40,0
-3
-3,2
-4
-4,2
-5
-4,9
-6
-7
-6,0
-6,3
-8,0
35,4
30,0
20,0
0,0
-7,9
Slovakia
-3,8
10,0
-8
-9
2,3
Eurozone
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Slovakia joined the Eurozone, being then only the second country of all the former communist countries that joined the bloc in 2004 to
do so. The move came just in time, before the sharp economic downturn. Slovakian politics are dominated by the centre-left, represented
by the Direction-Social Democracy (Smer-Sociálna Demokracia: Smer-SD) party of popular Robert Fico, and the centre-right,
represented by the current government led by the Slovak Democratic Christian Union-Democratic Party. Four right-leaning parties
teamed up to create the government, pledging to improve the country's business environment and crack down on corruption. The first
half of the year 2011 was marked by repeated crisis within the governmental coalition which is facing a strong opposition led by the
former Prime Minister Robert Fico resulting in a very long decision-making process.
* The so-called „‟lex SPP‟‟ according to which energy companies had to submit their tariff proposals to their general meetings was finally
cancelled after several months of fight between the government and the opposition.
ENERGY OUTLOOK
Gas 9%
Oil 8% Biomass
2%
Coal 24%
Nuclear
26%
Electricity matrix
(installed capacity)
in 2009
Electricity (Source: Enerdata)
Capacity (2009)
7 GW
Production (2009)
26.2 TWh
Consumption (2009)
23.9 TWh
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
Hydro
36%
1 TCF
4 BCF
226 BCF
Electricity
* Generation is dominated by nuclear, hydro and coal. Gas-fired generation is forecast to grow at the expense of coal.
Slovenske Elektrárne (SE) owns about 80 percent of total installed generation capacity.
* Power demand fell by 9 % in 2009 but is expected to recover in 2010 and eventually settle at about 2.4 percent per year in the long
term.
* Renewable generation: a new policy aims at halting the huge boom in construction of wind and solar power plants which have a
negative impact on electricity prices
* Nuclear: Slovakia has four nuclear reactors generating half of its electricity and two more under construction. Slovakia has gone from
being a net exporter of electricity – of some 2 billion kWh/yr – to being a net importer following the shutdown of the Bohunice V1 reactor.
Government commitment to the future of nuclear energy is strong.
Gas
* SPP (GDF SUEZ 24.5 %, Eon Ruhrgas 24.5 % and Slovak National Property Fund 51 %) is responsible for natural gas imports, transit,
storage and distribution. The company operates Slovakia‟s natural gas storages (total capacity of 3.8 bcm).
* Gas Interconnection between Hungary and Slovakia transmission networks: A natural gas interconnector between Hungary and
Slovakia is set to operate from January 2015, Hungarian electricity network operator Ovit Zrt. said in a statement Tuesday. Ovit, majorityowned by Hungarian state power company Magyar MVM Zrt., will create a gas transport firm as of January 2012, to oversee the
construction of the planned gas link. Hungary's development ministry requested the European Commission transfer to Ovit of a EUR26
million subsidy for the project, originally meant for MOL.
* The Polish gas transmission operator, Gaz-System S.A., and Eustream A.S., its Slovak counterpart, decided in Jan. 2011 to cooperate
on a gas pipeline between Poland and Slovakia, that could be an element of the North-South Corridor. One of the benefits of the project
is that it would give Central European customers access to the Świnoujście liquefied natural gas (LNG) terminal.
* Positive measures have been announced such as the cancellation of the “lex SPP” (blocking of tariffs increase) , the denationalization
of the heating sector. Increase energy prices up to the required level is however very challenging for this government.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
100
100
Waste
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste landfilled
1,837
75.4%
Last update: September 2011
AZERBAIJAN
POLITICAL BACKGROUND
Type of government: Presidential Republic
Head of State: Ilham Aliyev
Elected in: October 2008 (2nd term)
Next poll: October 2013
Key Ministers: Minister of Industry and Energy: Natiq Aliyev
Minister of Ecology and Natural Resources: Huseyn Bagirov
Parliament: National Assembly (Milli Maclis) - 125 seats
Elected in: November 2010
Next poll in November 2015
COUNTRY RISK
Standard & Poor's
Moody's
Considered highest speculative grade by
market participants
Speculative elements, substantial credit
risk
Lack of economic diversification. Poor
business environment. Corporate default
probability is very high.
BB+
Ba1/POS
C
COFACE
SECURITY RISK
B
Control Risks 2010
Medium security risk in the country, with
a high risk in Armenian border areas and
Nagorno-Karabakh
M
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Financial
Azerbaijan
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
9.19 Urban population
51.8 HDI ranking (2009)
52.2%
67/169
Exchange rate (AZN/USD): 0.79 (09/2011)
* The impact of the global economic downturn in 2008-09 was much less severe on Azerbaijan than on other countries in the region. The
economy is forecast to grow at an annual average of 2.8% in 2011-15, down from an average of 16.4% in 2006-10. Slower expansion in
oil production in the coming years will act as a considerable drag on growth. The business environment will remain difficult, owing to
entrenched corruption, as well as the presence of formal and informal monopolies in many sectors. In conjunction with a less favourable
global environment than before the global crisis, this will hamper the authorities’ goal of increasing investment in non-oil sectors such as
agriculture and manufacturing.
Real GDP Growth (%) change from a year earlier
12
CPI Inflation (%) change from a year earlier
15
9,3
10
8
5,0
6
3,8
4,3
11,8
10
4
4,0
2
8,7
2,8
6,8
0
-2
2009
7,1
4,1
2010
2011 f
2012 f
8,0
5,7
5
6,7
-4
-6
-7,8
1,3
-8
-10
0
Azerbaijan
2009
Russia
2010
2011 f
Azerbaijan
2012 f
Russia
Interest rates (%)
Current Account Balance (% of GDP)
14
40
13
29,0
30
26,1
12
24,5
23,0
11
20
10
9
10
4,0
4,8
5,1
2009
2010
2011 f
2,8
8
7
2012 f
-10
Short-term interest rate
6
0
Long-term interest rate
5
Azerbaijan
Russia
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
1
-1
External debt (% GDP)
2012 f
12,0
0,4
-0,1
-0,7
11
10,0
-0,9
-1,5
-3
-1,6
8,0
6,9
6,4
6,2
2010
2011 f
2012 f
6,0
4,0
-4,2
-5
2,0
-7
-6,3
Azerbaijan
Russia
0,0
2009
Last update: September 2011
POLITICAL OUTLOOK
* The president, Ilham Aliyev, has been in office since 2003, following the death of his father, Heydar Aliyev. Power is concentrated in the
president, and Mr Aliyev appears to have control over the country’s political structures. In 2010, Aliyev’s ruling party secured 73 seats in
the 125-seat parliament.
* Since March 2011 several opposition parties and movements have staged anti-government protests in the capital, Baku; so far the
number of protesters has remained small. Further small-scale protests are likely to be held in the near term.
* Azerbaijan's strategic position and its increasing oil and gas production are giving Aliyev and his government growing influence on the
international stage. The unresolved conflict between Armenia and Azerbaijan is perceived to be the largest threat to peace and security in
the South Caucasus and the wider region.
ENERGY OUTLOOK
Hydro
14%
Gas
35%
Electricity matrix
(installed capacity)
in 2009
Electricity
(Source: Enerdata)
Capacity (2009)
5.2 GW
Production (2009)
Consumption (2009)
Oil 51%
21.2 TWh
14.9 TWh
Natural gas
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
30 TCF
572 BCF
375 BCF
* The Industry and Energy Ministry supervises the energy sector. The "Tariff Council", a price regulation agency, was created in 2005.
* The energy sector represents more than 90% of Azerbaijan's exports. GDP growth is thus dependent on energy prices.
Electricity
* Azerenergy is Azerbaijan's public electricity company. It is the main power producer and is responsible for electricity transport and
distribution. The electricity production market has recently been opened to independent producers. The State Alternative Energy Agency
(established in 2009 under the Industry and Energy Ministry) aims to set the legal and regulatory framework to promote private
investments into the alternative energy sector.
* The generating capacity increased by 1,500 MW in Azerbaijan by constructing 10 electric power plants over the last seven years. At
present, roughly 13 thermal and six hydroelectric power plants with total capacity of 5,200 MW operate in Azerbaijan.
* The theoretical hydropower potential of all of the rivers in Azerbaijan is estimated at 40 billion kilowatt-hours. The theoretical potential of
small hydropower plants is 28 billion kilowatt-hours.
* In the near future Azerbaijan plans to build 36 small hydropower plants. The construction of the "Goychay-1,"Balaken-1" and "Gusar-1"
small hydropower plants is underway. The Fuzuli hydroelectric power station with capacity of 25 MW will be completed in 2011. The
reconstruction of the Varvarin hydroelectric power station is under preparation. A hydroelectric power station with capacity of 400 MW is
planned to be created at the Kura River.
* Azerbaijan has underlined its will to work with Georgia in its effort to build 13 hydroelectric power stations by 2015 and power lines that
will connect energy systems between the two countries.The creation of the Azerbaijan-Georgia-Turkey energy bridge will give the country
the opportunity to transport to Europe power with a capacity of 600-700 MW.
Oil & Gas
* SOCAR (State Oil Company of Azerbaijan) holds a monopoly for oil and gas production. Azerigaz, State company responsible for gas
transport, is to be privatized soon. It produced 572 BCF of gas in 2009.
* Azerbaijan holds very important hydrocarbon reserves with about 7 billion barrels of oil and 30 TCF of gas. These reserves are still
under estimated according to Oil & Gas Journal.
* At present time, the key clients of Azeri hydrocarbons are Russia, Italy, Turkey and Germany. Gas production increases since 2004,
reaching 16.6 Gm³ in 2008. The government aims to triple gas production by 2015, to reach 47 Gm³. Oil production is strongly growing,
reaching 44 million tons in 2008 (against 16 million tons in 2004).
* Azerbaijan exports oil through 3 pipelines: BTC pipeline (50 million tons/year capacity) which transports oil through Turkey, a pipeline
going through Russia, and a pipeline through Georgia.
* The development of offshore gas resources and the construction of the South Caucasus gas pipeline have transformed Azerbaijan into
a major regional gas producer and exporter, allowing the country to emerge as a potential alternative to Russia for Europe. It is courted as
a supplier for the Nabucco pipeline, that would go through Turkey, Bulgaria, Romania, Hungary and Austria.
* In 2006, Azerbaijan began to exploit Shah Deniz gas field, the largest in the country. Gas produced from Shah Deniz gas field provides
gas for the new South Caucasus gas pipeline (6.6 Gm³ capacity). Azerbaijan delayed the exploitation of Shah Deniz phase 2, due to
transit conditions through Turkey and uncertainty over Nabucco pipeline project. Shah Deniz is located offshore in the Caspian Sea,
approximately 60 miles southeast of Baku, and is being developed by the Shah Deniz consortium: BP (25.5%), Statoil (25.5%), SOCAR
(10%), LukAgip 10%), Naftiran (10%), Total (10%), and TPAO (9%). Azerbaijan and Turkey are to sign a contract on the transport of
natural gas and purchase and sale of gas from Shah Deniz 2.
* In September 2011, GDF SUEZ announced extremely promising results (more than 500 feet of cumulated net gas pays) on the
exploration well ABX-2.T1 drilled by Total (operator) on Absheron licence, offshore Caspian Sea. GDF SUEZ holds 20%, Total and
SOCAR each hold 40% stake in Absheron project.
* A 5-billion USD gas pipeline project between Azerbaijan and Turkmenistan (capacity 30 Gm³) is under consideration to supply South
Caucasus Pipeline by 2012 and possibly Nabucco.
* Agreements were achieved with Russia and Iran late 2009 on the annual supply of 1.5 bn m³ of azeri gas to each of these states. These
volumes might be increased (in particular, Iran is ready to import up to 5 bn m³/year). There are also talks with Romania and Bulgaria.
Azerbaijan wants to export more gas for EU through Greece.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Waste
(Source: Unstat 2007)
Access to drinking water (%)
80
Municipal waste collection (Mt)
1,603
Access to sanitation (%)
45
Municipal waste landfilled
N/A
Water: * In Azerbaijan 88% of urban population have access to mproved drinking water sources, while in rural area they are only 71%.
Since the collapse of the USSR, the quality of water infrastructure and services in the country has deteriorated due to insufficient
* Institutional reform is under way, replacing of the state-owned company SuKanals by open-type joint stock companies (JSCs), opened to
private investors.There are plans to address infrastructure inadequacies, but the cost is high. A 1.1 billion USD pipeline, bringing water
from the northern town of Oguz, is projected to significantly boost Baku’s water capacity.
* Since 2007, the Government has started to develop projects for reconstruction and development of water supply and sewer systems
with the World Bank support. The “National Water Supply and Sewer System Project” aims to increase exploitation and water use culture
through the development of safe for health, reliable water supply and sewer systems. A project supported by the Asian Development
Banks aims to improve water supply and sanitation services in Goychay, Adgash and Nakhchivan by 2010, through infrastructure
development and the establishment of JSCs. The international community has provided about $12 million since 2007 for the government
to install about 80 new water purification plants in the regions. In 2009-2010, the government spent about 1.25 million dollars on similar
*AzerSu JSC, national operator of water facilities (created by a presidential decree in 2004) is in charge of development programmes for
communities water services. Water assets are still owned by municipalities and are to remain in municipal ownership according to the
National Water Code. Water shortages in the capital Baku are frequent.
Waste: The waste collection system works reasonably well in Baku but rural areas are only partly covered by waste collection services.
Few existing landfills meet international sanitary standards. In 2009, the authorities have awarded to CNIM (Constructions navales et
industrielles de la Méditerranée) the construction of an incinerator in Baku, for a cost of 350 million EUR, fully financed by the Azerbaijani
government. CNIM will operate the facility for 20 years, after its commissioning in 2012. As solid waste management remains one of the
main environmental challenges of the country, the Government is taking steps towards dealing with the problem. The Ministry of
Economic Development is working on a 900 MUSD project, co-funded by the Government of Norway and UNDP, to build a major factory
in Baku for solid waste treatment.
Last update: September 2011
KAZAKHSTAN
POLITICAL BACKGROUND
Type of government: Presidential Republic
Head of State: Nursultan Nazarbayev
Elected in: April 2011 (in office since 1991)
Next poll in 2016
Key Ministers: Minister of Oil and Gas: Sauat Mynbayev
Minister of Environment Protection: Nurgali S. Ashimov
Parliament: Bicameral Congress: Majilis (107 members) and Senate (47 members)
Elected in: August 2007
Next poll in 2012
Early parliamentary elections in Kazakhstan may be held in November or October 2011
COUNTRY RISK
Standard & Poor's
Moody's
Adequate capacity to meet financial
commitments
Medium grade with moderate credit risk
BBB
Baa2/STA
SECURITY RISK
Control Risks 2010
40
35
High weaknesses of a banking sector
burdened with very heavy foreign debt as
well as a difficult business environment
may affect payment behaviour. Average
default risk from companies is quite high.
B
COFACE
Country vs. World Median
(Five-year risk aggregates)
30
25
20
15
10
5
0
B
M
Overall
Medium
Financial
Business
Kazakhstan
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
15.75 Urban population
146.0 HDI ranking
58.5%
66/169
Exchange rate (KTZ/USD): 146.9 (09/2011)
* Kazakhstan's recovery is solidifying, with real GDP growing by 7.1% year on year in the first half of 2011, up from 6.6% in the first
quarter. Robust growth in the first half largely represents a continuation of the trends in 2010, when an increase in external demand and
an improvement in domestic conditions underpinned economic activity.
* The Kazakh government continues its economic diversification drive through financing relevant projects within the "30 Corporate
Leaders of Kazakhstan" state programme. Projects with a value of at least USD100 million receive state assistance, as well as tax
incentives. Most of the projects supported by the government are supposed to advance high technology, science oriented sectors of the
economy. Around USD54 billion will be poured into 294 investment projects which will create 161,000 permanent jobs in the next two
years. By the end of 2011 the government will also trim 30 business licences and cut bureaucratic red tape to improve the operational
environment in the country.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
8
15
6,0
6
4,9
7,0
4
4,0
2
0
-2
2009
3,8
4,1
2011 f
2012 f
11,8
10
8,7
1,2
7,3
2010
-4
6,7
8,2
6,8
5
-6
7,1
6,1
-7,8
-8
-10
0
Kazakhstan
2009
Russia
Current Account Balance (% of GDP)
2011 f
2012 f
Russia
Interest rates (%)
8
8
6
5,1
4,8
4,0
4
3,8
3,0
4,2
6
2,8
2
4
Short-term interest rate
0
Long-term interest rate
-2
-4
2010
Kazakhstan
2
-3,8
2009
2010
2011 f
Kazakhstan
2009
Fiscal balance (% of GDP)
2010
2012 f
0
Russia
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
2
100
98,2
0
-0,6
-0,9
-2
-1,5
-2,0
-4
81,7
80
-0,4
-1,6
81,3
70,8
60
40
-4,2
20
-6
-6,3
0
-8
Kazakhstan
Russia
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Constitutional amendments adopted in 2007 secure life-time presidency to Nazarbayev, Kazakhstan's President since 1989. The title of
"Leader of the Nation", awarded to Nazarbayev by the Parliament in June 2010, exempts him from any legal prosecution in the future.
However, Nazarbayev has allowed instead a relatively liberal competition of elite groups under his watchful eye. While for the past two
decades Nazarbayev has largely concentrated on economic development of his country, the next decade is set to focus on political
reform and preparation for a smooth transfer of power in 2020.
* Law on Use of Subsoil adopted in 2007, gives the government the right to cancel energy contracts with foreign companies on the
grounds of breach of natural security.
* Kazakhstan intends to become a political and economic hub in Central Asia. It maintains good relations with Russia, and at the same
time continues broadening its economic ties with China. The government has used its 2010 presidency of OSCE to promote the
country's positive image.
ENERGY OUTLOOK
Hydro
12%
Oil 7%
Coal
60%
Electricity matrix
(installed capacity)
in 2009
Gas
21%
Electricity (Source: Enerdata)
Capacity (2009)
19 GW
Production (2009)
78.9 TWh
Consumption (2009)
58.9 TWh
Natural gas (Source: EIA 2009)
Proven reserves (2009)
85 TCF
Production (2009)
387 BCF
Consumption (2009)
303 BCF
* The national energy policy pursues several objectives: reduction of energy intensity, lower the country's dependence on imports,
increase the use of the domestic primary resources, reduce the greenhouse gas (GHG) emissions, and diversify the country's energy
mix.
Electricity
* Kazakhstan launched an important reform program to modernize its electricity system. The Kegog company was created to manage the
transport network, while power plants have been privatized. There are 21 distribution companies and the electricity is sold by 20 Energy
Supply Organisations (ESOs).
* There are 71 power plants in Kazakhstan, for a total installed power generation capacity of 19 GW. An important part of the power
plants are obsolete, and the transport and distribution network is poorly efficient. The country's hydropower potential is about 30 TWh but
is under-exploited.
* The domestic electricity consumption is to grow rapidly, mainly due to high demand of industrial and residential sectors: 86 TWh in
2015, 100 TWh in 2020 and 130 TWh in 2030. More than 3 Bn USD investments are necessary to develop additional 1,500 MW and
renovate existing plants. In 2010, Kazakhstan was net electricity importer (the north regions export electricity to Russia while the south of
the country buys its from Kyrgyzstan and Uzbekistan).
* Kazakhstan holds 11% of the world uranium reserves, and is the 2nd largest uranium producer, with 8,500 tons produced in 2008 (21%
of world production). The Kharasan 1 uranium mine has been inaugurated in 2008 and should reach a production capacity of 3,000
tons/year by 2014. A Russian-Kazakh nuclear plant project on the Balkach Lake is under consideration (1,900 MW capacity). In 2010,
Areva signed an agreement with the GoK for a nuclear fuel manufacturing JV located at Ulba.
Oil & Gas
* The hydrocarbon sector represents about one third of the Kazakh GDP and more than 75% of the foreign direct investments. The
country's main objective is to better exploit the hydrocarbon resources to reach a production of 150 million tons of oil and 36 Gm³ of gas
and to export 24.8 Gm³ of gas by 2015.
* KazMunaiGas (KMG), the national oil and gas company, controls the transportation and distribution networks. Production capacities
have been partly privatized : TCO (Chevron + Exxon Mobil), Agip KCO, KPO (BG, Agip, Chevron, Lukoil), CNPC, …
* Kazakhstan has abundant oil and gas reserves (respectively 4.1 billion tons and 1,950 Gm³). Tengiz oil field, one of the biggest in the
world (about 3 billion tons), is exploited by Tengizchevroil (TCO). TCO also develops the Korolevskoye field since 2001. There are 3 gas
fields in the country.
* Oil production went from 35.3 to 76.4 Mtons in the period 2000 - 2009. Gas production has more than tripled since 2000, reaching 35.6
Gm³ in 2009.
* Most of the oil produced in Kazakhstan is exported (62 Mton in 2009). The country's geographical situation makes it very dependent on
Russia for its exports, as most of the oil exported from Kazakhstan transits through Russia. Since 2004, a tax is charged on oil exports,
linked to the oil prices level.
* The country faces problems in the transport of its gas production: as a consequence, it exports about 30% of its production to Russia,
but imports about half of its needs from Turkmenistan, Russia and Uzbekistan. The government is considering the construction of a 3.8
billion EUR gas pipeline to supply the Western part of its territory, allowing to reduce gas imports.
* The Central Asia-China gas pipeline, inaugurated in Dec. 2009, will reach a 30 Gm³/year capacity by end-2011. Starting at TurkmenUzbek border it runs through Uzbekistan and Kazakhstan to end at Horgos in China’s Xinjiang Uygur autonomous region. Other pipelines
projects are under consideration aiming at India, Pakistan and Iran, but face political and economic obstacles.
* Kazakhstan has launched a 10 billion USD programme for creating a "Caspian Energy Hub", consisting in a multipurpose servicetechnological centre for the oil and gas industry. It will be akin to the Qatar Energy Hub created for Gulf States.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Waste
(Source: Unstat 2009)
Access to drinking water (%)
95
Municipal waste collection (Mt)
3,928
Access to sanitation (%)
97
Municipal waste landfilled
N/A
Water: * The Government has embarked in 2008 on a National Integrated Water Resources Management and Water Efficiency Plan.
There is no clear vision and strategy for the development of the water utilities sector in the country. Some government representatives
confirm that the privatisation of water utilities has not gone well and some of them are being taken back by the state or local
governments. It is becoming clear that privatisation is not a panacea and that there is a need for other, more innovative, approaches to
involving the private sector in managing water infrastructure. There is no authorised body specifically responsible for water utilities and
the reforms in the water sector in Kazakhstan.
Waste: * Kazakhstan has accumulated 22 Bn tons of waste and generates about 700 million tons of waste every year. The waste
treatment system has been managed by local authorities since 1992. The existing waste disposal system is obsolete, inherited from the
Soviet era. Almost all municipal waste is disposed in landfills or city dumps which lack of basic sanitary and environmental provisions.
There is a major issue with radioactive waste from uranium mining.
Last update: September 2011
RUSSIA
POLITICAL BACKGROUND
Type of government: Federal state with republican form of government
Head of State: Dmitry Medvedev
Elected in: March 2008
Next poll: March 2012
Key Ministers: Minister of Energy: Sergei Shmatko
Minister of Economic Development: Elvira Nabiullina
Minister of Regional Development: Viktor Basargin
Minister of Natural Resources and Environmental Protection: Yuri Trutnev
Parliament: Bicameral: Duma (450 members) and Federation Council (166 members)
Elected in: December 2007
Next poll: December 2011
COUNTRY RISK
Standard & Poor's
Moody's
Adequate capacity to meet financial
commitments
Medium grade with moderate credit risk
BBB
Baa1/STA
Economic uncertainties mainly due to the
energy prices dependency. Default
probability for companies remain high,
especially for those not supported by
state.
Medium security risk in the country, with a
high risk in North Caucasus (Chechnya,
Dagestan and Ingushetia )
B
COFACE
SECURITY RISK
Control Risks 2010
B
M
Country vs. World Median
(Five-year risk aggregates)
45
40
35
30
25
20
15
10
5
0
Overall
Financial
Business
Russia
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
140.4 Urban population
1,479 HDI ranking
72.8%
65/169
Exchange rate (RUB/USD): 29.5 (09/2011)
* The Russian economy is still recovering at a moderate pace from a deep recession suffered in 2009 and remains overly dependent on energy export
revenues to drive domestic growth. Energy prices rebounded partially after mid-2009 and have risen steadily since mid-2010. High oil prices are
helping to narrow the budget deficit, even though efforts to limit increases in spending will prove difficult ahead of forthcoming elections. Despite
stimulative government spending and a reduction in the rate of unemployment, exports have been the primary driver of growth in the recovery, while
domestic demand has remained slack until the most recent period. The latest fiscal plans suggest that the overall budget will remain in deficit in 201214.
* The government appears to have agreed in principle to a new privatization plan for 2012-17 which covers a range of state assets hitherto regarded
as strategic, in oil, banking, finance and transport.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
7
15
4,0
3,8
4,1
1,6
5
1,9
9
2011 f
2012 f
7
13
3
11
2,9
1
-1
-3
2009
2010
8,7
6,8
5
-3,9
6,7
2,7
-5
-7
11,8
3
1
-7,8
-9
-1
Russia
1,7
1,6
0,4
2009
OECD
2010
2011 f
Russia
Current Account Balance (% of GDP)
2012 f
OECD
Interest rates (%)
8
6
14
5,1
4,8
12
4
2,8
4,0
10
2
8
0
6
-0,5
-0,7
-0,8
-0,6
2009
2010
2011 f
2012 f
-2
4
-4
Russia
Short-term interest rate
Long-term interest rate
2
OECD
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
External debt (% GDP)
2012 f
0
45,0
40,0
-2
-1,5
-1,6
38,2
-4
36
33,1
35,0
36
30,0
-4,2
-4,7
-6
-6,3
-5,9
-7,0
-8
25,0
20,0
15,0
-8,0
10,0
-10
Russia
OECD
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Upcoming Parliamentary Election Prelude to Presidential Vote: The legislative election hold in 2011 will precede the presidential vote in
2012, which will probably see the return of Vladimir Putin. Medvedev has failed to emerge as an independent political leader during his
presidency.
* Russia Improves Relations with the the EU and the USA emerging as a pragmatic partner engaged with the West: containment of Iran's
nuclear ambitions, co-operation over Afghanistan, signing the new START treaty in 2010, US support for Russia’s accession to the WTO,
and Russia’s decision not to veto a UN Security Council resolution authorising military intervention in Libya.
* The latest developments regarding Novatek (largest private gas company) support the belief that within the coming months Gazprom
will loose its monopoly on gas exports, which will have highly significant political consequences on the relations between Russia and the
EU.
Nuclear
11%
Oil 7%
Electricity matrix
(installed capacity)
in 2009
Hydro
21%
Coal
18%
Gas
43%
Electricity
(Source: Enerdata)
Capacity (2009)
229 GW
Production (2009)
Consumption (2009)
Natural gas (Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
992 TWh
807 TWh
1,680 TCF
21,545 BCF
15,006 BCF
Electricity
* Russia is one of the top producers and consumers of electric power in the world, with more than 220 GW of installed generation
capacity. Russia’s power sector includes over 440 thermal and hydropower plants (approximately 77 of them are coal-fired) plus 32
nuclear reactors. Energy efficiency is in the heart of Fuel Energy Complex reform 2009 - 2030 in Russian Energy Strategy.
* There are eight separate regional power systems in the Russian electricity sector, seven of which are connected to an integrated power
system: Northwest, Center, South, Volga, Urals, Western Siberia, and Siberia. The Far East region is the only one not connected to an
integrated power system. Federal Grid Company (FGC) controls most of the transmission and distribution in Russia. The country's
electricity network is linked by over 2.5 million km of national and regional transmission lines and local distribution lines, including over
150,000 km of high voltage lines of between 220 and 1150 kV.
* The country has 102 hydropower plants in operation, with a capacity of over 100 MW. The total installed capacity of HPP turbogenerator
units in Russia today amounts to approximately 46 GW.
* Today Russian current nuclear generation installed capacity is 23,3 GW (10 NPPs, 32 reactors). Following Japan's nuclear crisis,
Russia is conducting public inspections at its NPPs, checking their reliability and seismic stability. Nuclear may represent 25% of total
power generation capacity in 2020 and 30% in 2030. This implies 42-58 new NPPs (at least 1-2 per year).
* JSC Atomenergoprom, Russia's nuclear operator is also the world leader in nuclear power construction (14 in total) and n°2 in terms of
nuclear power generation, it also controls 40% of the world market for uranium enrichment services and 17% of the world nuclear fuel
market.
* The Law "On energy saving and energy efficiency increase and amending certain legislative acts of the Russian Federation" signed in
November 2009 implies obligation for buildings and new constructions to be provided with electricity and heat meters by July 2012. Russia
has a huge energy efficiency potential, since it could save up to 45% of its primary energy consumption.Today due to the inefficient heat
networks Russia wastes 2/3 of heat produced in the country.
Gas
* Russia plays a crucial role in the global energy balance. It possesses the world's largest natural gas reserves and the 8th largest oil
reserves. Russia is actually the world’s biggest oil producer, 2nd largest gas producer and the biggest supplier of gas to the EU.
* Gazprom (state monopoly) controls 60% of natural gas reserves, produces 78% of national and 20% of world production. The market
share of non-Gazprom Russian gas producers has grown significantly in recent years (22% in 2010), and could reach 27% by 2030.
Russia's second-largest gas producer, Novatek, and the oil companies Rosneft, Lukoil, TNK-BP, and Surgutneftegaz, produce some 80%
of the total independent gas producers’ (IGP) output.
* Gas production should increase targetting a 1000 Gm3 volume by 2030, i.e. an increase of about 1.5 current volumes. In terms of
exports, 55% would be for Europe and 20% for Asia-Pacific. Russian energy exporters are likely to benefit from the increasing fuel
deliveries to Japan, which is a response to energy disruptions created by the earthquake and tsunami.
* Russia is investing in LNG business and expects its LNG supplies will account for 25% of the world LNG market (90 Mt) in 2030. Russia
started LNG exports to Japan and South Korea in 2009 with entry in operation of Sakhaline 2 project. The latter is one of the two current
large oil and gas E&P projects run by Gazprom and which includes an LNG plant construction (production capacity 13 Gm3). An LNG
terminal development in Ust-Luga near St Petersbourg is under consideration.
E&P: * Following gas disputes with Ukraine, Russia is intensifying its efforts to develop alternative exports routes to Europe and
international markets. Nord Stream pipeline consists of two 1,224 km pipelines through the Baltic Sea directly linking Russian fields to the
EU. Gazprom holds 51%, Wintershall and E.ON Ruhrgas each hold 15.5%, Gasunie and GDF SUEZ each have 9%. The first gas will
start flowing through Nord Stream in October 2011. The South Stream pipeline intends to deliver Central Asian and Russian natural gas to
Europe under the Black Sea starting from 2015. EDF and Wintershall hold each 15%, Eni has 20% and Gazprom has a 50% stake in the
project.
* In August 2011, Rosneft and Exxon Mobil agreed to explore and develop three license blocks on the Russian Arctic continental shelf.
Also in the Arctic, Shtockman Development AG is likely to decide its investment by end-2011. Shtockman's JV includes Gazprom (51%),
Total (25%) and Statoil (24%). Yamal peninsula's reserves and namely Bovanenkovo field, the biggest untapped gas field in Russia (with
projected peak output comparable to annual exports to Europe) is due on stream in the Q3-2012. In August 2011, Total purchased a
20.5% stake in Novatek’s Yamal LNG project to develop the South Tambey field in the Arctic area of the Yamal peninsula (44 tcf of gas
reserves, allowing production of more than 15 million t/year of LNG).
ENVIRONMENT OUTLOOK
Water (Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
96
87
Waste
(Source: Unstat 2009)
Municipal waste collection (Mt)
Municipal waste landfilled
56,172
N/A
Water: Around 15% of water sector is privately owned. The "Pure Water Federal Target Program for 2011-2017" is aimed at the
promotion of rational projects in the field of water consumption on the regional level. To implement the program, EUR 225 mln are to be
allocated out of the federal budget and EUR 225 mln out of the regional budgets in 2011-2013. EUR 7.85 billion is to be raised out of nonbudget sources.
Waste: Russia accumulated over 90bn metric tons of solid wastes and only a minor part of is currently recycled. In January 2010 the
Russian Government announced plans to recycle 20% of solid waste by 2016. Moscow, Saint-Petersburg and several other large regions
in Russia announced projects to build waste sorting and waste processing plants. Russian industry lacks expertise in many areas of waste
management including waste to energy technologies, sludge ash utilization and many others.
Last update: September 2011
TURKEY
POLITICAL BACKGROUND
Type of government: Parliamentary representative democratic republic
Head of State: President: Abdullah Gül (Justice and Development Party - AKP)
Elected in 2007
Next poll in 2012
Key Ministers: Prime Minister: Recep Tayyip Erdogan (AKP)
Minister of Energy and Natural Resources: Taner Yildiz (AKP)
Environment & urban planning: Erdogan Bayraktar (AKP)
Parliament: Unicameral Meclis (Parliament) of 550 members directly elected for a five-year term
Elected in 2011
Next poll in June 2015
COUNTRY RISK
Less vulnerable in the near-term but faces
major ongoing uncertainties to adverse
Country vs. World Median
(Five-year risk aggregates)
business, financial and economic
40
conditions
Standard & Poor's
BB
Moody's
Ba2/POS
Speculative elements, which are subject
to substantial credit risk
A shaky political and economic outlook
and a relatively volatile business
environment can affect corporate
payment behaviour. Corporate default
probability is still acceptable on average.
Corporate default probability is quite high.
A4
COFACE
35
20
30
25
15
10
5
0
Overall
Financial
Business
Turkey
B
SECURITY RISK
Control Risks 2010
Political
World Median
Low, high for rural, mountainous and
border regions in east
L/H
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
72.3 Urban population (2010)
734.5 HDI ranking
69.6%
83/169
Exchange rate (TRY/USD): 1.84 (09/2011)
* Turkish Economic Recovery is decelerating, but remains among strongest in Europe: Leading indicators as of mid-2011 showed that
economic growth had indeed begun to slow modestly as compared to vigorous rates of expansion noted in 2010 and the first quarter of
2011. Nevertheless, growth remains strong, keeping worries of overheating and a growing current-account deficit significant. Growth is
expected to slow to around 5% in 2011 and 3.5% in 2012, before picking up to 5-5.5% a year in 2013-15. The current-account deficit is
expected to rise to close to 10% of GDP in 2011, before narrowing gradually to a still large 5-6% in 2014-15 as domestic demand growth
moderates and commodity prices ease.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
12
10
8,9
7,0
8
10
6
4,3
4
7,6
6,3
1,9
1,6
0
-4
8,6
6
2
-2
8
2,9
5,7
4
2009
2010
2011 f
2012 f
2
-3,9-4,8
0,4
1,6
2,7
1,7
0
-6
2009
Turkey
OECD
2012 f
OECD
Interest rates (%)
20
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
-11
-0,5
-0,7
Short-term interest rate
18
-0,6
-0,8
Long-term interest rate
-2,3
16
14
-6,5
-9,8
12
-10,2
2009
2010
2011 f
Turkey
2012 f
10
OECD
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
Fiscal balance (% of GDP)
2009
2010
2011 f
2012 f
49
50,0
0
44
-1
-2
-3
44
40
40,0
-2,5
-4
-2,7
-3,6
-5
-4,7
-5,5
30,0
-5,9
-7
-7,0
-8
-9
2011 f
Turkey
Current Account Balance (% of GDP)
-6
2010
20,0
-8,0
Turkey
OECD
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Turkish Foreign Relations Thorny with Regional Actors: Turkish-Israeli relations continue to be tricky following the Israeli military's raid of
a Turkish vessel to Gaza in May 2010. Attempts to revive formerly close relations have stalled. With the parliamentary election now over,
there is new hope that bilateral ties will improve, Regarding Turkish-Armenian tensions, neither Turkey nor Armenia are pursuing
parliamentary ratification of "historic" protocols signed in 2009. Turkey has muddied the waters by attempting to link ratification with
progress in a separate dispute between Armenia and Azerbaijan over the Nagorno-Karabakh region. New tensions have arisen with Israel,
Cyprus and Greece regarding the offshore gas discoveries in the East of the Mediterranean sea. Erdogan's government has taken an
assertive role in regional politics and seeks to establish Turkey as the dominant power in the eastern Mediterranean.
* EU Accession Bid Remains Stalled: Turkey's accession bid began in 2005, but the process remains stalled over the country's lack of
progress on key reforms, many of which relate to democratic freedoms, legal issues, and competition policy. EU membership remains a
long way off for Turkey, and the country received negative feedback in the European Parliament's most recent review of its progress
towards accession. Turkey's stance over the Cyprus dispute also continues to hamper the country's overall efforts to improve relations
with the bloc, although bilateral Turkey-Greece discussions in January 2011 were largely positive.
ENERGY OUTLOOK
Gas
26%
Oil
13%
Electricity matrix
(installed capacity)
in 2010
Electricity
(Source: Enerdata)
Capacity (2010)
48.1 GW
Wind &
Geothermic
3%
Production (2010)
Consumption (2010)
Natural gas
Coal
23%
(Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
Hydro
35%
211 TWh
172 TWh
9 TCF
24 BCF
1,346 BCF
Electricity
* The total electricity production in Turkey in the first five months of 2011 increased by 10.8% and reached 92.2 billion kWh. To face the
increasing power demand, the Government has set up a program to increase the country's power generation capacity through IPP projects
development (indigenous coal, nuclear, wind, hydro and geothermal energy). fuel mix is approx. 1/3 each (coal, CCGT, hydro) with some
renewable. the market is liberalising with 15 generation companies ongoing. Per capita consumption is low at 2,880 kWh p.a. compared to
EU average of 6,400 kWh. Additional capacity of 2-3 GW is required by 2020.
* In 2020, nuclear power could reach 10,400 MW. A first NPP in Akkuyu (Mediterranean coast) is to be build by the Russian
Atomstroyexport. A second NPP could be built at Sinop (Black Sea). After the failure of the negotiations with the South Korean KEPCO
and the Fukushima accident, Turkey is now looking for new investors. GDF SUEZ may be interested to enter in an agreement with a
constructor.
* Turkish Government is beyond any doubt dedicated to continue with the liberalization of the market but things are moving slower than
expected in the current economic context. The Hamitabat CCGT, the 1st power plant to be privatized in spring 2011 has not found a
buyer. The capital investments foreseen for 2011 also show that the Government is also aware that the revamping of the electricity
transmission system is a must.
Gas
* One key goal is the diversification of gas suppliers to the market. Turkey is already importing supplies from 5 countries. However, it
hopes to reduce its dependence on Russian gas by reducing the share of Russian imports from 63 to 50 percent by 2014. With the
completion of the Arab gas pipeline and negotiations on the Nabucco pipeline, there is further potential for Egyptian and Syrian gas to
enter the Turkish market. However, the Nabucco Project is living dark times (delay, costs increase, lack of gas supply)
* The gas market is slowly but firmly liberalised, even if the gas incumbent BOTAS is still dominant with a 83% market share. « contract
releases » were organized, Third Party access was put in place in 2008-2009 and finally LNG imports were open to foreign companies.
All these measures allowed the creation of a wholesale market for natural gas on which GDF SUEZ is already active, notably for
supplying its gas distribution subsidiary IZGAZ.
* Turkey wants to uphold its role as an energy corridor in the region. The participation in the Nabucco project has a special importance.
However Turkey was also lenient with Russia when the competing “South Stream” required transit right of way through Turkish territorial
waters. Turkey also holds an ambiguous position towards the TGI/TAP projects that aim at bringing to Italy the Shah Deniz phase 2 gas.
Turkey's capacity to transit such volumes on its existing gas networks is also questionable. PM Erdogan announced a project of a canal of
40 to 50 km, called «Istanbul Canal» and linking Black and Marmara Seas. This new link is expected to reduce the hydrocarbon's traffic in
the Bosphorus.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
99
90
(Source: Unstat 2009)
Municipal waste generated (Mt)
Municipal waste landfilled
28,006
84.8%
Water : * Water supply is not subsidized, it is considered as an economic good with the "User pay" principle. Municipalities, responsible for
the water and wastewater sector, set their own tariffs. Public spending in the sector has increased to answer the high investment needs.
Water pollution is still very important. A 2006 law strengthened controls and sanctions.
* Reforms are underway to reduce the fiscal burden on the government. Privatisation and PPPs were favoured in recent years. However,
the administrative and legal burdens, as well as problems linked to water tariffs discourage foreign private companies.
Waste: * The sector is dominated by public entities, mainly municipalities, but private participation is increasing. Due to population growth
and urbanization, high investment is needed: most of the waste is not managed properly. Approx. 13 billion euros investments are needed
in the waste management sector by 2025 to comply with the EU acquis. The Environment Chapter was opened in December 2009 within
Turkey EU accession negotiations. The government proposed a “Solid Waste Action Plan” for the 2008-2012 period, aiming to develop
waste management policies and relevant financing.
Last update: September 2011
TURKMENISTAN
POLITICAL BACKGROUND
Type of government: Authoritarian (Presidential) Republic
Head of State: Gurbanguly Berdymukhammedov
Elected in: February 2007
Key Ministers:
Next poll: 2012
Oil & gas industry & mineral resources: Bayramgeldy Nedirov
Energy & industry: Yazmuhammet Orazguliyev
Water economy: Annageldy Yazmuradov
Parliament: Assembly (Mejlis of Turkmenistan) - 125 seats
Elected in 2008
Next poll: 2013
COUNTRY RISK
Standard & Poor's
N/A
N/A
Country vs. World Median
Moody's
N/A
COFACE
D
N/A
The political and economic risks are very
high and business environment can have
a very significant impact on corporate
payment behaviour. Corporate default
probability is very high.
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
SECURITY RISK
Control Risks 2010
B
M/L
Medium, low risks in Ashgabat
Overall
Financial
Business
Turkmenistan
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
5.11 Urban population
22.0 HDI ranking
49.5
87/169
Exchange rate (TMT/USD):
2.85 (09/2011)
* Market-friendly reforms and the potential of large energy reserves in Turkmenistan will spur increased investment activity, which will
sustain strong economic growth over the next several years. The domestic economy will remain largely unreformed, with production
orders and domestic prices still heavily centralized and controlled. Endemic corruption, low tax rates, massive welfare spending, and
public subsidization of loss-making companies have strained fiscal policy to the brink of destabilization despite huge energy export
earnings. Currently, roughly 70% of all government spending is dedicated to social and welfare spending, including the provision of free
gas, salt, water, and electricity to the entire population. A fiscal crisis will loom should financing demands increase or revenues dip for a
prolonged time.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
20
15
14,3
15
11,4
10
9,2
10
11,8
8,8
6,7
5
3,9
5
4,0
3,8
2009
2010
7,0
4,1
0
2011 f
2012 f
0
-5
-2,7
2009
-10
8,7
6,8
6,1
2010
2011 f
2012 f
-5
-7,8
Turkmenistan
Russia
Turkmenistan
Russia
Interest rates (%)
Current Account Balance (% of GDP)
14
20
13
10
5,1
4,8
4,0
0
2010
No Data
12
2,8
2,1
-5,2
2009
5,3
11
2011 f
2012 f
10
-10
9
-18,9
-20
8
Turkmenistan
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Russia
External debt (% GDP)
Fiscal balance (% of GDP)
2009
2010
2011 f
2012 f
25,0
10
8
22,9
7,7
20,0
6
15,4
4
2,8
15,0
1,2
2
0,9
-2
-1,5
-4
-1,6
5,0
3,7
-4,2
-6
-8
9,9
10,0
0
0,0
-6,3
2009
Turkmenistan
Russia
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Turkmenistan is slowly dismantling the institutional legacy of the idiosyncratic regime of former president Saparmurat Niyazov. Part of
this was the introduction of a new Constitution that also created a more agile parliament. The President Berdymukhammedov restored the
internationally accepted term for compulsory school education (10 years), reinstated state pensions and allowed for public internet
access. However, he warned that Turkmenistan will pursue its own developmental path, which does not include the incorporation of
democracy. The government appears fully in control of the society, and any change will be driven by competition within the elite regional
and ethnic clans, which is yet to transpire.
* Turkmenistan looks well insulated from political unrest in the Middle East. The maintenance of an extensive and generous subsidy
system for the population reduces social discontent, and there appears little prospect of radical Islam gaining a foothold.
* The leadership policy has been to welcome all, in the hope of securing the largest possible amounts of foreign investment into the
development of its energy sector. If there is one external actor Turkmenistan leaders would listen to, it is Kazakhstan, and indirectly
through it, Russia.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
4.3 GW
Production (2009)
Consumption (2009)
Electricity matrix
(installed capacity)
in 2009
Gas
100%
Natural gas
16 TWh
11 TWh
(Source: EIA)
Proven reserves (2010)
Production (2009)
Consumption (2009)
265 TCF
1,346 BCF
710 BCF
Turkmenistan is essentially self-sufficient in energy resources, with natural gas by far the most plentiful resource. Proven reserves of
natural gas are among the world's largest.
Electricity
* The country's electricity sector is fully controlled by the State, which holds the generation, transmission and distribution capacities.
Turkmenistan's total power installed capacity was 4.3 GW in 2009. Electricity production reached 16 TWh in 2009, generated by 7 gasfired power stations. In 2010, a new gas-fired power plants started operating in Avaza (capacity of 254 MW) and another gas-fired power
plant should be built in 2011 in Ashkhabad. Electricity generation exceeds domestic demand and the surplus could be exported to
Pakistan, Afghanistan and Turkey via Iran, when interconnection infrastructures will be operational. Turkmenistan and Tajikistan have
signed an agreement for the supply of 1 TWh/year on a 5-year period.
Gas
* Turkmengas is the national gas production company. Production capacities are owned by the Turkmen State, even if 10% of the market
has been privatized. Transportation and distribution capacities are vertically integrated in the national company Turkmenneftgaz.
Turkmenrosgaz (56% State, 44% Gazprom) manages gas exports to Russia. There is no independent regulator on the gas market. The
oil and gas sector represents 90% of total foreign investments.
* Turkmenistan holds the 4th largest gas reserves in the world, estimated at 265 trillion cubic feet (TCF). All major gas fields in
Turkmenistan have been producing for more than 25 years and are exhibiting signs of natural depletion. In 2006-2007, the government
announced the discovery of the South Jolotan (estimated reserves between 4 and 14 TCF) and the Osman fields. In a way to improve its
production, Turkmenistan considers now the exploitation of Caspian reserves. Previously, Turkmenistan’s largest viable export pipeline,
carrying the vast majority of all shipments, was through and controlled by Russia, leaving the country vulnerable to export interruptions.
* The Turkmen regime has however developed projects with foreign investors. In December 2009, Turkmenistan signed contracts with the
leading companies of South Korea (consortium of LG International Corp. and Hyundai Engineering Co. Ltd), China (CNPC Chuanging
Drilling Engineering Company Limited) and the United Arab Emirates (Gulf Oil&Gas Fze, Petrofac International LLC) to begin commercial
development of the South Iolotan gas field in the East of the country. These agreements amount to 9.7 Bn USD.
* In 2009, Turkmenistan's production dropped sharply to 40.2 Gm³ from 2008 levels of 73 Gm³. This was initially caused by a rupture on
one of the pipeline carrying Turkmen gas to Russia, and led to a stop of Russian imports for the rest of 2009. The objective of the
Government is to raise production by 4 by 2030 to 230 Gm3 and to raise exports by 7, with new pipelines.
* Turkmenistan is diversifying its gas exports routes. Thanks to the new Central Asia-China gas pipeline, inaugurated in December 2009,
Turkmenistan started providing China with gas through the 1830 km pipeline between Saman-Depe and Xin Jiang. Turkmenistan plans to
rise exports to China from 6 Gm3 in 2010 to 12 in 2012. In January 2010, the Turkmenistan-Iran gas pipeline (8-9 Gm³ capacity) became
operational. President Berdymukhammedov announced in November 2010 that there might be a raise of gas exports to Iran to 20 Gm3
per year. The country is involved in 2 other pipeline projects. The Pre-Caspian pipeline, which aims to increase gas exports to Russia by
10 Bcm. The East-West pipeline is planning to link the country's eastern gas fields to western side. Its construction has been launched in
May 2010, for completion in 2015.
*Turkmenistan will also continue to promote plans for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, but construction
is unlikely unless the security situation in Afghanistan and Pakistan improves.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
97 (urban)
98
Waste
(Source: Unstat 2009)
Municipal waste collection (mt)
Municipal waste landfilled
N/A
N/A
Water: * The state of the water supply and sewerage systems are very poor. Since the fall of the Soviet Union, the quality of water supply
services drastically decreased. Currently, it is still a challenge to provide water with required quality and in the needed volume down to
individual consumers. Sewage systems are available only in the major cities. The amount of sewage water being drained by the sanitation
systems is only about 35% of the water volume being delivered by the centralized water supply systems.
* Sustainable access of population to safe drinking water and sanitation has officially been declared as a priority policy by the
Government. This policy is implemented through the development of centralised systems of wastewater services and water supply. A
number of laws and regulations are related to the water and waste water sector, including the New Water Code (2004). Participation of the
private sector the water services in Turkmenistan is weak. Tariffs are set by the government and public organisations. These tariffs are
much lower than actual costs involved.
Last update: September 2011
UKRAINE
POLITICAL BACKGROUND
Type of government: Constitutional Republic
President : Viktor Yanukovych (Party of Regions), elected in February 2010, next poll in January 2015
Prime Minister : Mykola Azarov, appointed in March 2010
Key Ministers: Minister of Energy and Coal Industry: Yuriy Boyko
Minister of Environmental Protection and Natural Resources: Mykola Zlochevskyy
Parliament: Parliament of Ukraine (Verkhovna Rada) - 450 members
Elected in: September 2007
Next poll in 2012
COUNTRY RISK
Standard & Poor's
B+
Moody's
B2/STA
Country vs. World Median
Non investment grade
Speculative, high credit risk
COFACE
D
The political and economic risks are very
high and business environment can have a
very significant impact on corporate
payment behaviour. Corporate default
probability is very high.
SECURITY RISK
B
Control Risks 2010
L
(Five-year risk aggregates)
45
40
35
30
25
20
15
10
5
0
Low
Overall
Financial
Business
Ukraine
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
45.45 Urban population
137.9 HDI ranking
68.1%
69/169
Exchange rate (UAH/USD): 7.97 (09/2011)
Ukraine was severely hit by the global economic crisis, with a GDP collapsing by about 15% in 2009 as a result of the weakness of both
domestic and foreign demand and the impact of the fall of the hryvnia. Despite a gradual recovery of consumer spending and significant
financial aid from the IMF, Ukraine's economic rebound is still modest. Investment activity is however expected to rebound in 2011 thanks
to relatively favorable political circumstances. The strength of domestic demand generally remains contingent on the scale of fiscal
consolidation, as measures like gas-price hikes are weighing heavily on households’ purchasing power.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
20
10
4,8
4,2
5
5,2
15,9
15
3,8
4,0
4,1
0
2009
2010
2011 f
2012 f
10
11,8
9,4
-5
8,1
8,7
-7,8
6,8
5
-10
-15
8,8
-14,8
6,7
0
2009
Ukraine
Russia
2010
2011 f
Ukraine
Current Account Balance (% of GDP)
2012 f
Russia
Interest rates (%)
30
10
5,1
4,8
4,0
5
Short-term interest rate
Long-term interest rate
25
2,8
20
0
-1,5
15
-2,1
-5
-3,9
-4,6
2011 f
2012 f
10
-10
2009
2010
Ukraine
2009
Fiscal balance (% of GDP)
2010
5
Russia
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
0
100,0
88,2
85,1
-2
-1,5
-1,6
-2,1
84,3
85,8
2010
2011 f
2012 f
80,0
-2,7
-4
-3,4
60,0
-4,2
40,0
-6
-6,3
-5,8
20,0
-8
Ukraine
Russia
2009
Last update: September 2011
POLITICAL OUTLOOK
* Since his victory in February 2010, Viktor Yanukovych managed to form a ruling coalition in Parliament. He appointed his right-hand man
Mykola Azarov as the new Prime Minister. The weight of the opposition in Parliament, as well as frequently changing alliance, are likely to
be at the root of the future instability.
* Transfer of large-scale state assets into private hands is one of the most problematic issues for the Ukrainian economy. Former PM Ioulia
Tymochenko is under trial for economic crimes.
* Ukraine refuses to join the Free Trade Zone with Russia, Belarus and Kazakhstan.
* Although EU membership is a distant prospect, a deepening of economic links with the EU is expected under Mr Yanukovych. Work is
under way on a new "enhanced agreement" with the EU, including a deep free-trade deal, to replace the existing Partnership and Cooperation Agreement (PCA). Ratification of an enhanced agreement with the EU will take several years, although the free-trade deal would
come into force sooner.
ENERGY OUTLOOK
Nuclear
24%
Electricity
(Source: Enerdata)
Capacity (2009)
54.6 GW
Hydro
9%
Gas 25%
Electricity matrix
(installed capacity)
in 2009
Production (2009)
Consumption (2009)
Natural gas
Oil
2%
Coal
40%
173 TWh
133 TWh
(Source: EIA)
Proven reserves (2010)
Production (2009)
Consumption (2009)
39 TCF
715 BCF
1,560 BCF
* The Ukrainian Energy Strategy 2006 -2030 has been approved by the government in 2006. Its main objectives are to improve the
country's energy security and maintain Ukraine's position as an oil and gas transit country. The energy policy priorities are to support and
increase the oil and gas volume transiting through Ukraine, to lower the energy intensity and improve energy efficiency, to integrate the
energy sector in the European system and strengthen the national energy production. In its strategy to gain more independency from
Russia, Ukraine created a state-company to manage a national GNL project construction. Feasability studies are progressing.
* Ukraine holds important energy resources, mainly coal (32 Gt) and natural gas (1,100 Gm³). Oil resources are more modest, amounting
to 54 Mt. The country offers strong potential for renewable energies, waste and non conventional energy sources. The Energy Strategy
aims to bring the share of renewable energies in the total primary energy consumption to 16.5% in 2030.
* Energy consumption in Ukraine has sharply declined in the 1990's, and had been slowly recovering before the economic crisis of 2008.
The oil consumption was divided by 6 between 1990 and 2000, and continues to decline.
* The main challenges for Ukraine are its capacity to realize significant energy savings and the reimbursment of its debts towards producer
countries.
Electricity
* Ukrenergo is the national company managing the transmission electricity system. The privatization of the 27 power distribution
(oblenergos) and 4 power production companies started in 1997. Up to now, the majority of the oblenergos have been privatised. The
National Electricity Regulatory Commission has been created to set prices, attribute operation licenses and ensure consumer protection.
* Total installed capacity amounted to 54.6 GW in 2009. Ukraine has sufficient generating capacity to supply more than twice its electricity
needs, but the country’s ageing infrastructure is in need of investment and maintenance.
* Energoatom is responsible for nuclear power production, nuclear waste and uranium extraction. Ukraine holds 2 uranium mines under
operation in Zholoty Vody and Dnipropetrovsk, producing 800 tons/year. There are 15 nuclear reactors in the country, located on 4 sites,
for a total capacity of about 12 GW. The biggest plant is Zaporozhe nuclear plant (6 GW). Kiev intends to build 11 new reactors by 2030.
* Ukraine and Slovakia have signed a long term export contract for the supply of 2 to 4 TWh of electricity per year.
Gas
* Naftogaz is the public company responsible for oil and natural gas production, imports, refining and distribution. The State company
Ukrtransnafta manages the transport network. Naftogas is undergoing a major restructuring and will be closed later. Newly created
independent companies - Ukrgasdobycha, Ukrtransgaz, Chernomorneftegas, Ukrtransnafta and some other will be subject to privatization
in 2012. The privatization will be carried out by the IPO of these companies an by the partial sale of shares through a stock exchange. It is
expected that the budget will receive US$ 10-12 bln for investment, which will be directed to energy efficiency programs and to increase
gas production in Ukraine.
* Despite holding important reserves, Ukraine's gas production has collapsed since the fall of the USSR, to reach 20.9 Gm³ in 2009, and is
by far not sufficient to cover the country's gas needs.
* To satisfy its domestic demand, Ukraine imports gas from Russia and Turkmenistan. The country's debt towards the 2 countries, the gas
imports and transit tariffs, have led to numerous litigations between Ukraine and its gas suppliers. In April 2010, Russia announced a 30%
decrease in the prices of gas supplied to Ukraine, as a counterpart of the maintaining of a Russian naval base in Sebastopol until 2042.
* Ukraine is a major natural gas transit country between the producing countries (Russia, Central Asia) and Europe: in 2009, 110 Gm³ of
gas has transited through Ukraine. The current Ukrainian gas transit network has a capacity of 143 billion m³/year. The EU imports from
Russia represent a quarter of its gas consumption, 80% of which passes through Ukraine.
* Ukraine has recently embarked on a bitter feud with Russia over a reduction of the price it pays for gas imports from Russia, triggering
concerns for yet another gas war. However, its bargaining position is weakened as Gazprom starts exploiting the new Nord Stream pipeline
in October 2011. By estimations of Fitch Ratings, the loss of Naftogas Ukraine from commissioning of gas pipeline Nord Stream will make
20 % of a transit gain.
* Ukraine intends to reduce its gas imports from 56.4 Gm³ to 9.4 Gm³ by 2030 by increasing its own gas production (shale gas), the
introduction of energy-saving technologies and the replacement of imported gas by domestic coal. Ukrainian minister of natural resources
announced that the shale gas reserves of the country were estimated at 30 trillion m3.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
98
95
Waste
(Source: Unstat 2009)
Municipal waste collection (Mt)
Municipal waste landfilled
4,445*
N/A
*only separated solid
domestic wastes
Water: * Water and sanitation services in Ukraine went into decline after the collapse of the USSR. The result was drops in water and
sanitation coverage, higher prices for consumers and increased concerns about the quality of drinking water. The water infrastructure is
obsolete. 80% of the water distributed is unfit for consumption, partly due to the obsolescence of water pipes. The Government has to
implement a new investment policy in the field of municipal infrastructures, no longer following productivist criteria, but seriously taking into
account budgetary efficiency. The Government approved in March 2011 the draft Law of Ukraine "On State Programme" Drinking Water of
Ukraine "for 2011-2020". The program provides to organize zones of sanitary protection of sources of drinking water in 2234 intake, to
construct and reconstruct 570 water facilities, implement of 23 000 additional cleaning stations water and points their spill; to construct and
reconstruct sewage; to develop optimization schemes of water supply systems and wastewater services and to equip water quality control
laboratories. Total budget for 2011 is 37 MEUR for water treatment. World Bank will participate to the providing equipment improvement
with a 13 MEUR credit allocation.
Waste: * Ukraine faces major challenges in the waste sector. According to the Ministry of Environment, the country accumulated 30 billion
tons of waste (i.e. 50,000 tons per square kilometer, the highest rate in the world). More than 160,000 ha of land are occupied and used for
waste disposal in Ukraine. Most of the country's 3,000 landfills have exceeded their capacity, and do not comply with ecologic security
standards. Apart from these official landfills, around 3,300 savage landfills appear each year in Ukraine. The total cost of comprehensive
implementation of new technologies for municipal solid waste collection, installation of sorting and recycling facilities and construction of
new regional sanitary landfills is estimated at 16 billion USD. There are 2 incineration facilities in Ukraine, burning only 2.5% of total waste
volume, and need renovation. In 2010, the Ukraine government amended its municipal waste law, which introduced a separate municipal
waste collection system in the country. Waste incineration is also restricted to energy generation purposes only under the new law, which
also prohibits the development, construction and exploitation of the municipal waste landfills which are not equipped with underground
water protection and biogas and filtrate collection and treatment systems.
VII-ASIA-PACIFIC
Australia
China
Hong-Kong
India
Indonesia
Japan
Laos
Malaysia
Pakistan
Philippines
Singapore
South Korea
Thailand
Vietnam
Last update: September 2011
AUSTRALIA
POLITICAL BACKGROUND
Type of government: Constitutionnal monarchy - Federal democracy
Head of State: Queen Elizabeth II (represented in Australia by a governor-general Quentin Bryce)
Prime Minister Julia Gillard (since June 2010) (Australian Labor Party - ALP)
Key Ministers: Minister of Resources and Energy: Martin Ferguson (ALP)
Minister for Climate Change and energy efficiency: Greg Combet (ALP)
Minister of Sustainability, Environnement, Water : Tony Burke (ALP)
Parliament: Bicameral : House of Representatives: 150 seats ; Senate: 76 seats
Elected in: August 2010. Next election: November 2013
COUNTRY RISK
Country vs. World Median
Standard & Poor's
AAA
Investment grade
Moody's
AAA
Stable outlook
30
The political and economic situation is
25
(Five-year risk aggregates)
35
20
good.
A1
COFACE
Business
environment
also.
15
10
5
Corporate default probability is low .
0
SECURITY RISK
B
Control Risks 2010
L
Low
Overall
Financial
Australia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Millions)
Nominal GDP (Bn USD)
22.6 Urban population
1 494 HDI ranking
89.1%
2/170
Exchange rate (AUD/USD): 0.957 (09/2011)
Following the floods in Queensland and Victoria, real GDP growth is expected to slow to 1.8% in 2011, from 2.7% in 2010. Growth will then average
3.3% a year in 2012-15. To raise the estimated A$5.6bn (US$5.9bn) required to fund rebuilding in the affected States, the government is aiming to
generate A$3.8bn by cutting spending on a range of environmental and infrastructure projects, with the rest derived from a one-off income tax levy
in fiscal year 2011/12 (July-June). But relative to other developed economies, Australia’s public finances will remain healthy. However, there are
concerns that growth is too heavily concentrated in the resources sector, where a boom has sent Australia’s terms of trade soaring to their highest
level in 150 years. The sector will continue to drive growth, both in terms of exports and investment in new facilities. Planned capital spending on
resources projects is at record levels as firms attempt to cash in on the relentless demand for commodities from Asia. But other parts of the
economy are struggling: retail sales have been compromised by a rise in the saving rate, and the strong Australian dollar has hampered tourism
inflows. Nevertheless, the mining sector alone will ensure that the economy continues to expand.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
5
5
4
2,9
3,6
3
2
4
1,8
1,4
3,4
2,7
1
1,9
1,6
0
-1
2
-2
-3
2,9
2,8
3
-3,9
1,8
1,6
2,7
1,7
1
-4
0,4
-5
2009
2010
2011f
0
2012f
Australia
2009
OECD
2010
Current Account Balance (% of GDP)
2
2012f
OECD
Interest rates (%)
8
0
6
-0,5
-0,7
-2,7
-0,6
-0,8
-2,7
-2
4
-4
-3,6
2
2012f
0
-4,2
Short term interest rate
-6
2009
2010
Australia
2011f
OECD
Fiscal balance (% of GDP)
2009
2010
2011f
Net Public debt (% GDP)
2012f
35,0
-2,1
25,0
-2,9
-3,5
-4
-6
29,7
28,8
30,0
-1,2
-2
Long term interest rate
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
0
-8
2011f
Australia
28,7
22,6
20,0
-5,9
-4,7
15,0
10,0
-7,0
5,0
-8,0
0,0
-10
Australia
OECD
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
* Although the Labor Party managed to form a new government following the August 2010 general election, its majority is very slim. The next
election is due in 2013, but there is a possibility that a poll will be called before then. The battle lines have been drawn for what will be the most
keenly fought issue in the run-up to the next election, after the prime minister, Julia Gillard, revealed in July the details of a plan to tax carbon
emissions from mid-2012. The opposition Liberal-National coalition, led by Tony Abbott, whose attitude towards climate change can best be
described as ambivalent, has claimed that the tax will provoke a "people’s revolt".
* Given Australia’s extreme climate and vulnerability to deadly weather events, and its status as one of the world’s largest emitters of CO2 per head
of population, the issue is politically charged. Ms Gillard famously promised in the run-up to the 2010 election that there would be no carbon tax
under a government that she led, but the Greens made such a tax a condition of their parliamentary support for Labor. To make the measure
palatable, Ms Gillard has had to offer compensation to households concerned that fuel prices will rise and has promised subsidies to the energy
sector. As a result, the measure proposes a low carbon price of A$23 (US$24) per tonne that will apply to just 500 companies and will generate only
a modest reduction in emissions, to 95% of their 2000 levels, by 2020. The tax has been criticised as expensive and inefficient, and opinion polls
suggest that only around 35% of voters support the tax.
ENERGY OUTLOOK
Renewable
1,5%
Hydro
17%
Oil
3%
Coal
52%
Installed capacity 2009
Gas
27%
Electricity (Source: Enerdata 2009)
Capacity (2009)
56 GW
Production (2009)
246 TWh
Consumption (2009)
226 TWh
Natural gas (Source: Enerdata 2009 and Oil&Gas Journal 2010)
Proven reserves (2010)
110 Tcf
Production (2009)
1593 Bcf
Consumption (2009)
933 Bcf
Electricity
* Carbon tax announced in July 2011, and effective in July 2012: price of A$23 (US$24) per tonne.
* Australia has considerable petroleum, natural gas and coal reserves and is one of the few countries belonging to the OECD that is a significant net
hydrocarbon exporter, exporting about two-thirds of its total energy production. Australia is the world's fourth largest coal producer, after China, the
United States, and India, but it is the largest exporter. and the fourth largest exporter of liquefied natural gas (LNG). Its prospects for expanding
these energy exports in the future are promising as Asian demand for both coal and LNG is rising along with Australia's proven natural gas
reserves. Hydrocarbon exports accounted for 19% of total export revenues in 2009. Australia's stable political environment, substantial hydrocarbon
reserves, and proximity to Asian markets make it an attractive place for foreign investment.
* Approximately 82% of capacity is thermal (mostly coal) while 18,5% is renewable (mostly hydro). Coal-fired generating capacity is primarily located
in the Eastern part of the country near its coal reserves, while Western and Southern Australia rely on natural gas to fuel their power plants. As of
the beginning of 2009, Australia contained 76 billion short tons (Bst) of recoverable coal reserves.
* The country has around 107 privately owned coal mines located throughout the country. About 74% of the coal production comes from open pit
operations, with the remainder coming from underground mines. Over the last 2 decades, production has grown by 34%, with new projects
continuing to come online every year. The states of Queensland and New South Wales (NSW) together account for 97% of Australia's black coal
production, which has been increasing by an average of 3.2% per year between 2003-04 and 2008-09, supported by the addition of new capacity,
and is expected to continue to increase over the medium term. Australia also has brown coal deposits in South and Western Australia, Victoria, and
Tasmania, where it is used for domestic electricity generation.
* The export coal industry is serviced by 9 coal loading terminals located in Queensland and NSW. These terminals in June 2009 had handling
capacity of 364 cubic feet per year. Several new port infrastructure projects are in various stages of development and are expected to add about
130 million short tons to annual coal export capacity by 2014.
Gas
* Australia was the fourth largest exporter of LNG in the world in 2009, after Qatar, Malaysia, and Indonesia. According to The Oil and Gas Journal
(OGJ), the country had 110 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2010, triple OGJ's 2009 reserves estimate of 30
Tcf. The upgrade is largely a result of increased exploration and development of its unconventional as well as conventional gas sources. The
government has no ownership stake in the domestic gas industry. It is regulated by the Ministry of Industry, Tourism and Resources (MITR) and the
Ministerial Council of Energy (MCE).
* Natural gas production in Australia reached 19.8 mtpa in 2010 and is on a rising trend (+6.2% compared to 2009), with significant new projects
coming onstream in the short to medium term. Queensland and New South Wales are the main sources for coal seam gas (CSG), which accounted
for 13% of the production in 2009, while conventional gas is largely located in the Carnarvon Basin offshore North Western Australia. Much of
Australia's natural gas production is converted into LNG for export as well as for domestic consumption. A number of major new LNG projects are
under construction or planning as the Asian LNG market continues to expand. 4 projects will use conventional gas from offshore the northwest
coast and 4 will be based on LNG extraction from CSG in Queensland: Australia has more than 100 million metric tons of annual LNG production
capacity under construction.
* LNG Exports reached 17.9 million tons in 2009-10, amounting around $7.8 billion. They are expected to double by 2016, given the Asian demand.
Japan is the primary destination (11.9 tons), but other purchasers include China, South Korea, India and Taiwan. Australia’s prospects for
expanding this energy export in the future are promising as demand for LNG is rising along with Australia's proven natural gas reserves.
ENVIRONMENT OUTLOOK
Water
(Source: Aust. Bureau of statistics)
Access to drinking water (%)
100
Access to sanitation (%)
100
Waste
(Source: Aust. Bureau of statistics)
Muncipal waste collection (%)
100 %
Muncipal waste generation (2007)
43,8 Mt/year
* Less than a third (29%) of the waste generated in Australia in 2006–07 originated from household and other municipal sources. Waste from the
commercial and industrial sector (33%) and from the construction and demolition sector (38%) accounted for the rest.
In November 2009, Environment Ministers nationally agreed on a new National Waste Policy (NWP): less waste, more resources.
It sets the direction for Australia for the next decade and will update and integrate Australia’s policy and regulatory framework. The policy
encompasses wastes, including hazardous wastes and substances, in the municipal, commercial and industrial, construction and demolition
material streams and covers liquid, gaseous and solid wastes. Radioactive waste is excluded.
* Australia faces major challenges in ensuring sustainable water supply in the face of drying climate and rising demand for water. In response, the
Australian Government's framework, Water for the Future , provides national leadership in water reform. The Australian Government, together with
states and territories, is undertaking a range of actions to progress urban water reforms. These will assist to secure urban water supplies, use water
wisely, address the challenges of climate change and support healthy rivers.
Last update: September 2011
PEOPLE'S REPUBLIC OF CHINA
POLITICAL BACKGROUND
Type of government: Single-party socialist republic, ruled by the Chinese Communist Party (CCP)
Head of State: President Hu Jintao
Elected in March 2003
Prime Minister: Wen Jiabao
Since March, 2003
Next election in 2012
Key Ministers: Minister of Environmental Protection: Mr. ZHOU Shengxian
New National Energy Commission (created in Jan 2010): Chairman: WEN Jiabao
Chairman of National Development and Reform Commission: Zhang Ping and Zhang Guobao
Parliament: Unicameral National People's Congress (NPC): 2,989 delegates
Elected in: 2008
Next poll in 2012
Standard & Poor's
AA-
Investment grade
Moody's
Aa3
Positive outlook
A3
political and economic outlook and
relatively volatile but favourable business
environment
can
affect
corporate
payment behaviour. Corporate default
probability acceptable
COFACE
SECURITY RISK
B
Control Risks 2010
Country vs. World Median
(Five-year risk aggregates)
40
30
25
20
15
10
5
Except for some districts in Guangdong
province and remote border areas of
Xinjiang Uighur Autonomous Region
Low
35
0
Overall
Financial
Business
China
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
1 346 Urban population
7 166 HDI ranking
49,7%
92/170
Exchange rate (RMB/USD): 6.46 (09/2011)
After reaching an impressive 10.3% in 2010, economic growth will slow to an average of 8.5% a year in 2011-15. The rate of wage inflation will
remain rapid for this period, helping to support private consumption. But growth in investment, notably in the property sector, will decelerate relative to
its rate in 2010. Consumer price inflation (5,6% in 2011) is expected to remain a major policy issue in 2011 as the government struggles to restrain
strongly rising food prices. The renminbi should appreciate slightly against the US dollar in 2011-15. The view of the country’s trading partners that the
renminbi is substantially undervalued may change if China’s trade surplus falls, as forecast. The current policy-tightening process has largely focused
on cooling speculation in the housing market, limiting growth in bank credit and raising bank reserve requirements.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
12
7
10,3
10
6
9,2
9,2
8,3
8
5,6
4,4
4
8,4
4,1
3
6
6,8
6,8
3,3
2
5,6
4
5,6
4,6
5
2,1
1
0
2
-1
0
-0,7
-2
2009
2010
China
2011f
2012f
2009
Asia Pacific (excluding Japan)
2010
China
Current Account Balance (% of GDP)
2012f
Interest rates (%)
8
8
2011f
Asia Pacific (excluding Japan)
7
6
5,2
5,2
5,2
5,0
6
5
4
3,5
3,2
2
4
2,9
2,8
Short-term interest rate
Long-term interest rate
3
0
2
2009
2010
China
2011f
2012f
Asia Pacific (excluding Japan)
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
Fiscal balance (% of GDP)
2009
2010
2011f
2012f
0
11,0
9,0
-1
-1,4
-1,6
-2
-2,2
-1,8
9,9
2011f
2012f
9,3
8,6
8,0
-1,0
-3
9,7
10,0
7,0
6,0
-1,9
-2,0
5,0
2009
-2,7
China
Asia Pacific (excluding Japan)
2010
POLITICAL OUTLOOK
Last update: September 2011
* There is little likelihood of major political reforms in 2011-2012, as China’s rulers will concentrate on maintaining stability during the transition to a
younger generation of political leaders in 2012-13, when President Hu and Premier Wen will retire and the CCP’ 18th congress select a new party
s
leadership: Xi Jinping and LI Keqiang will respectively succeed the latest. Factional struggles are then likely as the new leaders seek to establish their
independence from their predecessors and compete among themselves for control of the political agenda. There is little appetite for regime change at
present as most Chinese citizens have seen their standards of living rise sharply in recent times and expect further improvements. Meanwhile,
political tensions will continue to be generated by a number of social problems, including graduate unemployment, poor working conditions,
environmental pollution, late payment of wages and benefits, illegal eviction from homes and land, official corruption, cost-of-living issues and abuse
of power.
ENERGY OUTLOOK
Nuclear
1%
Hydro
22%
Renewable
3%
Oil
6%
Coal
66%
Gas
2%
Installed Capacity 2009
Electricity
Capacity (2009)
Production (2009)
Consumption (2009)
(Source: Enerdata 2009)
874 GW
3675 TWh
3100 TWh
Natural gas
(Source: Enerdata 2009)
Proven reserves (2009)
Production (2009)
Consumption (2009)
2751,0 Gm3
85,2 Gm3
90,0 Gm3
ELECTRICITY
* Rapidly increasing energy demand has made China very influential in world energy markets: it is the largest global energy consumer, according to
the IEA. Generation is dominated by fossil fuel sources, particularly coal. The Chinese government has made the expansion of natural gas-fired and
renewable power plants as well as electricity transmission a priority. China is also the world's largest producer and consumer of coal, accounting for
almost half of the world's coal consumption. While it has made an effort to diversify its energy supplies, other sources account for small shares of the
mix. EIA projects coal's share of the total mix to fall to 62% by 2035 due to anticipated increased efficiencies and China's goal to reduce its carbon
intensity. However, absolute coal consumption is expected to double over this period, reflecting the large growth in total energy consumption.
* The Three Gorges Dam hydro facility, the largest hydro project in the world, started operations in 2003 and is slated to be fully complete by 2012.
Many of the major developments taking place in the Chinese electricity sector recently involve nuclear power: the government forecasts that about 60
to 70 GW will be added by 2020.
The government launched the National Energy Administration (NEA) in July 2008 in order to act as the key energy regulator for the country. Linked
with the NDRC (National Development and Reform Commission), it is charged with approving new energy projects in China, setting domestic
wholesale energy prices, and implementing the central government's energy policies. The NDRC is a department of China's State Council, the highest
organ of executive power. In January 2010, the government formed a National Energy Commission with the purpose of consolidating energy policy
among the various agencies under the State Council. Generation sector is dominated by 5 state-owned companies: Huaneng, Datang, Huandian,
Guodian Power, and China Power Investment. The latest power tariff changes were from June 2010 when the government raised rates for energy
intensive industries by 50 to 100% in order to achieve energy efficiency goals for the year, leading to squeeze.
* According to some government officials, China’s electricity generation capacity may be 1,500 GW by 2020. Both generation and consumption have
increased by over 110% since 2000, and trade press reported that generation was up 20% in the first half of 2010 compared to a year earlier. EIA
predicts total net generation to increase to 10,555 Twh by 2035, over 3 times the amount in 2009.
GAS
* Although it only comprised 2% of the country’s total energy consumption in 2009, natural gas use is increasing in China, which has looked to raise
gas imports via pipeline and LNG. In 2007, for the first time in almost 2 decades, the country became a net natural gas importer. China’s production
and demand of gas has risen substantially. In 2009, China produced 2,929 Bcf, up around 8% from 2008, while the country consumed 3,075 Bcf.
Although a majority of the gas consumption is dominated by industrial users (45% in 2007), the recent growth in consumption stems from the power,
utilities, and residential sectors. The Chinese government anticipates boosting the share of natural gas as part of total energy consumption to 10% by
2030 to alleviate high pollution from the country’s heavy coal use, whereas gas demand will more than triple by 2035, growing about 5% per year. The
IEA registered a 22% increase in gas demand in 2010, and expects it to reach 260 Bcm by 2015 To meet the anticipated shortfall, China is expected
to continue importing gas via LNG and a number of potential import pipelines from neighboring countries.
As with oil, the sector is dominated by the 3 principal state-owned Oil&Gas companies: CNPC, Sinopec, CNOOC. CNPC is the largest company in
both upstream and downstream. It accounts for roughly 80% of China's total output. Sinopec operates Puguang field in Sichuan, one of China's most
promising upstream assets. CNOOC - the key LNG player in China - led the development of China's first 3 LNG import terminals at Shenzhen, Fujian,
and Shanghai, and manages much of the country's offshore production.
LNG imports in China are expected to rise as more terminal capacity comes online, though higher international LNG prices versus lower gas prices
from domestic sources and Turkmenistan could cause more competition for LNG. Consumption of LNG for 2009 rose from 2008 levels by over 12%,
and the country imported over 140 Bcf of LNG to fill the gap.
* China’s potential wealth of unconventional gas resources such as coal bed methane (CBM) and shale gas has spurred the government to seek
foreign investors with technical expertise to exploit these reserves. China is estimated to have over 1,000 Tcf of geological CBM reserves, with 350
Tcf recoverable reserves and only 6 Tcf so far of proven reserves by 2010.
ENVIRONMENT OUTLOOK
Water Source (Joint Monitoirng Program 2010)
Access to drinking water (%)
89
Waste
(Source: SE)
Muncipal waste collection
Access to sanitation (%)
55
Muncipal waste generation (2010, urban)
70%
250 Mt/year
* Mainland China is one of the world’s most active markets for private sector participation (PSP) in water. The central government has fully embraced
the idea that private firms should be financing and operating municipal water supply and sewerage services in the country’s booming cities. New
comers on the market are local/national players. But water scarcity, contamination and pollution also pose great challenges. Water – both scarcity
and pollution – is one of China’s major concerns, adressed in the 12th 5-year plan 2011-2015, with for instance water consumption per unit of valueadded industrial output to be cut by 30%.
China's water resources amount currently to about 2,000 m3/capita/year. When the population would reach 1.6 billion in 2030, the water resource
availability will be about 1,700m3/capita/year and it will be considered as a "water resource shortage country". Affected also by water pollution, about
400 cities out of the 662 cities in China have water supply shortage. Only 45% of water is used efficiently in water irrigation in China, (70%-80% in
developed countries), and only 40% of industrial water is recycled (80% in developped countries). Poor conditions of water appliance and distribution
pipelines result in about 20% of leaking.
* Responsibility for water supply and sanitation policies at the national level is shared between 2 Ministries: Ministry of Water Resources and Ministry
of Environmental Protection . Provincial governments play a relatively limited role. Local governments plays a major role, providing financing and
owning water companies that are the main service providers in urban areas.
* No nation has witnessed a growth in waste at the rate of China. Urban areas alone generate 1.5 Bn tons annually or 1kg /capita/day. The domestic
industry does not have the necessary infrastructure or expertise in efficient collection, treatment, disposal of waste, nor designing and operating
facilities. Currently, only 70% of Municipal Solid Waste (MSW) generated is collected and only 60% is treated before disposal, thus presenting
opportunities for foreign firms.
* The government has invested around 9.5 Bn USD in waste management in the past 5 years. But further investment, improvements to infrastructure
and expertise are still needed. Systems to generate energy using organic waste, which makes up 60% of MSW, could also be introduced with foreign
expertise, as well as improvment of China’s landfills which are currently poorly managed. Forecasts estimate that China’s recycling industry will
process 244.8 M tons of material in 2013, growing at a compounded rate of 9.1%/year from 142.3 million metric tons in 2008.
Last update: September 2011
HONG KONG S.A.R.
POLITICAL BACKGROUND
Type of government: Special administrative region of China, with its own mini-constitution (the Basic Law), guaranteeing a "high
degree of autonomy" until 2047.
Chief executive: Donald Tsang
Elected in March 2007
Next election: March 2012
Key Ministers: Secretary for the Environment: Edward Yau
Permanent Secretary for the Environment, Director of Environmental Protection: Anissa SY WONG
Parliament: Unicameral Legislative Council (60 members)
Elected in: September 2008
Next election in: September 2012
COUNTRY RISK
Standard & Poor's
Moody's
Aa1/positive
COFACE
Extremely strong capacity to meet financial
commitments. Highest Rating.
Very strong creditworthiness relative to other
domestic issuers.
The political and economic situation is good.
Business
environment
is
favorable.
Corporate default probability is low.
AAA
A1
SECURITY RISK
Control Risks 2010
B
L
Low
Country vs. World Median
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Overall
Financial
Hong Kong
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
7 Urban population
100%
Exchange rate (HKD/USD): 7.79 (09/2011)
Nominal GDP (Bn USD)
224 HDI ranking (2010)
21/169
* Now that the domestic economic environment has improved, policy will focus increasingly on the need to monitor and deal with the
risks associated with the recovery. In particular, care will have to be taken to limit the emergence of asset price bubbles and unsound
lending practices in the banking sector, as, despite rapid economic growth, domestic monetary conditions will be very loose in 2011-12,
due to low interest rates in the US owing to the peg of the Hong Kong dollar to the US dollar.
* The fiscal position will remain healthy, as the government recorded a budget surplus estimated at 4.3% of GDP in 2010.The Chinese
government will continue to grant Hong Kong preferential access to mainland markets in terms of trade and investment, notably under
the Closer Economic Partnership Arrangement (CEPA).
* Consumer price inflation, which reached 5.6% y.o.y. in June 2011, is emerging as a significant worry in Hong Kong.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
10
6
4,6
8
8,4
6
6,8
6,8
7,0
5,6
5,1
5,3
4
5
5,0
3,8
3
2,3
2
0
2009
2010
4,4
4
2
-2
5,6
2011 f
2012 f
2,1
1
0,6
-2,7
0
-4
Hong Kong
2009
Asia-Pacific Excluding Japan
2010
Hong Kong
Current Account Balance (% of GDP)
10
2011 f
2012 f
Asia-Pacific Excluding Japan
Interest rates (%)
4
8,6
8
3
6,2
6
5,0
4,8
4
2
3,2
2
2,9
2,8
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
0
2009
2010
Hong Kong
2009
5
2011 f
2012 f
-1
Asia Pacific Excluding Japan
Fiscal balance (% of GDP)
2010
4,3
2011 f
External debt (% GDP)
2012 f
273,9
280,0
3,9
4
260,0
3,4
240,0
3
2
Short-term interest rate
Long-term interest rate
1
3,5
1,6
253
235,9
235,4
220,0
1
200,0
0
180,0
160,0
-1
-2
-3
-1,8
-1,4
-2,0
-2,7
140,0
120,0
100,0
-4
Hong Kong
Asia-Pacific Excluding Japan
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Hong Kong’s political system is set to become slightly more democratic, after the Legislative Council (Legco, the territory’ parliament)
s
approved controversial political reforms in June 2010, just days after the central Chinese government unexpectedly accepted a proposed
amendment that will increase the proportion of directly elected seats in the legislature. The Chinese government’ apparent change of
s
heart reflected its desire to avoid a stalemate that would have added to the woes of Hong Kong’ chief executive, Donald Tsang.
s
*Although the issue of democratic reform will continue to cause tensions, overall political stability will improve in the upcoming period
2011-2015 owing to better co-operation between the government and the Legislative Council (Legco). Elections for a new chief executive
and Legco will be held in 2012. The prodemocracy camp is expected to strengthen its presence in the legislature, but the next chief
executive’ likely identity is still unclear.
s
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
11 GW
Oil
27%
Coal
44%
Electricity matrix
(installed capacity)
in 2009
Production (2009)
Consumption (2009)
38.7 TWh
41.5 TWh
Natural gas (Source: Enerdata)
Proven reserves (2009)
0 Gm³
Production (2009)
0 Gm³
Consumption (2009)
2.5 Mtep
Gas 29%
* Hong Kong has no energy resources, and thus strongly depends on imports for its energy consumption.
* The government's energy policy pursues three main objectives: ensure efficient energy supply at reasonable cost, reduce electricity
production impact on environment, and favor a rational use of energy. The energy supply is managed by the private sector.
* The 2008-2009 Policy Address by the Chief Executive makes the issue of climate change a priority for the government. The authorities
issued an ordinance on energy efficiency which set up a mandatory energy efficiency labelling scheme on some products. It set up a 150
M USD fund to subsidise energy carbon audits, and another 300 M USD fund to subsidise energy efficiency projects in buildings.
Electricity
* Total energy consumption per capita in Hong Kong is of 2 toe with the electricity consumption per capita of 5,900 KWh/year (2009).
* The Hong Kong electricity market is shared between two private companies, each controling a geographical area. CLP Power holds
80% of the market, with a total installed capacity of 6,900 MW (about 63% of the total). The second company, Hong Kong Electric
Company (HEC), holds a 20% market share and produces gas from the Lamma power plant (3,755 MW). CLP Power owns 3 power
plants: Black Point (2,500 MW), Castle Peak (4,100 MW) and Penny's Bay (300 MW). In 2008, the maximum return on investment for
the two power companies has been lowered by the government to 9.99% of their net fix assets (against 13.5-15% before).
* In September 2009, the government agreed to extend by 20 years the supply of electricity from the Daya Baya Nuclear Power Station.
Under the terms of the agreement, the supply quantity will not be less than the current level, while pricing will be agreed based on
commercial principles.
* CLP Power and HEC are developing their activities on the international level, in the Asia Pacific region (China, Taiwan, Thailand…)
* As the fight against climate change is a priority for the government, the two power companies are since 2007 subject to greenhouse
gas emissions reduction objectives, as well as a penalty system. The government aims to reduce energy intensity by 25% by 2030, and
intends to increase the proportion of gas-fired electricity generation from 29% in 2008 to at least 50%. Renewable energies are a priority
for the Hong Kong government: HEC intends thus to develop the first wind farm in Lamma island.
* Wind Prospect and CLP are partners for an offshore wind farm project (200 MW) in the south-eastern waters of Hong Kong. It will
provide clean energy for 80,000 households and will avoid over 300,000 tons of carbon dioxide emission every year. Full business case
is expected for assessment by 2011. This offshore windfarm is in support of Hong Kong Government's 1-2% renewable energy target.
This initiative will also contribute to achieve CLP’s voluntary target in its Climate Vision 2050 of increasing the non-carbon-emitting
generating capacity in the Group’s portfolio to 20% by 2020.
Gas
* All gas consumed in Hong Kong is imported, mainly from Singapore. Some gas is imported from the Shenzen LNG terminal in China to
supply the Lamma power plant.
* Consumption of gas grew at an average annual rate of 0.2% during 2005 to 2010. In 2010, 55.4% of gas was consumed by domestic
users, 41.3% by commercial users and 3.3% by industrial users.
ENVIRONMENT OUTLOOK
Water Source (HK government statistics 2009)
Access to drinking water (%)
Access to sanitation (%)
100
N/A
Waste Source (HK government statistics 2009)
Municipal waste collection (%)
Municipal waste landfilled (2009)
100
13,326 tons per day
Water: * Water quality and depollution is a priority for the Hong Kong government. Water quality has significantly improved in recent
years, thanks to the Environment Protection Department's (EPD) programme to clean up waters: the number of river monitoring station
with bad water quality has dropped from 52% in 1988 to less than 15% in recent years.
* The EPD controls waste water discharges through the Water Pollution Control Ordinance. Five sewerage and sewage treatment
projects worth a total of HK$ 840 million were approved by the Legislative Council. The Harbour Area Treatment Scheme (HATS) has
been set up to collect and treat sewage generated around Victoria Harbour. In 2000, Hong Kong and Guangdong agreed on a 15-year
plan to clean up Deep Bay, reduce and control future pollution. In 2007, Hong Kong and Shenzen agreed on a new set of water pollution
reduction targets to improve Deep Bay water quality. They also agreed in 2008 on a water quality control strategy to protect Mirs Bay. In
addition, Hong Kong and Guangdong successfully developed an advanced numerical water quality model for the Pearl River Estuary
region in 2008.
Waste: * Waste management is a urgent priority in Hong Kong, as the three strategic landfills are running out of space. Domestic waste
loads requiring disposal are down by over 10% since 2005, thanks to the government's efforts.
* There are seven refuse transfer stations in the city. They serve as centralised collection points for the transfer of waste to the strategic
landfills. Operated by the EPD, the landfill sites only accept garbage from Hong Kong. Thirteen of 16 landfills were closed from 1988 to
1996. The three remaining strategic landfills in use are located in the New Territories (NENT, WENT, SENT).
* The city generates around 6.4 MTons/yr of waste, and by 2015, existing landfills are expected to be full.The government has introduced
waste management schemes and is working to educate the public on the subject. On the commercial side, producers are taking up
measures to reduce waste.
* The Waste Disposal Ordinance is used to enforce controls on waste disposal, including collection and disposal and the import and
export of waste. The Dumping at Sea Ordinance is enforced to control disposal of dredged mud and excavated materials at designated
marine disposal sites. Livestock Waste Control Scheme has been fully implemented in the management and disposal of livestock waste.
Last update : September 2011
INDIA
POLITICAL BACKGROUND
Type of government: Parliamentary federal republic
Head of State: President Pratibha Patil
Elected in 2007
Next election in July 2012
Key Ministers: Prime Minister: Dr. Manmohan Singh (in charge of atomic energy)
Elected in May 2004, re-elected in May 2009
Minister of petroleum and natural gas: S. Jaipal Reddy
Minister of new and renewable energy: Farooq Abdullah
Minister of power: Sushilkumar Shinde
Ministry of Water Resources : Salman Khurshid
Parliament: The Rajya Sabha (the upper house) with 250 seats - the Lok Sabha (the lower house) with 545 seats
Elected in 2009
Next lower house election: May 2014
COUNTRY RISK
Standard & Poor's
BB+
Non investment grade
Moody's
Baa3
Stable outlook
Country vs. World Median
Payment behaviour is likely to be impacted by
(Five-year risk aggregates)
35
the political and economic environment which
A3
COFACE
remain favourable and volatil. Some concerns
remain
regarding
the
business
climate.
Companies' credit default is correct.
But high in Asom, Jammu and Kashmir,
Manipur, Nagaland, Tripura, Bihar,
Jharkhand, Chhattisgarh, border districts of
Orissa, northern areas of Andhra Pradesh,
western districts of West Bengal and eastern
districts of Maharashtra
SECURITY RISK
B
Control Risks 2010
Medium
30
25
20
15
10
5
0
Overall
Financial
India
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
1,241.5 Urban population
28%
Exchange rate (INR/USD): 44.7 (09/2011)
Nominal GDP (Bn USD)
2,033.8 HDI ranking
122/170
* Following real GDP growth of 8.8% in 2010/11, economic expansion is forecast to slow to 7.9% in 2011/12 before rebounding to an
average of 8.4% a year between 2012/13 and 2015/16. India’s strong growth fundamentals -—
high saving and investment rates, fast
labour force growth and a rapidly expanding middle class — ensure a steady economic performance. However, economic growth will
- will
continue to be constrained by infrastructure bottlenecks, shortages of skilled labour and the difficulties involved in shifting resources from
low-productivity agriculture to higher-productivity manufacturing. Merchandise exports surged by 81.8% year on year in July, to
US$29.3bn, on the back of a strong performance in the petrochemical, gems and jewellery, and electronics sectors. Gross fixed
investment will remain a major driver of economic growth. However, the central bank’s tightening of monetary policy in 2010-11 means
that there is a significant downside risk for investment growth in the early part of the forecast period, as high interest rates may start to
deter capital investment.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
14
12
12
12,0
10,9
10
8,8
9,1
8
8,1
7,5
8,4
6
8,2
7,0
8
6,8
6,8
5,6
4
10
6
4,6
5,6
4
4,4
2,1
2
2
0
0
2009
2010
India
2011f
2009
2012 f
2010
India
Asia-Pacific (excluding Japan)
Current Account Balance (% of GDP)
2011f
2012 f
Asia-Pacific (excluding Japan)
Interest rates (%)
14
6
13
3,5
4
3,2
2,9
2,8
12
11
10
2
9
8
0
2009
2011f
-2,9
-2
2010
-2,6
2012 f
-2,9
-2,4
7
Short-term interest rate
5
-4
6
Long-term interest rate
4
India
Asia-Pacific (excluding Japan)
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011f
External debt (% GDP)
2012 f
0
25,0
-1
-2
-1,8
-3
-1,4
-2,0
20,0
17,6
14
-2,7
16,4
17,7
15,0
-4
10,0
-5
-4,7
-4,9
-6
-7
-4,8
5,0
-6,2
0,0
-8
India
Asia-Pacific (excluding Japan)
2009
2010
2011f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The Indian National Congress-led United Progressive Alliance coalition government has a low political standing, owing to corruption
scandals and high inflation. High-profile anti-corruption protests have highlighted the corruption issue, but also the government’s
mishandling of the situation. The main opposition party, the Bharatiya Janata Party (BJP), was also tarred with the corruption brush.
Nevertheless, the issue is not currently expected to have a direct impact on political stability. Efforts at structural economic reform will be
hindered by the fact that the authorities have more pressing, immediate concerns, and by the government’s lack of a reliable
parliamentary majority.
* The government is moving to present a Land Acquisition Bill in parliament. However, the bill faces opposition within the governing
coalition, and so its passage is uncertain. The panel of economic advisers to Prime Minister, Manmohan Singh, has recommended that
the government raise the equity cap on foreign direct investment to 49% in all sectors.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2010)
203 GW
Gas
12%
Production (2010)
Consumption (2010)
Oil
3%
Wind &
Geothermic
2%
Coal 68%
Electricity matrix
(installed capacity)
in 2010
Hydro
12%
918 TWh
669 TWh
Natural gas
(Source: Enerdata)
Proven reserves (2010)
1,084 Gm³
Production (2010)
53,0 Gm³
Consumption (2010)
2284 TCF
Nuclear
3%
Electricity
India boasts a growing economy, and is increasingly a significant consumer of oil and natural gas. In 2009, it was the fourth largest oil
consumer in the world, after the United States, China, and Japan. According to IEA, coal/peat account for nearly 40% of total energy
consumption, followed by nearly 27% for combustible renewables and waste.
India suffers from chronic losses of electricity (transmission - supply lines) and from a very low usage rate of generating capacity. India
imports much of its growing energy requirements (30%). In July of 2010, India and Bangladesh signed a 35 year-power import deal
whereby India will import up to 500 megawatts beginning in late 2012. India also imports some electricity from Bhutan and Nepal.
However, these electricity imports are not likely to prove sufficient to make up for India’s lack of generation capacity. Roughly 400 million
people do not have access to electricity. Additional capacity has failed to materialize in India in light of market regulations, insufficient
investment in the sector, and difficulty in obtaining environmental approval and funding for hydropower projects. In addition, coal
shortages are further straining power generation capabilities. In order to address this shortfall, the 11th Plan set an ambitious goal of
adding nearly 79 GW by 2012. The country also grapples with electricity efficiency issues. In order to improve efficiency standards, the
Energy Conservation Act was passed in 2002, which established the Bureau of Energy Efficiency and has sought to promote efficient use
of energy and labeling of energy-intensive products.
India is both the third-largest consumer and third-largest producer of coal in the world, and though the country supplies the bulk of its
needs domestically, it is currently a net coal importer.
Although nuclear power comprises a very small percentage of total energy consumption at this time, it is expected to increase in light of
international civil nuclear energy cooperation deals. In light of the cooperation deal with the United States, the Indian government has set
its nuclear generation target at 40,000 MW by 2020. India currently has 14 nuclear reactors in commercial operation with more planned (3
nuclear reactors are in construction phase). Recently, India bought six nuclear reactors from Areva of France and four from Rosatom of
Russia. They are slated for the Maharashtra and Tamil Nadu nuclear projects. Combined, the ten new reactors will add 11,000 MW of
electric capacity to the country.
International organizations such as the World Bank are providing funding for a variety of hydroelectric projects around the country.
However, lack of reliability and environmental and community concerns surrounding construction may make it difficult to fully capitalize
upon this domestic energy resource.
Geothermal, solar, and wind power hold little importance in electric power generation in the country. However, the government would like
the share of renewables in electricity production to increase.
Gas
In spite of the electric sector’s heavy reliance on coal, natural gas is becoming increasingly important due to environmental
considerations, quality concerns pertaining to the steel industry, and supply constraints surrounding coal. In addition to pursuing domestic
oil and gas exploration and production projects, India is also stepping up its natural gas imports, particularly through imports of LNG. The
bulk of India’s natural gas production comes from the western offshore regions, especially the Mumbai High complex, though the Bay of
Bengal and its Krishna-Godavari (KG) fields are proving quite productive. The onshore fields in Assam, Andhra Pradesh, and Gujarat
states are also significant sources of natural gas production.
India’s SOEs account for the bulk of the production. State-run companies ONGC and Oil India Ltd are the main producers. ONGC
accounted for 69% of the production in 2007. Some foreign companies participate in upstream developments in JVs and production
sharing contracts (PSCs). Privately-owned Reliance Industries will also have a greater role in the natural gas sector in the coming years,
as a result of a large natural gas find in 2002 in the KG basin.
The Gas Authority of India Ltd. holds an effective monopoly on natural gas transmission and distribution activities. In December 2006, the
Minister of Petroleum and Natural Gas issued a new policy that allows foreign investors, private domestic companies, and national oil
companies to hold 100% equity stakes in pipeline projects.
India’s natural gas import demand is expected to increase in the coming years. To help meet this growing demand, a number of import
schemes including both LNG and pipeline projects have either been implemented or considered: Iran-Pakistan-India Pipeline,
Turkmenistan-Afghanistan-Pakistan-India Pipeline, and imports from Myanmar.
Nearly 75% of LNG imports are from Qatar, making it the sixth largest importer of LNG in the world. India imports LNG through both longterm contracts and spot shipments. It has 2 operational LNG import terminals, Dahej (Petronet LNG) and Hazira. A 2nd terminal for
Petronet LNG is under construction in Kochi, with supply from Australia’s Gorgon LNG project.
While negotiations are currently underway for several long-term LNG supply deals, whether or not India’s bids will be accepted is
questionable in light of the low prices that it has offered to pay. Instead, India is becoming an important destination for spot LNG cargoes.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
88
31
(Source: Unstat 2001)
Municipal waste collection
Municipal waste generation
50% to 90%
42 M tons
Water: * None of the 35 Indian cities with a population of more than one million distribute water for more than a few hours per day, despite
generally sufficient infrastructure. The water service is poor, both in quality and quantity terms. Water is traditionally considered as a public
good being actually free of charge. The water public operators thus lacks financial self-sufficiency to make the necessary maintenance
and investments. The government is aware of a growing water crisis and launched schemes to boost investments in urban services in 63
cities in India. Water supply and sanitation is a State responsibility. States may give the responsibility to the PRI in rural areas or
municipalities in urban areas, called Urban Local Bodies (ULB). At present, states generally plan, design and execute water supply
schemes (and often operate them) through their State Departments or State Water Boards.
* Reforms in the water sector are being implemented for almost two decades, largely led under the influence of loans provided by the
International Financial Institutions, aiming to promoting financial sustainability in the water sector operations through privatization. Many
States have thus passed privatization acts and initiated the process to form independent water regulatory authorities.
Waste: * Collection efficiency ranges between 50% to 90% of the solid waste generated. Hardly any fund is spent on treatment and
disposal of waste. The waste sector suffers from various lacks: lack of planning for waste management, of proper institutional set up for
planning and designing in urban local bodies, of technically trained manpower and of expertise and exposure to city waste management
using modern techniques / best practices. E-waste has moreover become a major issue in India.
Last update: September 2011
INDONESIA
POLITICAL BACKGROUND
Type of government: Presidential Democracy
Head of State: Mr. Susilo Bambang Yudhoyono (Democratic Party-PD). Chief of State and Head of Government
Elected in 2004 and re-elected in June 2009
Next election: first round in July 2014
Key Ministers: Coordinating Minister for Economic affairs: Hatta Rajasa (equivalent to n°3 of Government)
Minister of Energy & Mineral Resources: Dr Darwin Saleh
Ministry of Environment: Gusti Muhammad Hatta
Parliament: People's Consultative Assembly (MPR) : 560-member in the House of People's Representatives (DPR) + 132
regional representatives (DPD).
Elected in: 2008 2009
April
Next poll in 2014
Country vs. World Median
Non investment grade. More prone to
BBStandard & Poor's
(Five-year risk aggregates)
changes in the economy
40
Ba1
Moody's
35
Stable outlook
30
Political and economic uncertainties and
an
occasionally
difficult
business
environment
can
affect
corporate
payment behaviour. Corporate default
probability is quite high.
B
COFACE
SECURITY RISK
Control Risks 2010
B
25
20
15
10
5
0
But high in Maluku, Aceh, Papua, West
papua
Medium
Overall
Financial
Indonesia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
242 Urban population
46%
Exchange rate (IDR/USD): 8637,1 (09/2011)
Nominal GDP (Bn USD)
846 HDI ranking
111/170
* The economy expanded by 6.5% year on year in the second quarter, the same pace of growth recorded in the first quarter. Private
consumption, investment and exports all contributed to growth. The House of People’s Representatives (DPR, the legislature) has
revised the 2011 budget to reflect the spiralling cost of subsidies. The budget deficit is now expected to widen to 2.1% of GDP this year,
from 1.8% previously. Total investment rose by 22.1% year on year in the second quarter of 2011, to US$7.2bn. In the period foreign
investment increased by 21%. Reforms aimed at addressing the shortcomings of the country’ business environment and moving the
s
economy onto a faster growth path will move forward in a stop-start manner. The lack of infrastructure constitutes also a bottleneck.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
12
10
10
8
8
6,8
6,8
8,4
5,6
6
5,4
5,1
5,6
6
4
5,4
6,2
6,1
4
5,9
4,8
4,6
4,4
4,6
2
2
0
0
2,1
2009
2010
Indonesia
2011f
2012f
Asia Pacific (excluding Japan)
2009
2010
Indonesia
2011f
2012f
Asia Pacific (excluding Japan)
Interest rates (%)
Current Account Balance (% of GDP)
10
5
4
8
4
3,2
2,9
2,8
1,4
1,3
3
2,0
4
2
0,8
1
Indonesia
0
6
2009
2
Asia Pacific (excluding Japan)
2010
2011f
Short-term interest rate
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
2012f
Fiscal balance (% of GDP)
2009
2010
2011f
External debt (% GDP)
2012f
0
35,0
30,0
-2
29,2
-0,6
-1
-0,9
25,0
-1,0
-1,4
-1,6
-1,8
22,7
19,9
20,0
16,9
-2,0
15,0
-3
-2,7
10,0
5,0
-4
Indonesia
Asia Pacific (excluding Japan)
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
* The president S, Bambang (SBY) successfully guided Indonesia through the 2008-09 global financial crisis. However, he has since lost
some of support from voters. His promises to clean up politics have started to sound hollow amid a corruption scandal besetting his own
party's (the Democratic Party-PD) treasurer. Conflicting views on reform exist within the governing coalition (formed with the parties
Golkar and Prosperous Justice): reforms pushed up by SBY are encountering resistance from vested interests. Indonesia will elect a new
president in 2014. A requirement of the election law means that the next president is most likely to be the nominee of one of the country’s
three main political parties.
ENERGY OUTLOOK
Hydro
10%
Oil
34%
Geothermal
and wind
2%
Coal 22%
Installed capacity 2010
Gas
32%
Electricity (Source: Enerdata 2010)
Capacity (2010)
48 GW
Production (2010)
163 TWh
Consumption (2010)
138 TWh
Natural gas (Source: EIA 2010)
Proven reserves (2010)
106 TCF
Production (2010)
2924 BCF
Consumption (2010)
1429 BCF
Electricity
*Indonesia is the only Southeast Asian member of OPEC, although the country became a slight net oil importer in 2004. Coal production
has increased in recent years, and today the country is one of the world’s chief coal exporters.
Although Indonesia generates 86% of its electricity from conventional thermal sources (coal, gas, and oil), it was the third-largest
generator of geothermal power in 2009. Though no longer a net exporter of oil, it is a leading exporter of both coal (2nd largest) and
natural gas (4th largest). As domestic energy needs grow, Indonesia is increasingly trying to focus on securing energy sources for its
domestic market. However, as a result of inadequate infrastructure and complex business environment, it has struggled to attract
sufficientinvestment to meet its energy development goals.
* Indonesia is also a significant consumer of traditional biomass in its residential sector, particularly in the more remote areas that lack
connection to Indonesia's energy transmission networks (power grids and pipelines, for example). The IEA estimates that combustible
renewables and waste account for about a quarter of total primary energy supply.
* State-owned electric utility PT PLN (Perusahaan Listrik Negara) is the most significant company in the electric power sector. PLN owns
and operates 86 percent of the country's generating capacity through its subsidiaries, and maintains an effective monopoly over
distribution activities. Although the most recent 2009 Electricity Law ends PLN's distribution monopoly, sufficient implementing regulations
to support this law have yet to come into effect.
* As of 2009, only 65% of the population had access to electricity. In addition, because capacity growth has lagged behind the pace of
electricity demand growth, grid-connected areas have also suffered from power shortages. Investment in Indonesia's power sector had
lagged for several reasons, including inadequate supporting infrastructure, difficulty in obtaining land-use permissions, subsidized tariffs,
and an uncertain regulatory environment. In order to address the capacity shortage, in 2006, the government embarked upon the first
stage of its "fast track" plan, designed to add 20 additional GW to the grid by 2014. The first stage, which includes 10 GW of primarily coalbased generation, was initially set for completion in 2010 - though subsequent delays have led to a revised completion date of 2013. The
second phase, which includes an additional 10 GW to be completed by 2014, includes more cleaner sources of generation such as
natural gas and renewables, among which + 4 GW of additional geothermal capacity, most of which will be operated by independent
power producers. The Government's plans to increase the use of renewable energy to 15% of the electricity portfolio by 2025 are mainly
centered on development of geothermal resources, the country having the biggest potential in the world.
Gas
* Indonesia is the fourteenth largest holder of proven natural gas reserves in the world, and the third-largest in the Asia-Pacific Region.
According to the Government, more than 70% of the country’s gas reserves are located offshore, with the largest reserves found off
Natuna Island, East Kalimantan, South Sumatra, and West Papua (also known as Irian Jaya).
* Indonesia had 106 Tcf of proven natural gas reserves as of January 2011. Although domestic consumption has nearly doubled since
2004, the country continues to be a major exporter and was the world's sixth largest net exporter of in 2009. Although the majority of the
gas exports are transported as LNG, Indonesia also exports about a quarter of its gas via pipeline to Singapore, with which it has two
pipeline connections.
BPMigas serves as the upstream regulator, and state-owned PT Pertamina - though still active in upstream exploration and production no longer plays a regulatory role. Pertamina accounts for about 15 percent of natural gas production. International oil companies such as
Total, ConocoPhillips, and ExxonMobil dominate the upstream gas sector, while natural gas transmission and distribution activities are
carried out by the state-owned utility Perusahaan Gas Negara (PGN).
An increasingly large majority of Indonesia's natural gas production has come from non-associated fields in recent years, with associated
gas accounting for about 18% of gross production in 2009. In addition to its considerable conventional gas resources, Indonesia also
holds an estimated 453 Tcf of coalbed methane (CBM), primarily in South Sumatra and Kalimantan
The country was the third-largest exporter of LNG in 2009, following only Qatar and Malaysia. There are three operational liquefaction
terminals in Indonesia, with a combined production capacity of about 1.6 Tcf per year. In 2009, it exported about 950 Bcf of LNG. Japan is
the major destination for Indonesia's LNG exports, accounting for about 65%, but South Korea and Taiwan are also significant importers.
Bontang terminal in East Kalimantan is the largest in Indonesia, and one of the largest in the world.In order to have more flexibility to
secure supplies of both domestic and foreign LNG, plans for several LNG receiving terminals are underway in Indonesia.
ENVIRONMENT OUTLOOK
Water
(Source: WHO and UNICEF data, 2008)
Waste
(Source: European Journal of Scientific Research 2010)
Access to drinking water (%)
80
Muncipal waste collection
70%
Access to sanitation (%)
52
Muncipal waste generation (2006)
38,5 Mt/year
* Over 100 million people in Indonesia lack access to safe water and more than 70% of the country’s 220 million population relies on
water obtained from potentially contaminated sources. Policy responsibilities are fragmented between different Ministries and local utilities
that operate and maintain urban water systems remain weak : while the Ministry of Health is responsible for water quality-related aspects,
and to a certain extent rural services, responsibility for the urban sector is shared between the Ministry of Home Affairs and the Ministry of
Public Works. The National Development Planning Agency (Bappenas) has a role in planning investments. The Ministry of Industry and
Trade also has some responsibilities for the regulation of bottled water. A National Water Supply and Environmental Sanitation Working
Group (Pokja AMPL) coordinates between departments and with donors and other stakeholders. The working group does not have a
legal basis, nor secure funding.
Domestic sewage, industrial effluents, agricultural runoff, and mismanaged solid waste are polluting surface and groundwater, especially
in Java. Indonesia ranks among the worst countries in Asia in sewerage and sanitation coverage. Few Indonesian cities possess even
minimal sanitation systems. The absence of an established sanitation network forces many households to rely upon private septic tanks
or to dispose of their waste directly into rivers and canals. The commonality of the latter practice, together with the prevalence of polluted
shallow wells used for drinking water supply in urban areas, has led to repeated epidemics of infections.
* Inadequate waste management law led to inefficient solid waste management in Indonesia. The current practices focusing on ‘the endpipe-approach’ bring about the problem in final disposal site. Many cities are facing the problem of overburdened landfill because of
limited land availability and open dumping sites equipped with no sanitary system, such as soil cover, leachate collection and treatment
system polluting the environment through CH4 emission and leachate intrusion into ground and surface water.
Last update: September 2011
JAPAN
POLITICAL BACKGROUND
Type of government: Representative democracy
Head of State: Emperor Akihito
Prime Minister: Yoshihiko NODA, since September 2011
Key Ministers: Minister of Economy, Trade and Industry; Nuclear Incident Economic Countermeasures; responsible for
Energy: Yukio EDANO
Nuclear Disaster and Environment Minister : Goshi Hosono
Parliament: House of Representatives with 480 members - House of Councillors with 242 members
Elected in 2009
Next poll in 2013
COUNTRY RISK
Very strong capacity to meet financial
commitments.
Standard & Poor's
AA-
Moody's
Aa3/STA
COFACE
A1
SECURITY RISK
B
Control Risks 2010
L
Very low credit risk
The political and economic situation is
good. Corporate default probability is low
on average.
Low
Country vs. World Median
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Overall
Financial
Business
Japan
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
128 Urban population
5,460.3 HDI ranking
66.8%
11/169
Exchange rate (JPY/USD): 77.29 (09/2011)
*A large earthquake, 8.9 on the Richter scale, occurred in early March, sending a tsunami into low protected areas causing thousands of
deaths and major damages, the most serious of which was the accident on Fukushima nuclear power plant. Estimates suggest that postdisaster reconstruction costs could be equivalent to 4% of GDP over several years. This raises the question of affordability, at a time when
Japan’s gross public debt stands at around 200% of annual GDP — far the highest such ratio in the developed world.
by
*More generally, unfavourable demographic trends, in combination with Japan'’ parlous fiscal position and persistent deflationary
s
pressures, suggest that the country will continue to lag behind its competitors economically, with real GDP growth averaging only 1.3% a
year in 2013-15.
Real GDP Growth (%) change from a year earlier
6
CPI Inflation (%) change from a year earlier
6
4,0
4
3,5
2
1,6
2,9
4
2,7
1,9
0,4
-0,6
-2
1,7
1,6
2
0
-3,9
0
0,3
-4
-1,3
-0,5
-0,7
-2
-6
-6,3
-8
2009
2010
2011 f
2012 f
-4
2009
Japan
OECD
Current Account Balance (% of GDP)
5
2010
2011 f
Japan
2012 f
OECD
Interest rates (%)
3
4
Short-term interest rate
2,8
3
2,4
3,6
Long-term interest rate
2
2,8
2
1
1
0
-1
-0,5
-0,7
-0,6
-0,8
-2
2009
2009
2010
Japan
2011 f
OECD
Fiscal balance (% of GDP)
2010
2011 f
2012 f
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Public debt (% GDP)
2012 f
208
0
200,0
194
2009
2010
212
2011 f
2012 f
200
-2
160,0
-4
-4,7
-6
-5,9
-7,0
-8
-8,9
-10,4
80,0
-7,2
-8,0
-10
120,0
40,0
-9,8
0,0
-12
Japan
OECD
Last update: September 2011
POLITICAL OUTLOOK
*Yoshihiko Noda, new Japan’s Prime Minister, is expected to continue many of the policies of his predecessor Naoto Kan. Like Kan, he has
expressed a willingness to review the August 2009 DPJ party manifesto in order to facilitate co-operation with the opposition Liberal
Democratic Party (LDP) and New Komeito party. Known as a fiscal hawk, he has said in the past that he favours increasing government
funds to pay for rising social security costs and massive public debt by doubling the 5% sales tax by the middle of the decade. He has
promised to work quickly to address the problem of the soaring yen, which has risen 46% against the dollar since the start of 2008. Recent
comments on nuclear power suggest that he may take a softer stance on this compared to Kan.
*Japan’s strategic relationship with the US remains a central pillar of its foreign policy. Its relationship with China, however, continues to
develop and is becoming more complex.The earthquake and the ensuing political stalemate in Japan may have the effect of distracting the
country from its pressing economic challenges and also from its efforts to maintain its strategic influence in Asia.
ENERGY OUTLOOK
Hydro
17%
Nuclear
17%
Oil
19%
Electricity matrix
(installed capacity)
in 2009
Electricity
(Source: Enerdata)
Capacity (2009)
278 GW
Wind &
Geothermic
1%
Production (2009)
Consumption (2009)
Natural gas
Coal
27%
Gas
19%
1046 TWh
948 TWh
(Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
1 TFC
120 BFC
3,542 BFC
* Japan has few domestic energy resources and is only 16% energy self-sufficient. Japan is the third largest oil consumer in the world
behind the United States and China and the third-largest net importer of crude oil. It is the world's largest importer of both LNG and coal. In
light of the country's lack of sufficient domestic hydrocarbon resources, Japanese energy companies have actively pursued participation in
upstream oil and natural gas projects overseas and provide engineering, construction, financial, and project management services for
energy projects around the world. Japan is one of the major exporters of energy-sector capital equipment and has a strong energy research
and development program.
* Japan did not meet the Kyoto protocol's objectives, as its greenhouse gas (GHG) emissions were 14% higher in 2008 than in 1990.
However, the government announced in 2008 its intention to reduce by 60% to 80% its GHG emissions by 2050. It intends to decrease its
emissions by 25% by 2020.
Electricity
* The electricity market was gradually liberalized in the 1990's and 2000's. A 1995 law opened the sector to independent producers. Since
2005, the electricity market is open to all industrial and commercial clients. A market regulator, the Electric Power System Council, was
created in 2003. In 2009, about 65% of electricity sales were realized in the free market.
* The electricity sector is dominated by 10 private vertically integrated regional companies (the "ten EPCOs"), which held before 1996 a
monopoly in production, transport and distribution on their areas. Since then, they have lost their monopoly. These 10 companies together
account for 3/4 of the electricity produced in Japan. TEPCO is the largest Japanese power utility, with an installed capacity of some 64
GW, and a yearly production of 280 TWh in 2009. TEPCO is amongst the largest power companies in the world; its output is in the range of
that of Italy.
* In 2010, Japan's total power installed capacity amounted to 278 GW, of which 50 GW were nuclear and 48 GW were hydropower.
However, after the Fukushima accident in March 2011, in mid June 2011, only 17 out of Japan's 50 remaining nuclear power reactors
(apart from Monju and written-off Fukushima Daiichi 1-4) were in operation. This represents 15.5 GW, or 35%, of the total remaining
nuclear generating capacity of 44.4 GW. 20 units, with a combined capacity of 17.7 GW (40% of total nuclear capacity) were not operating
as they had been shut for periodic inspections, while another two units (1.7 GW) had been shut for unplanned inspections or equipment
* The government set in 2002 an objective of 16 TWh of electricity production from renewables by 2014. It particularly supports the
development of photovoltaic & wind energies as well as the production of electricity from waste and biomass. Japan is the third country in
the world for photovoltaic, with a 2.1 GW installed capacity.
Gas
* The gas market has also been liberalized. The law imposed third party access to the networks of the 4 main companies (Tokyo Gas,
Osaka Gas, Toho Gas and Saibu Gas).
* There are around 230 gas companies in Japan, of which 70% are private. 3 of them share 80% of the gas market: Tokyo Gas, Osaka
Gas and Toho Gas. Inpex is responsible for gas projects' development, in particular LNG imports.
* Natural gas consumption in Japan increased rapidly until 2008, before a sharp decline in 2009 (-7%) due to the economic crisis.
* Japan is the biggest LNG importer in the world, representing 40% of the world LNG trade, with imports reaching 93 Gm³ in 2009. 90% of
Japan's LNG imports are based on long-term contracts. The main suppliers are Australia, Indonesia, Malaysia and Qatar. Japan has 28
importing LNG terminals in operation, with a total import capacity of around 260 Gm³ of natural gas. The country also has some 15 Mm³
storage capacity for LNG (equivalent to 9 Gm³ of natural gas) held at the LNG regasification terminals. This overcapacity provides a high
degree of flexibility to respond to potential demand increases, or to effectively move gas around the country. LNG imports are expected to
increase in the coming years. An LNG terminal is being built in Ishikari and will start operations in 2012, and Tokyo Gas builds the world's
biggest LNG terminal in Ohgishima (250,000 m³ capacity).
* A gas pipeline is considered to supply Hokkaido island from Sakhalin island (Russia).
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
100
(Source: Unstat 2008)
Municipal waste collection (Mt)
Municipal waste landfilled
54,367
3.4%
Water: * Japan water sector is traditionally dominated by local governments. So far, approximately 789 multipurpose dams and 1,878
single-purpose dams for agricultural, domestic or industrial water supply have been constructed. The water resources management plan
(Water Plan 21) is based on 3 objectives: 1) establishment of a sustainable water use system; 2) conservation and improvement of the
water environment; and 3) fostering of water-related culture. Water Plan 21 identifies long-term water supply and demand prospects and
means of improving water use stability through water efficiency measures and effective use of existing infrastructure.
* The current government aims to increase its role in promoting Japanese business interests abroad in the water sector through the
establishment a public-private Council for Overseas Water infrastructure.
Waste: * 54 million tons of waste were generated in 2008, of which 78% is incinerated. The waste sector is mainly under the responsibility
of the municipalities. There were 1,374 incineration facilities in 2006, for a total capacity of 196,000 tons/day. The government promotes
waste recycling and intends to reduce waste generation to 50 million tons in 2012. The disastrous earthquake and Tsunami on March 11,
2011 has left innumerable disaster waste (about 25 million tons) such as debris and rubble of the smashed houses, buildings and other
concrete structures, and scrapped cars and ships. The waste management policies to deal with this disaster waste are mainly arranged by
city councils, prefectural authorities, and Ministry of the Environment in Japan.
Last update: September 2011
LAOS
POLITICAL BACKGROUND
Type of government: Single party socialist republic
Head of State: President Choummaly Sayasone
Elected in 2006, re-elected in 2011
Next poll in June 2016
Key Ministers: Minister of Energy and Mines: Soulivong Daravong
Minister of Natural resources & environment: Noulin Sinbandhit
Parliament: National Assembly with 132 members
Elected in 2011
Next poll in April 2016
COUNTRY RISK
Standard & Poor's
N/A
Moody's
N/A
COFACE
Country vs. World Median
N/A
The political and economic risks are very
high and business environment can have
a very significant impact on corporate
payment behaviour. Corporate default
probability is very high.
Low, medium in Vientiane and Xieng
Khouang Provinces
D
SECURITY RISK
B
Control Risks 2010
N/A
L/M
(Five-year risk aggregates)
45
40
35
30
25
20
15
10
5
0
Overall
Financial
Business
Laos
World Median
Political
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
6.2 Urban population
33.2%
Exchange rate (LAK/USD): 8,015 (09/2011)
Nominal GDP (Bn USD)
6.3 HDI ranking
122/169
* Laos's relative economic isolation proved beneficial during the 2008-09 global financial crisis, when the country’s economy continued to
grow fast. Economic expansion in general, and growth in merchandise exports in particular, will accelerate in 2011-12 in line with the global
recovery, high world agricultural and mineral prices and the development of several power projects. The main challenges for the authorities
will be to keep inflationary pressures in check while maintaining support for the economy, and to move ahead with reforms aimed at making
the business environment more conducive to private-sector activity. Foreign investment, predominantly from Asian countries and directed
into the resources sector, will increase in 2011-12.
* Economic growth will remain rapid in 2011-12, at an average annual rate of 8.3%. High global prices for minerals have created strong
foreign interest in Laos’extractive sector, and the leading mining companies operating in the country are looking to maximise their profits by
increasing production. Such is the level of interest in the mining sector that parliament has put pressure on the government to slow the rate
at which it is approving new concessions, as the legislature lacks the capacity to monitor them all properly.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
10
8
9
8,4
7,0
6,0
6
8
8,4
7,5
4,6
5
7,2
5,6
4
7
6,8
6
5
6,8
7
8,3
4,4
3
6,8
2
5,6
1
0
4
2009
2010
2011 f
2012 f
Asia-Pacific Excluding Japan
Laos
-1
2,1
0,0
2009
2010
Laos
Current Account Balance (% of GDP)
2011 f
2012 f
Asia-Pacific Excluding Japan
Interest rates (%)
4
10
3,5
3,2
2
0
2,9
2,8
Short-term interest rate
8
0,2
6
-0,2
-1,3
-2
4
-3,8
-4
-6
2009
2010
Laos
2009
2011 f
Asia-Pacific Excluding Japan
Fiscal balance (% of GDP)
2010
2011 f
1
2012 f
2
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
102,2
2012 f
100,0
89,9
90,0
77,1
80,0
71,9
70,0
60,0
50,0
0
2009
Laos
Asia-Pacific Excluding Japan
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Laos has been a one-party state since 1975, with the ruling Lao People's Revolutionary Party (LPRP) maintaining a tight hold on the
political process. Elections were last held in 2011, with the LPRP gaining 128 out of 132 seats in the newly expanded parliament. Of equal
importance to the ruling party was the fact that the polling proceeded peacefully and without widespread demonstrations. The election of
four nonparty legislators, compared with two in the previous government, points to a desire on the part of the electorate for greater political
plurality.Given the one-party political structure, the LPRP's continuing rule is guaranteed. The growth of an urban middle class and the
awareness among provincial party members of an increasing gap between rural and urban incomes could put the LPRP under pressure
during the current parliamentary term, as well as the government’s unpopular practice of leasing land to foreign companies.
* Despite continued ethnic tensions, there have been no recent reports of attacks by ethnic-Hmong rebels or other insurgents on
government or civilian targets. The government will continue to face allegations of human-rights abuses until the Hmong issue is resolved.
ENERGY OUTLOOK
Hydro
90%
Wind &
Geothermic
9%
Electricity
(Source: Enerdata)
Capacity (2010)
Oil
1%
Production (2008)
Consumption (2009)
Electricity matrix
(installed capacity)
in 2010
Natural gas (Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
2 GW
3.4 TWh
1.9 TWh
0 Gm³
0 Gm³
0 Mtep
* The Ministry of Energy and Mines supervises the energy sector and defines the country's energy policy.
* Laos' main economic and energy resources are hydroelectricity and forest. In 2009, biomass covered 59% of the country's energy needs,
against 13% for coal, 19% for oil and 9% for wind and hydroelectricity. Deforestation is strong (forests covered 70% of the territory in 1940,
against 47% currently).
Electricity
* Electricité du Laos (EDL) is the state-owned company responsible for electricity production, transport, distribution and exports. The
creation of an independent transport company is planned. 2 independent producers are present in the country: Theun Hinbun Power
Company (THPC) and Houay Ho Power Company.
* A 1997 law allows the delivery of licenses to independent producers (IPPs) through BOT contracts, with a public participation.
* Laos' hydroelectricity potential is estimated at 18,000 MW.
* Viet Lao Power JSC (Vietnamese Company) began early 2011 construction work of a 332 MW power project in Laos, which, once
completed, will export electricity to Vietnam. This project is part of a deal between the two countries to jointly develop 5 GW of hydropower.
* Installed electricity capacity amounted to 930 MW in 2009, coming nearly only from hydroelectricity. The total capacity increased to 2 GW
in May 2010, with the commissioning of the Nam Theun 2 dam (1.07 GW).
* Two extra power plants are to be opened each year until 2020, as various projects will be completed.
* Electricity consumption is rapidly increasing (+11%/year since 2000), and is expected to rise even further in the coming years (+13%/year
between 2006 and 2020) to reach 7.8 TWh in 2020. Electrification rate rises strongly: the electricity network serves about 60% of
population in 2008 (against 50% in 2005 and 36% in 2000). The electricity network extension and the reduction of power losses are
priorities for the government. The official objective is to reach 79% of the population having access to electricity in 2015 and more than
90% after 2020.
* Laos exports about 95% of its electricity production to Thailand. Thailand and Laos signed the first electricity supply agreement in 1993. It
was extended several times, and in 2006, the two countries agreed on the supply of 5,000 MW from 2009. Laos also signed a
memorandum of understanding with Vietnam to export 1,000 MW between 2006 and 2010, and 2,000 MW after 2010. In 2020, the total
exported volume should exceed 13,500 MW (7,000 MW to Thailand, 5,000 MW to Vietnam and 1,500 MW to Cambodia). 5 interconnection
projects are under development for electricity exports, and 7 for electricity imports.
* The government's policy consists in rapidly developing its hydroelectricity resources to increase its exports to Thailand and Vietnam.
Electricity exports account for about a quarter of the country's total exports. Private capital is largely mobilized for new hydro projects,
through BOT contracts or joint ventures (JVs). Five main hydro projects are under construction for a total of 1,400 MW, most of them being
developed by IPPs through BOT contracts. Other projects are under development, after the signing of contracts, for a total of 1,900 MW.
Feasibility studies are led for other dam projects. Moreover, the government approved in 2008 the construction of a 1,800 MW lignite-fired
power plant (developed by a Ban Pu - Ratchaburi - LHSE consortium).
Gas
NONE
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
57
53
(Source: Unstat 2008)
Municipal waste collection (mt)
Municipal waste landfilled
N/A
N/A
Water: * Laos has considerable water resources: the country's annual supply of renewable fresh water is 270 billion m³, or about 600,000
m³ per person, while current demand is only 259 m³ per person. In 2008, access to safe water supply in urban areas was about 72%
against 51% in rural areas. There are problems related to waste and polluted water in major urban areas. Investment needs in the urban
water sector for 2005–2020 were estimated at 267 million USD.
* The responsibility of the urban water sector is born by the Ministry of Public Works and Transport, whereas rural areas are under the
scope of the Ministry of Public Health.
* The government targets to provide 24-hour access to safe drinking water for 80% of the urban population by 2020. To achieve this goal,
the government has progressively developed water supplies in Vientiane and the provincial centers, and, since 1999, has given increasing
focus to development of piped water supplies in the small district towns.
* The 1999 policy statement and the 2005 Enterprise Law provide the legal and regulatory framework for the water supply utilities (PNPs).
The 1999 policy statement delegated responsibility for urban water supply and sanitation to the provincial governments, established the
Water Supply Authority (WASA) and established PNPs to manage the urban water supply services in each province. The WASA is
responsible for making sure that the water supply companies give their customers a good quality, efficient service at a fair price.
* The 2009 water supply law aims to consolidate the water supply legislation and strengthen the legal basis for the provision of sanitation
services. The government intends to enable greater private sector participation, and is willing to develop public–private partnerships.
* The Lao water supply policy is now fully integrated within the regional context. Laos is embarked within the Sanitation and Water
Partnership for the Mekong programme, supported by the World Bank, which facilitates cross-learning and sharing of experience.
Waste: * Only 48% of Vientiane's waste is collected and disposed, as opposed to 47% in other major cities. The waste sector is under the
responsibility of the Ministry of Public Works and Transport. The legal framework is still inadequate, and institutional responsibilities are
unclear. A considerable amount of waste is illegally dumped into the drainage channels and rivers.
* The government's policy on solid waste management aims at waste reduction at source and recycling, developing public campaigns and
awareness, strengthening the legal framework and encouraging private sector participation.
Last update: September 2011
MALAYSIA
POLITICAL BACKGROUND
Type of government: Federated constitutional monarchy
Head of State: King of Malaysia Mizan Zainal Abidin, Sultan of the state of Terengganu
Enthroned in April 2007
Next election in November 2011
Key Ministers: Prime minister & finance minister: Najib Razak (since 2009)
Minister of Energy, Green Technology & Water: Peter Chin Fah Kui
Parliament: The Senate (Dewan Negara, the upper house) with 70 seats - The House of Representatives (Dewan Rakyat,
the lower house) with 222 seats
Elected in: March 2008
Next poll: April 2013
COUNTRY RISK
Strong capacity to meet financial
commitments
Standard & Poor's
A-
Moody's
A3/STA
Upper-medium-grade, low credit risk
SECURITY RISK
B
Control Risks 2010
30
The political and economic situation is
good. Business climate nonetheless
leaves room for improvement. Corporate
default probability is low on average.
A2
COFACE
Country vs. World Median
(Five-year risk aggregates)
35
20
15
10
5
0
Low, medium in Gaya, Ligitan island
groups (East Malaysia), Johor Bahru
L/M
25
Overall
Financial
Malaysia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
28.4 Urban population
72.2%
Exchange rate (MYR/USD): 2.99 (09/2011)
Nominal GDP (Bn USD)
237.8 HDI ranking
57/169
*The Malaysian economy is expected to move on to a more stable growth path in 2011-15, with the real GDP growth expected to
average 5.2% a year. This will follow a period of instability: the economy contracted by 1.6% in 2009 during the global recession, before
rebounding to growth of 7.2% in 2010. Private consumption and investment will remain the primary drivers of Malaysian economic
growth. Owing to higher global prices for crude oil and non-oil commodities, consumer price inflation will accelerate to an average rate of
3.2% in 2011, from 1.7% in 2010.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
10
7
8
6,8
8,4
6
7,2
3
3,2
-1,6
0
4,4
4
4,0
2
-2
5,6
4,6
5
6,8
4,0
5,6
4
6
2,9
2
2009
2010
2011 f
2012 f
-4
2,1
0,6
1
1,7
0
Malaysia
2009
Asia-Pacific Excluding Japan
2010
Malaysia
Current Account Balance (% of GDP)
2011 f
2012 f
Asia-Pacific Excluding Japan
Interest rates (%)
6
20
16,5
5
15
12,0
9,5
2,9
4
9,2
2,8
10
3
3,5
5
3,2
2
2009
2010
2011 f
Malaysia
2009
2012 f
Asia-Pacific Excluding Japan
Fiscal balance (% of GDP)
2010
2011 f
Long-term interest rate
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
0
100,0
90,0
-1
-2
-1,4
-1,8
-2,0
66,4
73,4
70,9
68,2
2010
2011 f
2012 f
60,0
-2,7
-4
80,0
70,0
-3
50,0
-5
-4,7
-6
-4,2
40,0
30,0
-5,6
20,0
-7
-8
Short-term interest rate
1
0
-7,0
10,0
Malaysia
Asia-Pacific Excluding Japan
2009
Last update: September 2011
POLITICAL OUTLOOK
* The opposition’s gains in the 2008 general election have changed the country's political landscape, ending half a century of semiauthoritarian rule by the Barisan Nasional (BN) coalition. The election was widely-considered a vote of "no confidence" for the BN, with
former Prime Minister Abdullah Ahmad Badawi significantly weakened within his own party. Abdullah resigned in April 2009, leaving his
deputy Najib Razak to the premiership of the country.
* Potential conflict between the country's three main ethnic groups remains the most important security concern for Malaysia. The
Malaysian government's long-term efforts to maintain peaceful relations between the groups are being undermined, as demonstrated by
unprecedented religiously motivated attacks that took place in early 2010. Segments of the ruling United Malays National Organisation
(UMNO) have increasingly embraced a more conservative branch of Islam and adopted anti-Chinese and anti-Indian rhetoric.
* Malaysia, co-founder of the ASEAN organization, plays a leading role in the organisation. The country also sees itself as a leading
nation in the Islamic and developing worlds, and is an active member of the Organisation of Islamic Conference and the Non-Aligned
Movement.
ENERGY OUTLOOK
8%
Electricity
(Source: Enerdata)
Capacity (2010)
25,4 GW
Hydro
Oil
36%
28%
Production (2010)
Consumption (2010)
Coal
Gas
Natural gas
98 TWh
93,2 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
28%
83 TCF
2,069 BCF
1,027 BCF
* The Ministry for Energy, Green Technologies and Water implements is responsible for the energy policy. The electricity and gas sector
is regulated since 2001 by an independent authority, the Energy Commission, which delivers the operating licenses.
* Malaysia's oil reserves are estimated at about 500 Mt (10 years of production). Total oil production amounted 33.4 Mt in 2009. There
are six refineries in the country, for a total capacity of 515,000 b/d. The oil sector is dominated by Petronas (public company created in
1974), which has exclusive property rights over the country's hydrocarbon resources. Nearly all of Malaysia's oil comes from offshore
fields. The continental shelf is divided into 3 producing basins: the Malay basin in the west and the Sarawak and Sabah basins in the
east. Most of the country’s oil reserves are located in the Malay basin and tend to be of high quality. Malaysia’s benchmark crude oil,
Tapis Blend, is very light and sweet with an API gravity of 44° and sulfur content of 0.08 % by weight.
Electricity
* Malaysia began the liberalization of its electricity sector in 1990 with the "Electricity Act" which opened electricity production to
independent producers (IPPs). IPPs have been assigned 21-year production licenses to supply the 3 national companies with electricity,
through Power Purchasing Agreements (PPAs) (most of them signed in 1993).
* 3 national electricity companies cover 3 geographical areas: TNB covers the peninsula region, Syarikat SESCO Berhad supplies
electricity to the Sarawak region, and SESB covers the Sabah region. Syarikat SESCO Berhad has been fully privatized in 2005, as well
as SESB in 1998. The main IPP is Malakoff Corporation Berhad (5,020 MW capacity).
* Electricity consumption is strongly rising. 93% of the population has access to electricity (99% in the peninsula, 80% in the other
States).
* The New Energy Policy of the Tenth Plan (2011-2015) identifies the following approaches: rationalising energy pricing gradually to
match market price; diversifying energy resources, including renewable energy resources (nuclear energy is also considered as an
alternative source of energy); improving energy efficiency and improving governance to support the transition to market pricing.
* The Malaysian government intends to develop renewable energies. It adopted in 2011 a programme to develop renewable energies
(Small Renewable Energy Programme, SREP) with an objective to increase their share in electricity production to more than 5%. In
order to reach this objective, the government proposed a series of measures to encourage the use of renewables (tax cuts, customs
duty reduction...). In April 2011 the Parliament approved the "Renewable Energy Act" that fixes feed-in tariffs for biomass, solar and
micro-hydro. The country has a strong potential in hydroelectricity which is underexploited.
* A first 675-km undersea cable will ling Sarawak and Mersing by 2016, allowing to deliver about 1,700 MW of electricity to the
peninsula.
Gas
* Malaysia's gas reserves are evaluated at 2,500 Gm³, which represents about 50 years of production. Gas production is rapidly
increasing, and reached 59.6 Gm³ in 2009 (20 Gm³ in 1990).
* Petronas is the main actor in gas production (combined capacity of about 23 Mt per year; 70% of the country's gas production) and in
LNG.
* 45% of the gas produced in Malaysia is exported , mainly in the form of LNG (85%). LNG exports are made from Bintulu liquefaction
terminal (23 million tons/year capacity). Malaysia was the second largest exporter of LNG in the world after Qatar in 2009, exporting
over 1 Tcf of LNG, which accounted for 12 % of total world LNG exports. Japan, South Korea, and Taiwan were the 3 primary
purchasers. LNG is primarily transported by Malaysia International Shipping Corporation (MISC), which owns and operates 27 LNG
tankers, the single largest LNG tanker fleet in the world by volume of LNG carried. MISC is 62% owned by Petronas.
* ASEAN is promoting the development of a trans-ASEAN gas pipeline system (TACP) aimed at linking 80 percent of ASEAN's major
gas production and consumption centers. Because of Malaysia’s extensive natural gas infrastructure and its location, the country is a
natural candidate to serve as a hub in the ongoing TACP project.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
96
(Source: Unstat 2008)
Municipal waste collection (mt)
Municipal waste landfilled
N/A
N/A
Water: * In view of increasing demand and financing problems met by the water sector, the government has engaged since 2007
restructuration of the sector in an attempt to improve the service of the country's water utilities. Malaysia has opted to centralise its
water sector, and opened up more areas of the water sector to private investment. Moreover, the government decided to invest 22
billion euros in the water sector between 2000 and 2050.
Waste: * Malaysia produces more than 23,000 tonnes of solid waste each day and this figure is estimated to increase dramatically to
more than 30,000 tonnes by 2020. Less than 5% of waste is recycled and original plans to increase this to 22% by 2020 have been
accelerated under the new 10th Malaysia Plan to 40% by 2015. There are currently 170 landfills in Malaysia.
* The 2007 Solid Waste and Public Cleansing Management Act is a major breakthrough to reorganise the sector, backed by a 2.6 billion
USD budget. It adopted 22-year concessions through privatising the waste collection companies, giving them long-term visibility and
encouraging them to proceed to strong investments. Since then, solid waste management responsibility was transferred to a federal
authority, the National Solid Waste Management Departement, which is also in charge of operation licenses delivery.
Last update: September 2011
PAKISTAN
POLITICAL BACKGROUND
Type of government: Federal Constitutional Republic
Head of State: Asif Ali Zardari
Elected in 2008
Next poll in 2013
Key Ministers: Prime Minister: Yusuf Raza Gilani
Minister of Petroleum and Natural Resources: Asim Hussain
Minister of Environment: Hameed Ullah Jan Afridi
Minister For Water & Power: Syed Naveed Qamar
Parliament: National Assembly with 342 seats - Senate with 100 seats
Elected in 2008
Next poll in 2013
COUNTRY RISK
More vulnerable to adverse business,
financial and economic conditions but
currently has the capacity to meet financial
commitments.
B-
Standard & Poor's
Speculative grade, high credit risk
B3/STA
Moody's
The political and economic risks are very
high and business environment can have a
very significant impact on corporate
payment behaviour. Corporate default
probability is very high.
COFACE
D
SECURITY RISK
B
Control Risks 2010
H/E
Country vs. World Median
(Five-year risk aggregates)
50
45
40
35
30
25
20
15
10
5
0
High, extreme in Federally Administered
Tribal Areas (FATA)
Overall
Financial
Pakistan
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
173.6 Urban population
37%
Exchange rate (PKR/USD): 87.45 (09/2011)
Nominal GDP (Bn USD)
171.8 HDI ranking
125/169
* Difficult economic environment and challenging security situation. Industrial production growth—one of the major drivers of Pakistan’s
economy—remains subdued amid continued declines in investment levels and severe infrastructure shortages. The agricultural sector,
which accounts for nearly 21% of GDP and employs over 45% of the population, also remains undermined, still suffering from the losses of
the 2010 summer floods and declining productivity. The consumption side of the economy has a slightly better outlook, largely underpinned
by strong public consumption. Nevertheless, persistent inflation and heavy government reliance on domestic financing of its perennial fiscal
deficit will continue undermining private-sector credit and contributing to a further erosion of purchasing power.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
9
20
8
8,4
6,8
6,8
7
15
5,6
6
5
4,1
3,9
12,5
2,4
3,6
11,5
10
4
3
13,9
13,6
4,6
2
5,6
4,4
5
2,1
1
0
0
2009
2010
2011 f
2012 f
Asia-Pacific Excluding Japan
Pakistan
2009
2010
Pakistan
2011 f
2012 f
Asia-Pacific Excluding Japan
Interest rates (%)
Current Account Balance (% of GDP)
15
5
14
3
3,5
3,2
2,9
2,8
2009
2010
2011 f
2012 f
-2,6
-0,9
-0,5
13
1
12
-1
Short-term interest rate
11
-3
Long-term interest rate
-2,2
10
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
-5
Pakistan
Asia-Pacific Excluding Japan
Fiscal balance (% of GDP)
2009
2010
2011 f
External debt (% GDP)
2012 f
0
40,0
37,8
-1
33,3
-2
-3
30,7
-1,4
-1,8
-2,0
31,2
2011 f
2012 f
30,0
-2,7
-4
-5
-6
20,0
-5,1
-5,3
-6,3
-7
-6,0
10,0
-8
Pakistan
Asia-Pacific Excluding Japan
2009
2010
Last update: September 2011
POLITICAL OUTLOOK
* Fears over government collapse in Pakistan were temporarily averted with the return of the Muttahida Qaumi Movement (MQM) to the
ruling coalition and the accession to the alliance of the Pakistan Muslim League-Quaid (PML-Q). The MQM again quit the coalition in July
2011. One reason for the party's turbulent relationship with its partners was the inter-party violence wracking Karachi, Pakistan's largest city,
where the differing ethnic groups associated with the various parties are involved in widespread violence with each other. The PML-Q's
assistance means the coalition government under the Pakistan Peoples Party (PPP) now enjoys a more comfortable majority, but these
events showed that the political parties are growing increasingly assertive over the government, which has to make ever-greater
concessions to stay in power. The opposition Pakistan Muslim League–Nawaz (PML-N), in particular, can be expected to increase its
pressure as the government has failed to adhere to the implementation of its list of 10 demands, which among others included greater
efforts against government corruption and a reduction of government expenses by 30%.
* The international community has in the past expressed concerns over the sustainability of the Pakistani government's wavering policy
towards militants, which has permitted militants to consolidate their position and escalate attacks in neighbouring Afghanistan.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
Oil
25%
Coal
4%
Nuclear
2%
Gas 35%
Electricity matrix
(installed capacity)
in 2009
Hydro
34%
Production (2009)
Consumption (2009)
Natural gas
20 GW
92.2 TWh
70.8 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
31,0 TCF
1,356 BCF
1,356 BCF
* Pakistan's energy policy follows two main axes. First, it aims to promote exploration and exploitation of local oil and gas resources, by
encouraging private investment to decrease the country's energy dependence. Second, it aims to deregulate, liberalize and privatize the
energy sector. 2 independent regulatory authorities have been created to supervise the deregulation and privatization of the energy sectors:
NEPRA for electricity, and OGRA for oil and gas.
Electricity
* Pakistan's total electricity installed capacity was 20 GW in 2009. The country's energy requirement is increasing rapidly every year. The
primary energy consumption in Pakistan grew by almost 80% in the past 15 years from 34 Mtoe in 1994-95 to 61 Mtoe in 2009-10. Electricity
demand is expected to rise 8%/year by 2025: the country will thus need to nearly quadruple its installed capacity by 2025, up to 74 GW, to
meet the growing demand.
* Wapda (Water and Power Development Authority) is the country's most important power company, with an installed capacity of 11.5GW.
KESC (Karachi Electricity Supply Corporation) , 2.4 GW, which supplies power to the Karachi area, was privatized in 2005. The government
has openened the electricity sector to independent producers (IPPs) in the late 1990's, in order to face the electricity shortage.
* There are 3 nuclear power plants in Pakistan, operated by the Pakistan Atomic Energy Commission (PAEC): Kanupp nuclear plant (137
MW), operational since 1971, Chasnupp plant (350 MW) since 2000 and Chashma plant (330 MW) commissioned in 2011. In August 2011 it
was reported that Pakistan aimed for 8 GW nuclear at ten sites by 2030. PAEC has apparently selected six new sites on the basis of the
Pakistan Nuclear Regulatory Authority (PNRA) and the International Atomic Energy Agency (IAEA) advice.
* The Pakistani government encourages the development of renewable energies with an objective of 10% of renewables in power production
by 2015.
* Due to rising demand and failing power infrastructure, Pakistan faces a severe power shortage problem, with recurrent blackouts
hampering the economic activity, particularly the industrial sector, and leading to serious street protests. The power deficit amounts to 5
GW, which has led to a number of major power outages in recent years. Most major cities in Pakistan experience daily power outages while
rural areas can spend up to 18 hours a day without power.To face this problem, a national energy policy was announced in April 2010,
containing many measures to decrease energy consumption : neon signs and decorative lights' ban, extension of the official weekend to two
days, power cut of 50% in government offices, obligation for commercial centers (except drug stores) to close at 8 pm, reduction of power
supply to Karachi to 300 MW, restriction to marriage halls opening hours... However, the implementation of these measures is difficult as
many people do not respect bans and restrictions, and the authorities are not willing to use force to make the decisions respected.
* To help Pakistan face its power shortages, the Asian Development Bank will spend 40 million USD to promote energy-saving light bulbs:
30 million of these bulbs will be distributed free to residents, helping to reduce power demand by 1,100 MW.
Gas
* Pakistan had 31.3 trillion cubic feet of natural gas proven reserves in 2009, while it produced 1356 billion cubic feet of natural gas. PPL, a
public company, is Pakistan's first gas producer, with an annual production of about 10 Gm³. Gas' share in the country's final consumption
rapidly increased, from 16% in 1990 to 26% in 2009.
* Pakistan's natural gas deficit is estimated at about 1 Gm³/year. In order to lower the country's energy dependence and to satisfy to
increase demand, the government plans to gradually substitute oil imports with locally produced or imported gas. Gas demand is to increase
6%/year by 2015, while gas reserves are expected to deplete significantly.
* Pakistan considers to import 22.7 Gm³ of gas from Iran, half for domestic consumption and half for transit, and 33 Gm³ from Turkmenistan,
shared with India.
* Several pipeline projects are currently under consideration: the TAPI pipeline (Turkmenistan - Afghanistan - Pakistan - India), the IPI
pipeline (Iran - Pakistan - India) which should be operational in 2013, and a 1,830-km gas pipeline between Qatar and Pakistan.
ENVIRONMENT OUTLOOK
Water (WHO 2008)
Waste
(Source: Unstat 2007)
Access to drinking water (%)
90
Municipal waste collection (mt)
N/A
Access to sanitation (%)
45
Municipal waste landfilled
N/A
Water: * Drinking water and sanitation policy is the constitutional responsibility of provincial governments. However, the Federal government
is involved in policy development and guidelines setting, mostly through the Ministry of Environment. In September 2009 the government
approved the National Drinking Water Policy, aiming at providing safe drinking water to the entire population at an affordable cost by 2025.
The strategy highlights the responsibility of local governments in providing drinking water.
* The Asian Development Bank (ADB) approved in 2008 a 300 million USD loan for the Sindh Cities Improvement Investment Program,
which aims at improving water supply, wastewater, and solid waste management infrastructure in more than 20 cities in Sindh Province.The
ADB also financed the Punjab Community Water Supply and Sanitation Sector Project with 50 million USD.
Waste: * The solid waste management disposal in Pakistan is one of the least developed in the world. Local municipal corporations are
responsible for waste collection in all the country except Karachi. While Pakistan’s population has increased to more than 160 million, lack of
adequate infrastructure is creating environmental hazards. About 55,000 tons of solid waste are generated daily in urban areas and about 3050% of it is not collected.
Last update: September 2011
THE PHILIPPINES
POLITICAL BACKGROUND
Type of government: Constitutional Republic
Head of State: Benigno Aquino
Elected in : June 2010
Vice-President: Jejomar Binay
Next poll in 2016
Key Ministers: Energy Secretary: Jose Rene d'Almendras
Environment Secretary: Ramon Paje
Parliament: Senate (the upper house, with 24 seats - House of Representatives (the lower house, with 288 seats)
Elected in May 2010
Next poll in May 2013
COUNTRY RISK
Less vulnerable in the near-term but
faces major ongoing uncertainties
Speculative elements, substantial credit
risk
BB
Standard & Poor's
Ba2/STA
Moody's
Political and economic contexts as well as
business environment may prove to be
difficult and affect payment behaviour.
Average default probability is low.
B
COFACE
SECURITY RISK
Control Risks 2010
B
Medium, hign in areas of insurgency,
especially Mindanao and the Sulu
Archipelago
M/H
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Financial
Philippines
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
93.2 Urban population
66.4%
Exchange rate (PHP/USD): 42.47 (09/2011)
Nominal GDP (Bn USD)
199.6 HDI ranking
97/169
* The economy expanded by 7.6% in 2010, recording its fastest pace of growth since the mid-1970s, as demand rebounded following the
2009 global recession. However, the rate of expansion slowed in the first quarter of this year, to 4.9% year on year. A sharp rise in
international oil prices and global economic weakness will depress growth in the Philippines. Philippine GDP growth would average 5.3%
a year in 2012-15. Private consumption will be supported by a fall in unemployment and increased spending by the government on
conditional cash transfers.
*Without improvements in the business environment the country will not attract the levels of foreign direct investment that, given the low
national saving rate, are needed to raise overall investment significantly.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
8
10
9
8,4
8
7
6
4,7
4,6
6
4,6
5
4
6,8
6,8
7,6
4,4
5,6
4
5,6
4,3
3,8
5,0
3,2
3
2
1,1
2
2,1
1
0
0
2009
2010
Philippines
5,2
4
2010
Philippines
8
4,2
Short-term interest rate
6
3,5
2011 f
2012 f
Asia-Pacific Excluding Japan
Interest rates (%)
Current Account Balance (% of GDP)
6
2009
2011 f
2012 f
Asia-Pacific Excluding Japan
3,9
2,9
3,2
2,8
4
2
2,0
Philippines
2
Asia-Pacific Excluding Japan
0
0
2009
2010
2011 f
2012 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
External debt (% GDP)
2012 f
0
70,0
-1,4
-2
65,5
64
2009
2010
2011 f
61,4
-2,0
-2,7
-2,8
-3,7
50,0
40,0
-1,8
-3
-4
62,9
60,0
-1
30,0
-2,8
20,0
10,0
-3,4
0,0
Philippines
Asia-Pacific Excluding Japan
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The opposition Liberal Party (LP) candidate, Senator Benigno Aquino III, won the May 2010 general election with a landslide majority,
receiving an impressive 42.08% of the valid votes cast. This has given the new president a decisive mandate to implement much-needed
economic, social, and political reforms. Following in the footsteps of his well-loved mother and the country's late-president, Corazon
Aquino, President Benigno Aquino has pledged to fight corruption, restore the credibility of the judiciary and congress, and upgrade
infrastructure during his six years in office. He also needs to address the Philippines' widespread poverty problem by maintaining
sustainable economic growth, lowering the population growth rate, and tackling weaknesses in the investment environment. While a
decisive mandate has boded well for political stability and has enhanced investor confidence, serious concerns remain that the
administration's reform programme will continue to be limited and hindered by the weak political system and Aquino's lack of proven
leadership skills.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
16.8 GW
Hydro
22%
Coal
25%
Production (2009)
Consumption (2009)
Wind and
geothermal
12%
Electricity matrix
(Installed Capacity
in 2009)
Gas
16%
Oil
25%
Natural gas
61.9 TWh
50.9 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
3 TCF
111 BCF
111 BCF
Electricity
* The Philippines' total installed capacity in 2009 was 16.8 GW, while production totalled 62 TWh. The country's electricity demand is
projected to growth at an average rate of 2.8% per annum until 2015 and then 3.7% between 2015 and 2030. To meet this demand,
installed capacity is expected to expand to more than 34 GW by 2030.
* The country is the second largest world producer of geothermal power, with estimated potential reserves of 4,800 MW. As of 2009, the
Philippines' geothermal installed capacity was 2 GW, mostly located in the central island of Visayas, and accounted for 17% of the
country's electricity production. The Philippines aims to be the world leader in geothermal energy and intends to commission 700 MW of
new capacity until 2014.
* The Philippine National Power Corporation (NPC), which was an integrated state-owned monopoly, is currently being privatised to
facilitate competition in the power sector. Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA), limits the ownership of
generation assets by a single owner to only 30% of the generating capacity within a single grid. The National Transmission Corporation,
the state-owned company established to assume the transmission functions of the NPC, turned over its functions to the private National
Grid Corporation of Philippines in January 2009. The country has also started the operation of wholesale electricity spot market on the
island of Luzon.
* In April 2011, the government affirmed that the nuclear energy option would continue to be considered, with lessons from a disaster in
Japan to be incorporated into any policy decision. The Philippines completed the construction of Bataan-1, a 620 MW pressurised water
reactor in 1984, but it has never operated due to safety concerns linked to its proximity to a major earthquake fault line. In 2010, NPC and
Korea Electric Power Corp undertook a joint feasibility study to explore the possibility of restarting the Bataan nuclear power plant.
However, in June 2011, it was decided to transform the plant into a tourist site.
* In June 2011, the government launched the National Renewable Energy Program (NREP) in an attempt to achieve grid parity with
conventional energy sources with 15 GW of renewable energy capacity till 2030.
Gas
* As of 2009, the Philippines held an estimated 3 TCF of natural gas reserves. Philippine's natural gas production took off considerably in
2001 with the launch of the Malampaya gas field (estimated 2.3 to 4.4 TCF of gas reserves).
* The government is currently offering contracts to explore and develop 15 highly prospective oil and gas blocks, covering a total area of
more than 10 million hectares in Northwest Palawan, East Palawan and Sulu Sea basins. Northwest Palawan is home to the Malampaya
deep water gas-to-power project in the Philippines, the country’s largest and most successful natural gas industrial project. About 100
global oil and gas exploration and service companies expressed keen interest in investing in the local upstream oil and gas industry,
during the government’s international road show for the Philippine Energy Contracting Round (PECR 4) held in Singapore in June 2011.
* Thailand’s PTT Public Company Ltd, formerly the state-owned Petroleum Authority of Thailand, is undertaking a feasibility study for a
$700 million pipeline project in the Philippines. The new pipeline would be built to pump gas from an offshore field to Manila. The project
would be designed to move gas from a port base at Batangas south of Manila where it is already being piped ashore from the Malampaya
gas field off the southwestern island of Palawan.
* The Land Transportation & Franchising Regulatory Board of the Philippines decided recently to promote the use of compressed natural
gas (CNG) in vehicles belonging to public transport, with a view towards 100% use of this alternative fuel by its fleet by 2010.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
91
76
(Source: Unstat 2009)
Municipal waste collected (Mt)
Municipal waste landfilled (Mt)
2,104
N/A
Water: * The water market is expected to grow fast in the coming years due to the demographic growth as well as the necessity to reduce
water pollution in the country. Moreover, disparities are huge in terms of water access and facilities from one region to another. The Clean
Water Act of 2004 has been adopted in this specific context. In July 2010, water supplies in the capital, Manila, have been disrupted by
low water levels at the Angat reservoir, underlining the need for new infrastructure investment.
* Current projects in the water field include: the search for new water sources for the Metropolitan Waterworks and Sewerage Systems
(MWSS), which depends from the Angat dam; projects from the private concessionaires Manila Water Company Inc. and Maynilad Water
Services Inc. (new facilities, distribution networks...); projects of wastewater treatment plants in the region of Laguna Bay.
Waste: * Only 12% of the waste produced in the country is recycled and re-used. Waste installations are seriously lacking in the country,
with only a few landfill sites and dumps (need for financial resources and technological capacities). To date, there are only 4 landfill sites:
Clark Ecozone in Tarlac, Bais in Negros Oriental, Puerto Princesa City in Palawan and Rodriguez Montalban in Rizal), but 215 sites have
been identified as potential landfill sites.
Last update: September 2011
SINGAPORE
POLITICAL BACKGROUND
Type of government: Parliamentary republic
Head of State: President Tan Keng Yam (known locally as Tony Tan)
Elected in: September 2011
Next poll: August 2017
Prime Minister: Lee Hsien Loong, since 2004 (People Action's Party - PAP)
Key Ministers: Minister of the Environment and Water Resources: Vivian Balakrishnan
Chairman of the Energy Market Authority: Chan Lai Fung
Parliament: Unicameral parliament with 99 elected members:
Next poll: 2016
Elected in: May 2011
COUNTRY RISK
Extremely strong capacity to meet
financial commitments. Highest Rating.
Standard & Poor's
AAA
Moody's
AAA/STA
Highest rating with minimal credit risk
Country vs. World Median
(Five-year risk aggregates)
35
30
25
The political and economic situation is
good. Business environment is favorable.
Corporate default probability is low.
A1
COFACE
20
15
10
5
SECURITY RISK
Control Risks 2010
B
0
L
Low
Overall
Financial
Singapore
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
5.26 Urban population
222.7 HDI ranking
100%
27/169
Exchange rate (SGD/USD): 1.21 (09/2011)
* Singapore has made free-trade agreements a cornerstone of its economic policy, realizing that they are the best means of protecting its
position as the region’s trade and investment hub. The economy has exhibited remarkable dynamism in its response to low-wage regional
competitors over the last decade by moving toward higher-quality production and into new sectors. This move up the value chain has
prevented Singapore from being driven out of its many manufacturing markets. Meanwhile, the ongoing liberalization of the financial sector
will make Singapore even more attractive to foreign investors, thereby ensuring a steady inflow of foreign funds. Singapore's prudent
economic policies, stable political system, highly skilled labor force, and well-established infrastructure all point to the continuation of
strong and steady growth.
Real GDP Growth (%) change from a year earlier
16
6
12
10
8,4
5,0
6,8
6,8
5,6
6
4,4
4
3,2
3
4,5
4
5,0
2
2
0
5,6
4,6
5
8
-2
CPI Inflation (%) change from a year earlier
7
14,5
14
2,8
2,1
1
-0,8
2009
2010
2011 f
Singapore
2012 f
0,6
0
2009
Asia-Pacific Excluding Japan
2010
Singapore
Current Account Balance (% of GDP)
25
Interest rates (%)
2
22,2
22,2
2011 f
2012 f
Asia-Pacific Excluding Japan
19,4
19,1
20
Short-term interest rate
1,5
15
10
1
3,5
5
3,2
2,9
2,8
0,5
0
2009
2010
2011 f
2012 f
-5
0
Singapore
2009
Asia-Pacific Excluding Japan
Fiscal balance (% of GDP)
2010
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
3
30,0
2
1,2
23,9
1,6
1,5
1
20,2
20,0
17,2
0
-1
-0,4
-2
-3
16
-1,8
-1,4
10,0
-2,0
-2,7
0,0
-4
Singapore
Asia-Pacific Excluding Japan
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* Singapore is marked by extreme political continuity, with the People's Action Party (PAP) holding power without interruption since 1959.
PAP won another huge parliamentary majority in the general election held in May, taking 81 out of 87 parliamentary seats. Throughout its
long period in government, the PAP has managed to deliver rising prosperity and promote social harmony through a paternalistic
approach, and its far-sighted policies have contributed to the building of a successful and relatively harmonious multicultural society that
enjoys a high standard of living, with good amenities, education, healthcare, housing and transport. However, the opposition parties
increased their share of the vote from 33% to almost 40%. This translated into just six parliamentary seats, in a reflection of Singapore’s
first-past-the-post system and its complex districting arrangement.
* The city-state has traditionally pursued a pro-Western economic and foreign policy, while simultaneously maintaining excellent relations
with China. Singapore will also continue to seek ways to encourage greater economic integration in Asia and Australasia and to promote
global free trade, thereby helping to reinforce its position as an important transport and financial hub. In this respect, Singapore will
continue to play an active role at the forefront of moves to improve co-operation and integration among the ten members of ASEAN.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
10.6 GW
Oil 29%
Production (2009)
Consumption (2009)
Gas
71%
Electricity matrix
(installed capacity)
in 2009
Natural gas
41.8 TWh
38 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
N/A TCF
0 BCF
341 BCF
* The energy sector is under the responsability of the Ministry of Trade and Industry, through the Energy Division (ED). The Energy Market
Authority (EMA) regulates the energy market.
* Singapore is a major oil hub in Asia despite the absence of resources in its territory. The country is the world's third largest trading place
for petroleum products.
Electricity
* The governement started liberalizing the electricity market in 2003. EMA is responsible for granting the production licences. Electricity
production is fully opened to competition as well as power distribution. Within this privatization process, Tuas Power was sold in March
2008 to the Chinese Group China Huaneng (2.1 billion euros), and Senoko Power was bought in September 2008 by Lion Power (1.8
billion euros), a consortium in which GDF SUEZ holds a 30% share. Finally, Power Seraya was sold in December 2008 to Malaysian
company YTL (1.9 billion euros).
* Singapore's total power installed capacity is 10.6 GW (2009). Even if the three main producers remain Senoko Power Ltd (2,635 MW
capacity), Power Seraya Ltd (2,440 MW) and Tuas Power Ltd (2,670 MW), several smaller producers have emerged progressively. Six
companies are present in power distribution, the largest one being Singapore Power Services (37% market share). The electricity network
is managed by Singapore Power Group.
In 2011, the National Research Foundation (NRF) allocated an additional S$195 million fund to promote research & development (R&D) in
Singapore's energy sector until 2015. The extra funding is meant to help the Energy Innovation Program Office (EIPO) accelerate the
growth of the country's clean energy industry, which targets S$1.7 billion of economic value-added and 7,000 skilled jobs by 2015.
Gas
* Singapore has no hydrocarbon resources. The country generates 80% of its electricity from natural gas. Singapore imports all its natural
gas from Malaysia (20%) and Indonesia (80%) via four offshore pipelines.
* Senoko Power renewed its supply contract with the Malaysian State-owned company Petronas, for a ten-year duration. Keppel
Corporation, which has a supply contract with Petronas lasting until 2023, disposes of a 500 MW power plant. In October 2010, Keppel
Energy started the 800 MW expansion of its plant, which is expected to be completed by 2013. The Indonesian state-owned company
Pertamina also transports gas to Singapore through the West Natura and Sumatra pipelines.
* SembGas and the Indonesian company Pertamina have signed an agreement to increase gas supplies from Sumatra (Indonesia) by 2.8
million m³/day. Keppel Energy and Petronas are currently building a 5 km gas pipeline between Malaysia and Singapore, with a capacity of
8.2 million m³/day.
* A project of LNG terminal was relaunched in 2009. EMA created Singapore LNG Corporation to build, own and operate the terminal on
Jurong Island. The new project has a capacity of 4 Gm³/year and should be operational in 2013.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
100
(Source: Ministry of Environment and Water Resources 2009)
Municipal waste collected (Mt)
Municipal waste landfilled (%)
6,114 (Including industrial waste from
manufacturing industries.)
2.4
Water: * The water resources of Singapore are especially precious given the small amount of land and territory in Singapore's geography
while having a large urban population in the city-state. Without natural freshwater lakes, Singapore relies on four water sources ("four
national taps"): rainfall, collected in reservoirs or water catchment areas (about 20% of supply in 2010); imported water from Malaysia
(about 40% of supply); reclaimed water (30% of supply), and seawater desalination (10% of supply).
* The country consumes about 700 million litres of fresh water per day. Per capita domestic water consumption amounts 154 litres per day
(2010). Singapore is only 50% self-sufficient in the water supply. To meet its water challenges, the government has invested in research &
technology during the last four decades and developed capabilities in total water management.
* The 4th National Tap, a programme launched by the Public Utilities Board (PUB) in 2005, aims to reduce reliance on foreign supply and
to diversify Singapore's water sources. In that framework, the country opened the same year its SingSpring Desalination Plant in Tuas.
The SingSpring desalination plant was PUB’s first public-private partnership (PPP) project. This plant can produce 30 million gallons of
water a day (114,000 cubic meters) and is one of the region’s largest seawater reverse-osmosis plants. A second desalination plant will
increase water supply by 70 million gallons a day (265,000 cubic meters) when completed in 2013.
Waste * Between 1970 and 2000, the quantity of solid waste in Singapore has been multiplied by 6. There are 4 incinerators in the
country, with a cumulated capacity of 8,200 tons. In 2010, according to the Ministry of Environment and Water Resources, 58% of waste
was recycled, 40% was incinerated and 2% was landfilled.
* The Government's objective is to reduce the current volume of waste, to extend the deadline to close the Semakau dump, and to recycle
60% of the produced waste by 2012.
Last update: September 2011
SOUTH KOREA
POLITICAL BACKGROUND
Type of government: Presidential
Head of State: Lee Myung-bak
Elected in: December 2007
Next poll: December 2012
Key Ministers: Minister of Knowledge Economy: Choi Jung-kyeong (in charge of the energy sector)
Minister of Environment: Yoo Young-sook
Parliament: Unicameral Kuk Hoe (National Assembly) with currently 299 members
Elected in: April 2008
Next poll: April 2012
COUNTRY RISK
Standard & Poor's
Moody's
A
A1
COFACE
A2
SECURITY RISK
Control Risks 2010
Strong capacity to meet financial commitments
Upper-medium-grade, low credit risk
The political and economic situation is good.
Business climate nonetheless leaves room for
improvement. Corporate default probability is low
on average.
The political and economic situation is good.
Business climate nonetheless leaves room for
improvement. Corporate default probability is low
on average.
B
L
Country vs. World Median
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Overall
Financial
South Korea
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
48.5 Urban population (2015 p)
83%
Exchange rate (KRW/USD): 1075 (09/2011)
Nominal GDP (Bn USD)
1007.6 HDI ranking
26/182
*Real GDP growth slowed to 0.8% in April-June, the economy is expected to grow by 3.7% in 2011 after a strong 6.2% growth rate in
2010. Consumer price inflation will remain under upward pressure during much of 2011, owing to a continued recovery in domestic
demand and sharply higher global oil and food prices. Inflation will nevertheless stay under control.
*The country's economy is heavily dependent on external trade, and the authorities will therefore implement policies (including modest
capital controls) that aim to prevent the won from rising too sharply in the international foreign-exchange market. A tax on non-deposit
foreign-currency liabilities at South Korean and foreign banks has been introduced. The measure is aimed at containing local banks'
exposure to foreign-currency liabilities. The Financial Services Commission (South Korea's main financial regulator) has reinstated a ban
on the short-selling of equities, in an attempt to damp down volatility in the South Korean stockmarket.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
9
6
8
8,4
6,8
6,8
7
4,6
6
5,6
4
6,2
5
3,9
4
3
4,4
2,8
2,0
3,0
3
2
3,7
2
1
5,6
4,1
5
2,1
1
0,3
0
0
2009
2010
South Korea
2011 f
2012 f
Asia-Pacific Excluding Japan
2009
2010
South Korea
Current Account Balance (% of GDP)
5
2011 f
2012 f
Asia-Pacific Excluding Japan
Interest rates (%)
6
3,9
4
5
3,2
3,5
4
3
2,9
2,8
2,7
2
3
1,4
1,9
2
1
Short-term interest rate
Long-term interest rate
1
0
2009
2010
South Korea
2011 f
2012 f
0
Asia-Pacific Excluding Japan
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
4
2011 f
3,1
3
2,4
2
1,1
1
0
-1
-2
-3
-1,8
-1,6
-1,4
-2,0
-2,7
-4
South Korea
Asia-Pacific Excluding Japan
Public debt (% GDP)
2012 f
100,0
90,0
80,0
70,0
60,0
50,0
40,0
30,0
20,0
10,0
0,0
32,5
33,9
33,3
33,4
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* A potential Grand National Party presidential nominee, Oh Se-hoon, the mayor of the capital Seoul, may no longer be in the running to
become the party's candidate owing to the failure of a referendum that he called in August. The move has left him unpopular with his
party, as it was an exercise that needlessly used up his political capital with voters.
* South Korea’ foreign relations will continue to focus on North Korea and the four powers that are most involved with the peninsula,
s
namely the US, China, Japan and Russia—the participants in the six-party talks (currently in abeyance) - that are aimed at persuading the
North to halt its nuclear programme.
ENERGY OUTLOOK
Hydro
7%
Installed capacity (2010)
Nuclear
22%
Electricity
(Source: Enerdata)
Capacity (2010)
82.1 GW
Production (2010)
Consumption (2010)
Coal 42%
Oil
9%
Natural gas
(Source: EIA)
Proven reserves (2010)
Production (2010)
Consumption (2010)
Gas
25%
487 TWh
458 TWh
N/A Gm3
19 BCF
1,508 BCF
Electricity
* South Korea's power installed capacity is 82.1 GW (end of 2010). Thermal capacity has been increased through the development of coaland gas-fired power plants.
* Prior to the restructuring of Korea’s electricity sector, the state-owned Korea Electric Power Corporation (KEPCO) dominated all aspects
of electricity generation, retail, transmission and distribution. Although the initial restructuring included plans to subsequently divest
KEPCO of these generation companies (excluding the Korea Hydro & Nuclear Power Company), the process was repeatedly delayed. In
August of 2010, Korea’s Ministry of Knowledge Economy announced that the government would instead take direct control of five of the
six generation companies, but Korea Hydro & Nuclear Power Co. will remain independent.
*Nuclear energy remains a strategic priority for South Korea, and capacity is planned to increase by 56% to 27.3 GW by 2020, and then to
43 GW by 2030. Today 21 reactors (18.7 GW) provide 22% of South Korea's electricity. The aim reaffirmed in mid 2011 is to provide 59%
of electricity from 40 units by 2030. South Korea is set to become a major world nuclear energy country, exporting technology. It won a
$20 billion contract to supply four nuclear reactors to UAE. The Korea Radioactive Waste Management Co. Ltd (KRWM) was set up as an
umbrella organisation to resolve the country's waste management issues and waste disposition, and particularly to forge a national
consensus on high-level wastes.
* The Ministry of Knowledge and Economy forecasts a growth of electricity demand by 2.5% per year for the coming years, to reach 479
TWh in 2020. At the same time, the country's installed capacity will be 94 GW: nuclear 27.3 GW, coal 26.4 GW, gas 26.1 GW,
renewable 6.45 GW, hydro 6.3 GW and oil 2.3 GW.
*Since 1993 South Korea has developed five-year Basic Rational Energy Utilization Plans. The 4th Basic Plan 2008-2012 set an energy
intensity reduction target of 11.3 % between 2007 and 2012. South Korea's Basic National Energy Plan 2008-2030 aims to reduce energy
intensity by 46 % between 2007 and 2030. The overall energy savings goal for 2030 is nearly 38 Mtoe, 44 % of which should be from
industry (17 Mtoe), 32 % from the households and services sector (12 Mtoe), 19 % from the transport sector (7 Mtoe), and 5 % from the
public sector (1.9 Mtoe).
* One of the world's fastest-growing carbon polluters, South Korea is seeking to shift from its dependence on fossil fuels by expanding
investment in green resources. South Korea's objective is to reach 11% of energy from renewable sources in its energy mix up to 2030
(against 2% in 2010). To achieve this goal, in 2011 the country earmarked $891.2 million in support for new and renewable energy
projects and financing, such as support for building solar and wind power energy facilities.
Gas
* South Korea relies on imports to satisfy nearly all of its natural gas consumption, which has approximately doubled over the previous
decade. Domestic gas production is negligible, and accounts for less than 2% of total consumption. South Korea does not have any
international gas pipeline connections, and must therefore import all gas via liquefied natural gas (LNG) tankers. As a result, although
South Korea is not among the group of top gas-consuming nations, it is the second largest importer of LNG in the world after Japan.
* The Korea Gas Corporation (KOGAS) is the leading player in South Korea’s natural gas sector. KOGAS is the sole importer and
distributor of natural gas in South Korea and the largest purchaser of LNG in the world. KOGAS operates the country’s natural gas
pipeline system and plans to become a fully-integrated energy company and is increasingly involved in upstream activities overseas.
*There are 4 LNG regasification facilities in South Korea, with a total capacity of 2,563 Bcf/y. KOGAS operates 3 of these facilities
(Pyongtaek, Incheon, and Tong-Yeong), accounting for more than 97 % of current capacity. Pohang Iron and Steel Corporation (POSCO)
and Mitsubishi Japan jointly own the only private regasification facility in Korea, located on the Southern Coast in Gwangyang. KOGAS
purchases most of its LNG through long-term supply contracts (mainly from Qatar, Malaysia, Oman, and Indonesia), and uses spot cargos
primarily to correct small market imbalances.
*South Korea produced about 19 Bcf of natural gas in 2010 from the only domestic gas field in production, Donghae-1 in the Ulleung
Basin. The Korea National Oil Corporation (KNOC) will continue production operations until about 2018, when the project will be converted
into an offshore storage facility.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
97
N/A
(Source: Unstat 2007)
Municipal waste collection (Mt)
Municipal waste landfilled (%)
18,252
36.4
Water: * According to the Ministry of environment, as of December 2007, 164 regional waterworks suppliers (7 in metropolitan cities, 1
special self-governing province, 75 cities and 81 counties) and one Seoul Metropolitan area provide water to 46.057 million, 95% of
inhabitants. The capacity of waterworks facilities is 31.265 million ㎥/day. The water supply per capita is 340 l a day and the amount has
been decreased since 2001.
Waste: * Total waste generation showed an average annual increase of 4.6% during the 2003-2007 period. Total waste generation in
2007 was 346,669 tons per day.
* Waste is composed of municipal wastes(14.5%), industrial wastes(33.1%) and construction wastes (49.6%), which accounts for the
largest portion of waste generated. This ratio indicates that construction waste dramatically increased as a result of a rise in construction
and reconstruction and from the implementation of a construction waste reporting system.
Last update: September 2011
THAILAND
POLITICAL BACKGROUND
Type of government: Constitutional monarchy
Head of State: King Bhumibol Adulyadej (Rama IX) (since 1946)
Prime Minister: YINGLUCK Shinawatra, since July 2011 (Pheu Thai party)
Key Ministers: Minister of Energy: Pichai Naripthaphan
Minister of Natural Resources & Environment: Preecha Rengsomboonsuk
Parliament: House of Representatives (lower house with 500 seats) - Senate (upper house - 150 seats)
Elected in 2011
Next poll in March 2014
COUNTRY RISK
BB+
Standard & Poor's
Non investment grade
Country vs. World Median
(Five-year risk aggregates)
Baa1
Moody's
Stable outlook
Volatile political and economic environment
can affect corporate payment behaviour.
There are concerns regarding business
climate. Corporate default probability is quite
acceptable.
A3
COFACE
SECURITY RISK
B
Control Risks 2010
35
30
25
20
15
10
But high in Areas of southern insurgency,
especially Narathiwat, Yala and Pattani
LOW
5
0
Overall
Financial
Thailand
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
69.5 Urban population
31,1%
Exchange rate (THB/USD): 30.2 (09/2011)
Nominal GDP (Bn USD)
361.1 HDI ranking
94/170
All the main components of GDP recorded slower rates of growth in the second quarter of 2011, according to the NESDB’s figures, with
private consumption expanding by only 2.8%, its slowest pace since the fourth quarter of 2009. Higher global commodity prices in 2011 will
create stronger price pressures in Thailand. The outgoing government’ decision to subsidise diesel prices since December last year at a
s
time of high global oil prices is proving costly. One of the first fiscal tests facing the government led by Yingluck will be to decide whether to
retain the cap on diesel prices at a time when the fiscal position is weakening. But Thailand current account will remain in surplus
throughout 2011-15, buoyed by a healthy surplus on the merchandise trade account. The Bank of Thailand is coming to the end of its
current cycle of policy tightening.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
7
12
6
10
8,4
6,8
8
6,8
5,6
6
5,6
4,4
4
7,8
3
3,7
4
4,6
5
3,3
4,0
3,9
2
4,2
2
1
0
0
2,1
-0,8
-1
-2
-2
-2,3
-4
2009
2010
Thailand
2010
Thailand
Current Account Balance (% of GDP)
10
8
2009
2011f
2012 f
Asia-Pacific (excluding Japan)
2011f
2012 f
Asia-Pacific (excluding Japan)
Interest rates (%)
6
8,3
5
6
5,4
5,0
4,7
4
3
4
2
3,5
3,2
2
2,9
Thailand
2,8
Short-term interest rate
1
Long-term interest rate
Asia-Pacific (excluding Japan)
0
0
2009
2009
2010
2011f
2012 f
Fiscal balance (% of GDP)
2010
2011f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
0
30,0
22,3
-1
-1,0
-2
-1,8
-1,4
18
20,0
-2,0
-2,7
-3
22,5
19,9
-1,1
-1,1
10,0
-4
-4,0
0,0
-5
Thailand
Asia-Pacific (excluding Japan)
2009
2010
2011f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The victory of the Puea Thai party, led by Yingluck Shinawatra, over the Democrat Party (DP) in the general election held on July 3rd will
not end the power struggle that has destabilised Thailand for the past five years. It is only a matter of time before enmity develops between
the new government and the royalist establishment, particularly if Yingluck seeks to pardon her brother, Thaksin, who was ousted as prime
minister in a coup in 2006.
* The incoming administration is expected to pursue populist economic policies modelled on those implemented by Thaksin during his time
as prime minister in 2001-06. Yingluck has pledged to introduce a uniform minimum daily wage and lower the rate of corporate income tax
from 30% at present to 23% in fiscal year 2011/12. Pue Thai plans also to revive a scheme under which the country’s farmers are paid a
guaranteed price for unmilled rice.
ENERGY OUTLOOK
Coal
13%
Gas 46%
Oil
14%
Electricity
(Source: Enerdata)
Capacity (2009)
35.3 GW
Production (2009)
Consumption (2009)
Biomass
17%
Installed capacity 2009
Natural gas
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
Hydro
10%
147 TWh
136 TWh
328 Gm3
31 Gm3
1317 BCF
* Thailand's energy policy pursues for main objectives: improve energy efficieny in transports and industry, strengthen security of supplies,
improve infrastructure and competition in the energy sector, and improve regional integration with neighbour countries, in order to set the
country as an "energy hub" in the region.
* The government targets to reach a 20.3% share of renewable energies in total energy consumption in 2022.
Electricity
* The total installed capacity was 35.3 GW in 2009, of which 14.3 GW (49%) from EGAT's power plants, 14.2 GW (49%) from private
power producers (IPPs and SPPs) and 640 MW (2%) from neighbouring countries power purchase. Electricity production is strongly
increasing and reached 145 TWh in 2009. Electricity demand should increase 5.7%/year in the coming years.
* The oil industry in Thailand is dominated by PTT, formerly the Petroleum Authority of Thailand. The Energy Policy and Planning Office
(EPPO), which is part of Thailand’s Ministry of Energy, oversees all aspects of the country’s energy policies, including the oil, natural gas,
and power sectors.
* The Power Development Plan (PDP) 2007-2021 defines the strategic vision for Thailand's electricity sector's development.It has been
revised on two occasions (December 2007 and March 2009) due to economic downturn. Under the Plan, the Electricity Generating
Authority of Thailand (EGAT) - the country's main power producer/wholesaler - will continue to develop major power generation projects,
while there will be a greater role for the private sector. Imports from neighbouring countries are to increase, mainly from Laos and Malaysia.
* The PDP intends to increase the country's installed capacity to 58 GW in 2021. About 32 GW of new capacity has to be built by 2021:
18.2 GW gas-fired, 2.8 GW coal-fired, 4 GW from nuclear energy and 5.1 GW from imports. From end 2011, half of these newly built
production capacities will have to be built by other producers than EGAT.
* Thailand imports electricity from Laos since 1971. To increase electricity supply, new imports are being considered. A memorandum on
the import of 1,500 MW from Myanmar has been signed.
* An interconnection project between the ASEAN countries has been under discussion for several years (ASEAN Power Grid project).
* The Thai government has implemented a Strategic Plan for Renewable Energy Development, which aims to increase alternative energy's
share of total final energy demand to 20% by 2022. There is a potential to increase solar and wind power, and significant prospects for
small-scale hydropower systems. Current support measures for renewable energy include feed-in tariffs, notably for biomass, small
hydropower, biogas, wind and solar photovoltaic.
Gas
* In 1999, the government launched the gas sector liberalization process, with a limited access of third parties to the network and an
opening of the market to competition. PTT (Petroleum Authority of Thailand) is the public company supervising the oil and gas sector. The
company holds a monopoly on gas transport and imports.
* Thailand's natural gas proven reserves are estimated at 12 Tcf in 2010. Most of the country's gas reserves are located on off-shore fields
in the Gulf of Thailand. The gas production potential is very important in Thailand, which reached 1015 BCF in 2009.Although it has risen
steadily in recent years,production is still not enough to keep up with the growth in domestic consumption.
* To meet increasing gas demand, several means are considered: joint project between Thailand and Malaysia, LNG imports contracts and
Trans-Asean gas pipeline project. PTT built a LNG regaseification terminal in Map Ta Phut, completed in Q2 2011 and which will enter into
operation in Q3 2011 (5 Mtpa of capacity). PTT is planning to double the capacity of the terminal and already secured LNG imports from
Qatar.
A memorandum was signed in 2002 between the ten ASEAN countries to build a 4,200-km Trans-Asean gas pipeline (TAGP), for a total
cost of 7 billion USD; finalization by 2020.
* The country started importing gas from Myanmar in 1999, through two long-term contracts. Imports from Myanmar amounted to 7 Gm³ in
2008. A 366-km gas pipeline between Thailand and Malaysia has been commissioned in 2005.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
98
96
(Source: Unstat 2007)
Municipal waste collection
Municipal waste generation
N/A
14,4 M tons
Water * When the privatization will be completed, a regulatory commission will supervise the water sector, and 3 governmental agencies
will be in charge of the resources management and will deal with pollution problems.
* Demand for water is about 53 billion cubic meters annually. Out of the volume, almost 90% is allocated for agriculture, 6% for
consumption, and the rest for industrial use. Demand for water in the country is estimated at 70 billion cubic meters annually.
* A privatization of MWA (Metropolitan Waterworks Authority, potable water of Bangkok) and of PWA (Provincial Waterworks Authority)
was envisaged for 2004/05, but has not taken place yet because of the arm wrestling oposing the government and labour unions.
* PWD (Public Works Department) is in charge of the production and distribution of the water in rural areas.
* Wastewater treatment is realized by 7 water companies.
Waste *Solid and hazardous waste is a serious problem facing many of the urban and industrial areas of Thailand. Considerable progress
has been made in the past decade to improve waste management practices in the country, but the unfinished agenda remains challenging.
In particular, there is a large untapped potential in recycling and waste reduction. Safe and effective municipal waste collection, treatment,
and disposal systems are only just beginning to take shape in most areas of the country.
Last update: September 2011
VIETNAM
POLITICAL BACKGROUND
Type of government: One-party rule socialist republic
Head of State: President Truong Tan Sang
Elected in July 2011
Prime Minister Nguyen Tan Dung
Next election in 2016
Key Ministers: Minister for Planning & Investment: Bui Quang Vinh (in charge of the energy sector)
Minister of Natural Resources and Environment: Nguyen Minh Quang
Parliament: Unicameral 500-member Quoc Hoi (National Assembly) meeting biannually
Elected in: 2011 2007
May
Next poll in May 2016
COUNTRY RISK
Less vulnerable in the near-term but
faces major ongoing uncertainties to
adverse business, financial and
economic conditions.
Country vs. World Median
Standard & Poor's
BB-
Moody's
B1/NEG
COFACE
C
Poor business environment. Corporate
default probability is very high.
L
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Low
SECURITY RISK
Control Risks 2010
B
High credit risk
Overall
Financial
Vietnam
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
87.9 Urban population
105.9 HDI ranking
28.8%
113/169
Exchange rate (VND/USD): 20,817 (09/2011)
* Sharply higher food prices, fuel and electricity price hikes, a devaluation of the dong in February, and recent increases in public worker
wages have combined to push consumer price inflation to 23%y/y in August. Although food price inflation is very cyclical and supply
improvements should alleviate pressures in coming months, overall inflation will remain high in 2011, forecast to average 18.5%.
Although global economic growth will slow in 2011, demand for Vietnamese goods is likely to hold up, and the manufacturing sector is
expected to ramp up production. This will require more workers, and will thus reduce unemployment. In addition, remittances from
overseas Vietnamese will stay at high levels, providing an important boost to private consumption.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
9
25
8,4
8
6,9
6,8
7
6,8
5,9
6
6,5
15
8,9
10
7,7
7,1
5,3
5
18,5
20
5
5,6
0
4,6
2009
4
5,6
2010
2,1
2011 f
4,4
2012 f
-5
2009
2010
2011 f
Vietnam
2012 f
Asia Pacific Excluding Japan
Vietnam
Current Account Balance (% of GDP)
Asia Pacific Excluding Japan
Interest rates (%)
20
5
3,5
3,2
2,9
2,8
2010
2011 f
2012 f
15
0
2009
10
-5
-4,0
-4,4
-4,5
5
-6,4
Short-term interest rate
-10
0
Vietnam
Asia Pacific Excluding Japan
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
External debt (% GDP)
2012 f
0
35,0
-1
30,0
-2
31,1
28,6
-1,4
-1,8
-3
32,2
29,7
-2,0
25,0
-2,7
20,0
-4
-5
-4,7
-4,9
15,0
-5,4
-6
10,0
-7
-8
-7,0
5,0
Vietnam
Asia Pacific Excluding Japan
2009
2010
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
* The ruling Communist Party of Vietnam (CPV) will maintain a firm grip on power in the next five years, and, despite signs of factional
splits between conservative hardliners and relatively reformist moderates, there is no prospect of major instability within the
party.However, one of the five key challenges the leadership has said it will focus on in 2011–16 is "ideological and organisational"
strengthening of the party. Problems of endemic corruption, and inefficiencies in the administration which hinder policy-making could fuel
discontent over the uncontested dominance of the CPV. The party ranks are also ageing and there is a growing need to attract new,
young talent, although interest in the party has been fading in recent years.
* Vietnam will continue to make strides in strengthening its ties with the West, and particularly with the US. Relations with China will
remain strained over competing claims to the Spratly and Paracel islands in the South China Sea.
ENERGY OUTLOOK
Oil 11%
Gas
41%
Wind &
Geothermal 1%
Electricity matrix
(installed capacity)
in 2009
Hydro
36%
Coal
12%
Electricity (Source: Enerdata)
Capacity (2009)
17.5 GW
Production (2009)
81.8 TWh
Consumption (2009)
76.1 TWh
Natural gas (Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
7 TCF
250 BCF
250 BCF
* Vietnam holds important energy resources: hydropower (potential of 18,000 MW - 90 Twh production), lignite (36 to 100 billion tons in
Red River Delta), coal (5.7 billion tons reserves), oil (81.6 million tons) and natural gas (reserves of 250 TCF).
Electricity
* Although Vietnam’s per capita electricity consumption is among the lowest in Asia, demand has risen in recent years, straining the
country’s limited generating capacity. Rapid commercial sector growth, population migration to major cities, and elevated living standards
have all contributed to a growing demand for electricity.
* The rate of electrification of rural households increased from 63% in 1998 to 91% in 2009. The country's overall electricity coverage
was 97% in 2009.
* In July 2011, the Prime Minister of Vietnam approved the national power development plan for the 2011-2020 period with the vision to
2030 (the "Power Master Plan VII" (PMP VII). The PMP VII puts strong emphasis on energy security, energy efficiency, renewable
energy development and power market liberalisation.
* The PMP VII foresees to increase the aggregate output of imported and produced electricity from 194-210 TWh by 2015 to 330-362
TWh by 2020 and 695-834 TWh by 2030. It gives priority to the development of power generation from the renewable energy with the
increase from the present 3.5% of the total electricity production to 4.5% in 2020 and 6% in 2030. It aims at providing access to the
electricity for the most of the rural households by 2020.
*To implement the PMP VII, the State estimated that the total investment capital required for the power sector is approximately USD 48.8
billion up to 2020, of which two-thirds will be used for power generation development and one-third for power network development, and
up to approximately USD 75 billion for the period from 2021 to 2030 (65.5% for power generation development and 34.5% for network
development).
* State-owned Electricité de Vietnam (EVN) dominates generation, transmission, distribution and sales of electricity. The growing
demand for electricity led the government to open power production to independent producers (IPPs), through BOT contracts. The
Vietnamese authorities are progressively opening the national electricity market to competition, since 2005: separation of distribution
companies, creation of a national grid manager, creation of a regulatory authority to supervise the market liberalisation and deliver
operation licenses.
* EVN plans to develop a national electricity grid by 2020 by patching together several regional grids. The country’s distribution
infrastructure is poorly maintained, but has benefited from recent improvements. A North-South power cable transmits electricity from
Vietnam’s largest generator, the Hoa Binh hydropower plant in the North, to large population centers in the South, linking the country into
one electricity grid and helping alleviate electricity shortages in Ho Chi Minh City.
* Vietnam has been exporting electricity to Cambodia since 2002 and importing gas from China since 2004.
* In July 2011, the Vietnam Atomic Energy Institute (VAEC) stated that the first nuclear power plant will be built by Russia and a potential
second construction project beginning in 2015 could be given to a Japanese company. The government plans to increase the nuclear
capacity by 2,000 MW each year between 2020 and 2025, to reach a total nuclear capacity of 10,000 MW in 2025.
Gas
* Vietgas is the national company responsible for the development of gas projects.
* Vietnam has proven gas reserves of 7 trillion cubic feet (TCF). Vietnam’s natural gas production and consumption have been rising
rapidly since the late 1990s, with further increases expected as additional fields come onstream. Natural gas is currently produced
entirely for domestic consumption. The Cuu Long basin offshore from the Mekong Delta in southern Vietnam, a source of associated gas
from oil production, is the largest Vietnamese natural gas production area.
* Only two fields in Vietnam have been developed specifically for their natural gas potential: Tien Hai, with a potential output of 1.76
million cubic feet per day (Mmcf/d); and Lan Tay/Lan Do of Nam Con Son, which began producing over 5 Mmcf/d in 2002.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Waste
(Source: Ministry of Environment)
Access to drinking water (%)
94
Municipal waste collection (2005)
71.0 %
Access to sanitation (%)
75
Municipal waste generation (2010)
15 Mt/year
Water: * Water demand is strongly growing, driven by demographic growth and urbanization. Obsolete infrastructure and inadequate
management leads to waste and inefficient exploitation and use of water. Water quality is deteriorating in many areas due to urban and
industrial activities. Local and seasonal shortages are increasingly frequent. The rate of water loss in some urban water supply systems
is 40-50%.
* The National Water Resources Strategy 2020 was adopted by the government in 2006, aiming at a more effective and sustainable
management and utilisation of water resources. The strategy also aims at improving the coverage and quality of water services, including
sanitation and waste water. The implementation of the 2020 strategy requires to increase drinking water production to 16 million m³ /day
in 2020. The document targets 100% of access to drinking water and 80%-90% access to sanitation by 2020. In order to meet these
objectives, the government appeals to the private sector, through BOT contracts.
Waste: Vietnam produces 15 million tons of municipal waste per year (80% domestic, 18% industrial, 2% hazardous), most of which is
landfilled (2010). Population of large cities makes up 25% of the national population but produces more than 50% total solid waste. The
waste management system is plagued by a number of problems, including inadequate management, lack of technology and human
resources, a shortage of transportation vehicles and insufficient funding. The 2005 revised Law on environmental Protection sets the
development of waste collection and treatment as a priority, and aims at collecting, transporting and treating 80-95% of waste generated
in urban and industrial areas by 2020. It plans to invest in 2 centers for hazardous industrial solid waste treatment.
VIII-AFRICA & MIDDLE EAST
Algeria
Bahrain
Cameroon
Egypt
Iraq
Jordan
Kuwait
Lebanon
Libya
Morocco
Oman
Qatar
Saudi Arabia
South Africa
Syria
Tunisia
United Arab Emirates
Yemen
Last update: March 2011
ALGERIA
POLITICAL BACKGROUND
Type of government: Presidential Republic
Head of State: Abdelaziz Bouteflika (National Liberation Front - FLN)
Elected since April 1999, reelected in 2004 and 2009
Next poll in April 2014
Key Ministers: Minister of Energy and Mines: Youcef Yousfi
Minister of Environment: Cherif Rahmani
Minister of Water Resources: Abdelmalek Sellal
Parliament: Bicameral Congress: People's National Assembly (lower house) with 389 seats - Council of the Nation (upper
house) with 144 seats
Elected in: May 2007
Next poll: May 2012
COUNTRY RISK
Country vs. World Median
N/A
Standard & Poor's
(Five-year risk aggregates)
N/A
Moody's
35
The political and economic outlook and a
relatively volatile business environment
can affect corporate payment behaviour.
A4
COFACE
Corporate
default
probability
is
B
20
15
10
0
High in North and North-East of the
country
H
25
5
acceptable on average.
SECURITY RISK
Control Risks 2010
still
30
Overall
Financial
Algeria
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2011)
Population (Million)
36 Urban population (2015 p)
69%
Exchange rate (DZD/USD): 71.77 (07/2011)
Nominal GDP (Bn USD)
189,1 HDI ranking
84/169
* The economic outlook has improved, driven mainly by a pickup in global oil prices;
* The nonhydrocarbons sector will continue to expand in the coming years, although its share of overall GDP means that this will not add
significantly to overall growth in the economy. Fiscal policy in the forecast period will be dominated by the state’s ambitious five-year,
286 bnUSD investment plan. This spending will focus on developing the non-hydrocarbons sector.
* Overall, the country's economic growth is expected to slide back to 2.7% in 2011 from an estimated 4.6% in 2010 before rebounding to
4.2% in 2012.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
7
4,6
5
3,1
4,5
4,2
4,4
3
2,1
1
-1
2,7
2009
2010
2011
2012
-3,9
-3
-5
11
10
9
8
7
6
5
4
3
2
1
0
10,0
6,5
5,7
7,8
6,5
4,8
2009
Algeria
4,9
2011
2012
3,9
2010
Algeria
North Africa
Current Account Balance (% of GDP)
North Africa
Interest rates (%)
4
30
25
3
20
15
Short-term interest rate
10,7
10
9,5
5,5
2
5
0,3
0
-5
2,5
1,0
-0,8
2009
2010
Algeria
2009
2011
2012
0
North Africa
Fiscal balance (% of GDP)
2010
1
1,7
2011
2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
External debt (% GDP)
2012
4
5,0
1,7
2
4,0
3,8
3,7
3
2,7
3,0
0
-0,5
2,0
-2
-4
-2,9
-3,1
1,0
-4,0
-6
-5,6
Algeria
North Africa
-5,2
0,0
2009
2010
2011
2012
Last update: Septembre 2011
POLITICAL OUTLOOK
* President Bouteflika has promised constitutional reform and lifted the state of emergency. However, the situation will remain of concern
for the near future, as the succession of President Bouteflika appears to be more and more difficult, and economic and social structures
remain unchanged for decades. Algeria is seen as a very unstable country for the coming years.
* Sporadic attacks by the Al Qaeda radical Islamist group remain possible and could have a destabilising effect. The group is most active
in the remote easterly regions of the country, where it is engaged in bitter clashes with security forces on an almost daily basis.
* Algeria will continue to be a major regional ally of the West in the campaign against Islamist militancy, and will be the main military
force behind efforts to weaken AQIM in its Saharan and Sahel neighbours . Relations with the EU will be stable.
* Algerian regime is embarrassed by its unofficial support of Gaddafi that might cause harsh relationships with the new libyan rulers
(NTC) in the coming months. At the same time, Algerian-Moroccan relationships seem to improve, as shown by the recent agreement on
natural gas supply to Morocco (due to start in September 2011).
ENERGY OUTLOOK
Hydro
2%
Oil 8%
Electricity
(Source: Enerdata)
Capacity (2010)
11.3 GW
Production (2009)
Consumption (2009)
Electricity matrix
(installed capacity 2010)
Natural gas
(Source: Enerdata)
Proven reserves (2009)
Production (2009)
Consumption (2009)
Gas
90%
41.5 TWh
30.7 TWh
4504 Gm3
78 Gm3
27 Gm3
Electricity
* Algerian power generation installed capacity was 11.3 GW in 2010, 98% of which is thermal and 2% hydro. The domestic power
demand increase is estimated at 6,7% /year by 2016.
* Sonelgaz is Algeria's supplier of electricity and gas. It is involved in production, transport and distribution of electricity and gas by
pipeline. It has 31 subsidiaries and nine joint ventures. It has a total electricity network of 271,600 Km and a total installed capacity of
8.44 GW. It has an electricity customer base of 6.5 million and of 2.6 million for its gas distribution services.
IPP' contribution should reach 30% of the total power production of the country.Today there are 3 operating IPPs with a total capacity of
1650 MW.
* Regulatory issues and privatisation progress lag the regional average although certain country risk factors are more favourable.
Between 2010 and 2014, electricity consumption per capita forecast to increase by 16% respectively. Power consumption amounted to
an estimated 30.7TWh in 2009 and is forecast to reach 38.9TWh by 2014. An increase of 400% in hydro-power use during 2010-2019 is
one key element of generation growth.
* A REN & EE ambitious programme calls for 40% REN out of a total 150TWh demand by 2030. EE targets would be for the sectors of
buildings and industry.
* Algeria is looking forward to develop its first nuclear power plant by 2020 - 2025, A nuclear safety agency is to be set as well as a
company dedicated to civil nuclear power development.
Oil & Gas
* With 4504 Gm3 of reserves, Algeria exported 2/3 of its production in 2009. leading to a reserves-to-production ratio of 42 year. Current
gas export strategy maximises value of available volumes, as Sonatrach is currenlt unable to maintain market share on the global
market. This implies minimal or no flexibility on oil-indexation, reduced spot sales, some relaxation of take-or-pay.
* The country's largest gas producing fields are Hassi R'Mel and the Illizi Basin on the Algerian - Libyan border. Hassi R'Mel accounts for
about 60% of Algeria's natural gas production, but production is reaching a plateau. This cretaes the need for new pipelines linking other
Southern fields to the main grid.
* Gas was the dominant fuel in 2009, accounting for an estimated 61.7% of primary energy demand, followed by oil at 36.2%, and coal
with a 1.8% share. Local demand is expected to grow to 102 Gm3 by 2030
* Alnaft (the national agency in charge of hydrocarbon sector) has launched on September 30-2010, the 3rd bid round for 10
hydrocarbon blocs in the South of Algeria. On March 2011, Two perimeters were attributed for expolration, one for Cepsa and another for
Sonathrach.
* Algerian exported 51 Gm3 in 2009, 60% by pipeline and 40% by LNG shipments. The major Algerian gas clients were Italy (43%),
Spain (23%) and France (15%). The export capacity of LNG is expected to increase by 16% by 2012 and 46% by 2014 compared with
the 2009 level as two projects are under construction : Gassi Touil and Skikda (reconstruction).
* Medgaz pipeline was inaugurated on 1st March 2011 and first gas is expected in April, with an initial capacity of 390 Mmcf/d, increasing
to 1.55 Bcf/d. The Galsi pipeline will run between Gassi R'Mel - El Kal in Algeria, to Sardinia and eventually to Piombino, Italy, where it
will be connected to the Italian grid and to serve the Northern Italian market. It shall have a capacity of 8 Gm3/yr and then grow up to 18
Gm3 and is expected to be completed by 2014-2015.
* Sonatrach (state owned hydrocarbon producer) controls natural gas exploration, production and trading. Sonatrach is the n°1 African
oil and gas producer, the 2nd world LNG exporter and the 3rd world leader in natural gas export. The company aims to develop
internationally through strategic partnerships with foreign companies such as BP, ENI, Statoil, Total, GDF SUEZ, Gazprom among
others.
ENVIRONMENT OUTLOOK
Water (Source: ONA March 2010)
Access to drinking water (%)
93
Waste
(Source: SWEEPnet 2010)
Municipal waste generation (mt)
Access to sanitation (%)
86
Municipal waste landfilled
8500 (85% urban, 60% rural)
Water: * Most water resources in Algeria are polluted by uncontrolled and untreated municipal wastewater. However, Algeria has multiplied by three
times its capacity of producing drinking water, in less than 10 years, according to national sources. 93%percent of the population is linked to drinking
water networks, and 86% domestic waste water networks. The government has invested 12 billion USD, as part of the 2010 - 2014 development
plan, to build 18 new dams, pursuing the sea water desalination and waste water treatment programs, as well as the exploitation of groundwater in
northern Sahara to transport it into the north and far south regions.
* Algeria and Morocco concluded in March 2011 in Rabat a memorandum of
cooperation in water resources, to promote bilateral cooperation between the two countries. The agreement provides for boosting cooperation
between Algeria and Morocco mainly in irrigation, hydraulics, dam management, water transfer and seawater desalination.
Waste: * Since 2000, a number of laws have been adopted covering the waste management. Scare resources and institutional changes pose a
challenge for implementation and enforcement of the environment legislation. Private Sector involvement n collection is confined to a limited and
uncontrolled recovery of recyclable waste at landfills.
Last update: Septembre 2011
BAHRAIN
POLITICAL BACKGROUND
Type of government: Constitutional Monarchy
Head of State: King Hamad bin Isa al-Khalifa
Enthroned in 1999
Parliament: National Assembly, composed of two chambers: Council of Representatives (Majlis an-Nuwab) - Consultative
Council (Majlis al-Shura)
Elected in November 2010
Next poll : October 2011 (second round)
Minister of Water and Electricity: His Excellency Dr . Abdul Hussein Ali Mirza
COUNTRY RISK
Adequate capacity to meet financial commitments,
but more subject to adverse economic conditions.
BBB
Standard & Poor's
The government would have the capacity to
sustain a coherent economic policy framework and
avoid any near-term debt repayment problems if
confronted with a severe shock to public finances.
Baa1
Moody's
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
A somewhat shaky political and economic outlook
and a relatively volatile business environment can
affect corporate payment behaviour. Corporate
default probability is still acceptable on average.
A4
COFACE
15
10
5
0
SECURITY RISK
Control Risks 2010
B
M
Overall
MEDIUM
Financial
Bahrain
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
1.15 Urban population (2015 p)
22,1 HDI ranking
91.4%
39/169
Exchange rate (BHD/USD): 0.38 (09/2011)
* The ongoing turmoil has been damaging to the tourism industry and to retail businesses primarily, causing cruise ships to skip their port-calls in
Manama and shop owners to miss revenue targets. Domestic demand will soften as tighter security conditions erode consumer morale and create
logistical constraints that discourage labourers from attending jobs. With the political uncertainty expected to persist for much of the year, we have cut
our real GDP growth expectation to 2.8% for 2011, marking a slowdown from growth of 4.5% in 2010.
* Although fiscal revenues are expected to stagnate, public spending will continue to rise due especially to the ongoing investment and subsidy policy
(water, electricity, petrol, food products) benefiting the neediest Bahrainis as well as the specific measures to pre-empt the unrest intensification.
Real GDP Growth (%)
CPI Inflation (%)
8
14
7
12
5,5
6
5,1
6,8
8
4
3,1
4,0
6
4,1
4,4
3
2
1
2,8
0
0,7
2009
2010
2011f
Bahrain
4,4
4
2,8
2
0
8,7
10
4,5
5
2012f
-2
2009
Middle East
2,0
-1,1
1,8
2010
2011f
2012f
Bahrain
Current Account Balance (% of GDP)
Middle East
Interest rates (%)
14
25
13
20
12
19,2
15
14,7
8,7
10
Short-term interest rate
11
16,2
10
12,1
4,0
9
5
8
0
2,9
3,5
2009
7
2010
Bahrain
2011f
2012f
6
Middle East
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011f
8
70,0
6,2
6
4,6
4
60,0
56,2
53,4
1,7
2
External debt (% GDP)
2012f
50,7
50,0
48,4
0
40,0
-2
-1,3
-1,7
-2,2
-4
-6
-5,1
-5,6
20,0
-8
Bahrain
30,0
Middle East
2009
2010
2011f
2012f
Last update: Septembre 2011
POLITICAL OUTLOOK
* The regime seems to have regained control of the situation using massive repression and armed forces from Saudi Arabia. Around 50
protestors were killed, 1000 were injured and at least 800 persons were arrested. The 4-month state of emergency and martial law has
confined the social unrest.
* The blatant political underrepresentation of the Shia majority has implied significant consequences: on the international scene, Bahrain
emerged as a “fault line” between the Shia and Sunnidominated countries, even though the influential role assigned to Iran appeared
relatively weak. On the domestic front, sectarian tensions shall outlast unless economic and social reforms are implemented. * The risk of
sectarian clashes will rise.
* A “national dialogue” was opened between the monarchy and the opposition groups for the first time since antigovernment protests.
Bahrain's largest Shi'ite opposition group Wefaq has refused to participate in the Parliamentary elections planned for 24 September, wich
registered a very low participation rate (17%).
* Bahrain government remains sensitive to signs of Iranian interference with the country’s Shi’a population. Bahrain benefits from its close
relations with Saudi Arabia, which provides the island with strong, multi-dimensional support, such as military aid, and will likely ramp up
its aid if the country ever comes under threat from Iran.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2008)
4.7 GW
Production (2008)
Consumption (2008)
Electricity matrix
(installed capacity)
in 2008
Gas
100%
Natural gas
11.7 TWh
10.9 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
3 TCF
446 BCF
446 BCF
* The Supreme Oil Council is responsible for Bahrain oil and gas sectors. The State holds through public companies most of the
production, transport and distribution facilities in both sectors.
* In 2008, gas covered 52% of the final energy consumption in 2008, oil 26% and electricity 22%.
Electricity
* The Ministry of Electricity and Water (MEW) is responsible for the electricity sector. Bahrain electricity sector is fully public. The 645-km
electricity network is managed by the Directorate of Electricity and Water Transmissions.
* Total installed capacity was 4.7 GW in 2008 (100% gas-based). Electricity production is rapidly increasing since 2000 (+8%/year) and
reached 11.7 TWh in 2008.
* There are 7 power plants in Bahrain, and one aluminium-based plant, ALBA, supplying 270 MW since 1994.
* The strong growth in electricity demand requires new investments. It leads the government to renovate the existing facilities and set up
new infrastructure. The authorities intend to develop the electricity distribution network and interconnections with neighboring countries to
meet the growing demand. Sitra refinery's capacity will be extended (to 350,000 barrels/day), and could be associated with the
development of a oil exports terminal.
* The increase in electricity demand also led the government to gradually open the sector to private companies. Bahrain has encouraged
independent power projects (IPPs) and has allowed the privatization of some state-owned power sector assets. Bahrain’s first IPP power
station (in which GDF SUEZ is a 45% shareholder), the natural gas-fired Al Ezzel plant, started commercial operations in 2006 with an
initial capacity of 470 MW. Phase 2 added 480 MW, bringing the total capacity to 950 MW during 2007.
* A new power station is currently under construction at Al Dur by GDF SUEZ and Gulf Investment Corporation. The Al Dur project
consists of a combined cycle gas turbine power plant and a desalination plant. The complex will have a capacity of 1,234 MW of power
and 218,000 m³/day of water.
* Bahrain intends to develop renewable energies. The government launched early 2010 a call for a research project on a mixed wind-solar
plant (5 MW) to enter operation by 2012. The development of nuclear energy is also under consideration by the authorities.
Oil
* Proven oil reserves were estimated at 17 million tons in 2008. Oil production reached 9.3 million tons in 2008, 3/4 of which coming from
the offshore Abu Saafa field, shared with Saudi Arabia. Nearly all oil produced in Bahrain is exported to India.
* The public company BAPCO (Bahrain Petroleum Company) is responsible for exploration, production, refining, selling and distribution of
oil on the domestic and international markets.
* BAPCO exploits the Awali oil field, whose production is decreasing with the sharp depletion of reserves: the production was about
35,000 barrels/day in 2006, against 75,000 barrels/day in the 1970's.
* The resolution of the sovereignty disagreement with Qatar over the Hawar island in 2001 allowed the Bahraini government to launch a
tender for the exploration of three concessions situated near the islands. It was attributed to Texaco and Petronas.
* The low oil resources led Bahrain to develop a strong refining activity. Refining capacity is currently of 260,000 barrels/day.
Gas
* Gas reserves were 3 TFC in 2009. Gas production reached 444 BCF in 2009.
* Gas exploration and production is under the responsibility of the Barhain National Gas Company (BANAGAS), held 75% by the State.
* Bahrain faces gas supply problems which limit its industrial production. Bahrain plans to increase its gas production with the drilling of
new wells in Awall oil field in order to double gas extraction to 25 million m³/year. Moreover, the government considers a gas imports
agreement with Qatar, and is negotiating with Iran a supply contract for 10 million m³/year of gas supplies.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Waste
(Source: Unstat 2007)
Access to drinking water (%)
100
Municipal waste collection (mt)
N/A
Access to sanitation (%)
100
Municipal waste landfilled
N/A
Water: * More than half of the country's water is provided by the Hidd independent water and power plant (IWPP), with just 15% of consumption
provided by ground water in 2008. Desalinated water now accounts for more than 80% of Bahrain's water provision, a proportion that is likely to
increase over time. Desalinated water capacity has increased significantly in 2009 with the commissioning of the third phase of the Hidd Power
Company desalination plant, which has raised output to 90 million gallons/day. * The Electricity and Water Authority (EWA) is responsible for the
production and supply of power and water in Bahrain. It has successfully pushed for the development of IWPPs, with the commissioning of the Hidd
phase 3 and now the award of the Al Dur IWPP contract. * The kingdom has also drafted a national policy for wastewater, including reuse of treated
sewage effluence. A major boost to wastewater treatment capacity will come with the development of the Muharraq wastewater plant (100,000150,000 m³/day capacity). * Bahrain has announced in 2008 a reorganization of its water sector to optimise the planned investments. Measures
include the establishment of a new water authority to streamline management of water resources, and a strategic partnership with Singapore's water
agency. Major investments are planned to increase water desalination production and develop new transmission and storage facilities.
Last update: September 2011
CAMEROON
POLITICAL BACKGROUND
Type of government: Unitary Presidential Republic
Head of State: Paul Biya (Cameroon People's Democratic Movement)
Elected in 2004
Next poll: October 2011
Key Ministers: Ministry of Energy and Water Resources: Michael Ngako Tomdio
Ministry of Environment and Nature Protection: Hele Pierre
Parliament: National Assembly with 180 members
Elected in 2007
next poll : July 2012
COUNTRY RISK
Standard & Poor's
B
Moody's
Country vs. World Median
N/A
Non investment grade
30
A very uncertain political and economic outlook
and a business environment with many
troublesome weaknesses can have a significant
impact on corporate payment behaviour.
Corporate default probability is high.
C
COFACE
SECURITY RISK
Control Risks 2010
B
(Five-year risk aggregates)
35
The security risks are highest in Yaoundé,
Douala and Bamenda, extreme north
M
25
20
15
10
5
0
Overall
Financial
Cameroon
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2009)
Exchange rate (LCU/US$): 485,02 (09/2011)
Population (Million)
17.7 Urban population (mil.)
9.71
Nominal GDP (Bn USD)
20 HDI ranking
153/182
*The economy is forecast to improve and to grow by 3% in 2011 and 4.3% in 2012. Growth in 2011 will be supported by government
consumption (despite official claims to the contrary), investment and mining. Oil production is expected to recover to 64,700 b/d in 2012 as
new wells start production, which will drive exports and stronger growth. Mining and infrastructure projects will also drive construction
growth.
* The government will struggle to control spending during a presidential election year. It has already offered electricity and food subsidies,
as well as a massive civil-service recruitment drive to placate unemployed youth. However, after the presidential election, the government
is expected to sign a new agreement with the IMF and to reduce elections driven expenditures.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
7
10
9
6
5,2
5
5,5
7,8
9,1
8,9
8
4,6
7
4
3,0
6,3
5
3
3,5
4
1,9
2
3,0
3
1,9
1
7,2
7,2
6
4,5
2
1
0
1,3
0
2009
2010
Cameroon
2011 f
2012 f
Sub-Saharan Africa
2009
2010
Cameroon
Current Account Balance (% of GDP)
2011 f
2012 f
Sub-Saharan Africa
Interest rates (%)
10
5
9
3
2,3
8
1,3
1,4
7
0,4
1
6
1,3
0,6
5
-1
4
-3
3
-2,2
-2,4
2
-5
Short-term interest rate
1
2009
2010
2011 f
Cameroon
2012 f
Sub-Saharan Africa
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
Fiscal balance (% of GDP)
2009
2010
2011 f
2012 f
9
7
5
5,0
4,9
4,9
4,8
3
1
-1
-3
-5
-3,3
-3,3
Cameroon
-2,5
Sub-Sarahan Africa
Policy rate
0
-2,6
100,0
90,0
80,0
70,0
60,0
50,0
40,0
30,0
20,0
10,0
0,0
4,7
4,8
2009
2010
4,5
2011 f
4,5
2012 f
Last update: September 2011
POLITICAL OUTLOOK
*Despite some signs of budding unrest within the RDPC over Paul Biya criticized long tenure as president, the party elites remain united
behind him. Mr Biya blatant disregard for party regulations and internal democracy illustrates his overwhelming influence over the political
scene.
*Cameroon’s main opposition party, the Social Democratic Front (SDF), backtracked on its threat to boycott the forthcoming presidential
election when it urged voters to register for the poll, causing confusion among its supporters, especially as the decision to participate came
only three weeks before the end of the voter registration period.
* The high level of poverty (40% of the population), an unsatisfactory access to basic public utilities as well as the high cost of living
resulting from insufficient infrastructure, constitute risk factors, while the elections could also delay the implementation of key programmes.
ENERGY OUTLOOK
Electricity (Source: Enerdata)
Capacity (2008)
0.97 GW
Production (2008)
4.2 TWh
Consumption (2008)
3.6 TWh
Oil
25%
Electricity matrix
(installed capacity in 2008)
Hydro
75%
Natural gas (Source: EIA)
Proven reserves (2008)
Production (2008)
Consumption (2008)
4.8 TCF
0.7 BCF
0.7 BCF
Electricity
* Total installed power generation capacity of Cameroon is 970 MW, of which 725 MW of hydroelectricity (95% of toal power production).
In 2008, the electricity production was 4.2 TWh, produced at 95% by hydropower stations. Cameroon’s heavy reliance on hydropower
leaves its energy sector extremely vulnerable to drought. Despite the country’s weak industrial base, the aluminium industry accounts for
about half of all electricity consumed in Cameroon. Because there is no nationwide grid, 20% of the electricity produced is lost, even
though the south is undersupplied. In urban areas about 65% of population have access to electricity while in rural areas they are less than
10%.
* Cameroon's estimated hydroelectric potential is 35 GW (highest in Africa after Democratic Republic of Congo). Even with only around
2% of this potential developed, hydroelectricity accounts for about 95 to 97% of electricity generation in Cameroon. The main dams are:
Sanaga, Edea (262 MW), Song Loulou (388 MW) and Lagdo (72 MW) that need to be modernized. Construction of two dams, 51 MW
Lom Pangar dam on Sanaga river and 200 MW Memve’ele dam on Ntem, is on-going and due to be finalized in 2015.
*Following liberalisation of electricity sector in 1998 private operators have access to production, transportation and distribution. AES
Sonel (AES 56% and Cameroon State 44%) is the main national electricity company operating under 20 years concession scheme since
2001.
* Cameroon‘s long term strategic plan for electricity sector (for 2007 – 2030) aims to develop new generation capacities, with specific
focus on hydropower and solar, to develop and to up-grade power transmission and distribution infrastructures. Electricity prices regulated
by Arsel (national regulator) has been stable since 2008. Pending further hydropower development, AES Sonel has begun building thermal
power plants with an average annual irradiation of 4 KWH/M2 /day in Cameroon, the potential of solar energy is however not being
exploited ; same follows with wind energy where suitable sites in the Northern provinces are not being used.
*Cameroon is studying the possibility of implementing Interconnections with Chad, Equatorial Guinea and Nigeria.
Oil & Gas
* Cameroon's hydrocarbon industry has been developed as an oil basin with oil production since 1977. Oil production peaked in 1986 at
182,000 bpd. Production is now in decline, currently 85,000 bpd. Oil exploration potential is uncertain. The Cameroonian government is
initiating new licensing rounds in the Rio del Rey basins, and positive results are expected on the Douala/Kribi-Campo and Longone-Birni
basins. New discoveries on these concessions will probably allow Cameroon to contain the recent declines in oil production. The
resolution of the territorial dispute with Nigeria in the Bakassi Peninsula should also open new oil-production streams. Both will help to
stem the rapid decline in oil production in the medium term.
* Cameroon holds sizeable gas reserves (235 Gm3). There is today no non-associated gas production in the country. These resources are
divide among many players: Total (≈ 15%) and Shell ( ≈ 15%) as they share blocks together, Noble (8%), Petronas (8%), while remaining
53% are controlled by SNH (Société Nationale des Hydrocarbures) together with the smaller up-stream contractors.
* Cameroon's gas resources are the unintended by-products of oil exploration. To date, no exploration or appraisal wells have been drilled
targeted gas. The State has defined fiscal terms for oil but not for gas. Investors have been unwilling to invest in gas in the face of fiscal
uncertainty.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2007)
Waste
Access to drinking water (%)
74
Municipal waste collection (mt)
N/A
Access to sanitation (%)
47
Municipal waste landfilled
N/A
* Water: About 72% Cameroon's water resources are concentrated in the central part of the country which shares important hydro basins
with Congo, Niger, and Chad. Cameroon has large water resources: about 120 Bcm of underground water and 235 Bcm of annual
renewable water resources. This is twice of potential of France. However, due to poor institutional governance and outdated and poor
water infrastructures, only 30% of households in Cameroon have direct access to drinking water. CDE (Caméronaise des eaux), the water
utility of Cameroon, is in charge of production, distribution of drinking water. Today, the water deficit is about 53.000 m3 in Yaoundé
(capital city) and 165.000 m3 in Douala. The situation in the medium size towns is even worse while the rural population has very limited or
no access to drinking water.
* Considering the buoyant prospects for economic growth and increasing purchasing power, potable water demand in urban areas should
increase significantly over the next decade. Cameroon’s government is targeting a water point (well) for every community of 300 – 500
inhabitants, communities of 2500 – 5000 inhabitants will benefit from a potable water supply system (through pumping or gravitation with
cursory treatment). The target water service rate is 46% by 2016 (53% in Douala and Yaoundé compared to 30% and 35% nowadays).
Investment programs are scheduled to go towards hydraulic diagnosis, master schedules, existing infrastructures renewal and
rehabilitation.
* Camwater (Cameroon water utilities corporation) created by the President Biya in 2005 after privatization of the national water company
SNEC (Société nationale des eaux du Cameroun) is in charge of the development and modernization of the water sector and has engaged
an ambitious investment program in water sector in cooperation with multilateral financial institutions such as the WB and AFD.
Last update: Septembre 2011
EGYPT
POLITICAL BACKGROUND
Type of government: Republic
Head of State: Supreme Council of the Armed Forces
Political transition context
Next poll : To be determined
Prime Minister: Essam Charaf
Minister of Electricity and Energy: Hassan Ahmed Younes
Minister of Water Resources and Irrigation: Hicham Ahmed Qandil
Minister of State for Environmental Affairs: Maged George Elias Ghattas
Parliament: Bicameral Congress: Maijlis al-Shaab (lower house) - Ajilis al-Shura (upper house)
Elected in 2005
Next poll: from 21 nomvembre to 22 january 2012
COUNTRY RISK
Less vulnerable in the near-term but faces major
ongoing uncertainties to adverse business,
financial and economic conditions.
No clear and present repayment concern and
tangible adjustment capacity in a context of
potentially severe economic, financial or political
shocks.
Political and economic uncertainties and an
occasionally difficult business environment can
affect corporate payment behaviour. Corporate
default probability is quite high.
BB
Standard & Poor's
Ba3
Moody's
B
COFACE
SECURITY RISK
B
Control Risks 2010
M
Country vs. World Median
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Overall
Medium
Financial
Egypt
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2011)
Population (Million)
83 Urban population (f2015)
43.6%
Exchange rate (EGP/USD): 6,05 (07/2011)
Nominal GDP (Bn USD)
232,0 HDI ranking
101/169
* The protests in Egypt have led to disruptions to normal business activities, especially tourism, which will adversely affect the Egyptian
economy's overall performance for 2011. The real GDP growth for 2011 is estimated at 0.3%, down from 5.1% prior to the crisis. Exports,
imports, private consumption and fixed investment will be severely hit as well. The scale of the repercussions on economic activity will
depend on what happens during the transition period. At this stage, it appears that the economy is likely to escape the recession for the tax
year July 2010-June 2011, given the growth established prior to the events.Egypt’s public finances and external accounts are also expected
to deteriorate in light of the disruptions to economic activity. The budget deficit is now estimated at 10.5% of GDP in 2010/11. The
international financial aid packages should provide ample cover for the remaining financing requirement in 2011 and 2012.
* International aid programme for Egypt amounts 12 Bln USD for 2011-2013.
9
Real GDP Growth (%) change from a year earlier
5
3
CPI Inflation (%) change from a year earlier
14
7
12,0
5,1
4,5
4,6
12
11,8
2,9
4,4
3,1
12,5
11,1
10
10,0
0,3
1
8
-1
7,8
6
-3
-5
2009
2010
Egypt
6,5
6,5
4
-3,9
2011
North Africa
2012
2009
2010
Egypt
Current Account Balance (% of GDP)
2011
2012
North Africa
Interest rates (%)
14
3
1,7
2,5
1,0
1
13
-0,8
12
-1
11
-1,8
-3
-2,7
-3,5
-3,9
10
2012
9
Short-term interest rate
-5
2009
2010
Egypt
2011
North Africa
2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Fiscal balance (% of GDP)
2009
2010
2011
External debt (% GDP)
2012
0
24
-2
22
-2,9
-4
20
-4,0
-6
-6,6
-8
-5,2
-5,6
18
17,7
15,7
16
-7,7
15,8
14,6
14
-10
-10,5
-12
Egypt
North Africa
-10,1
12
2009
2010
2011
2012
Last update : Septembre 2011
POLITICAL OUTLOOK
* A new constitution should be prepared by the end of the year, with new Parliament and Presidential elections. There is strong uncertainty
concerning the outcome of the elections. The majority of the population calls for a return to normality, even if a part of the Egyptian youth still protest
against the direction that political transition is taking. The proposed Supreme Coucil of Armed Forces transition plan is fiercely debated across the
political spectrum.It faces a tough task meeting the huge expectations the revolution has generated.
* Egypt's ruling military council has proposed the date of 21 November for the start of the first parliamentary elections since the fall of President
Hosni Mubarak. People's Assembly, would be in three stages, the first on 21 November and the last on 3 January. Upper house elections would
spread from 22 January to 4 March. Quick elections could unfairly benefit the Freedom and Justice Party, set up by the Muslim Brotherhood, which
has however confirmed that it will not be participating in presidential election and it would contest only up to 50% of seats in parliamentary elections.
* The political transition is under strain, with violent repression. The transmission to social tensions is amplified by a return of Egyptian workers from
Libya.
* Following recent tensions at the border between Israel and Egypt and the attack of the Israeli Embassy in Cairo, the relation between the two
ENERGY OUTLOOK
Electricity matrix
(installed capacity 2009)
Hydro
11%
Electricity
(Source: Enerdata)
Capacity (2009)
25.3 GW
Production (2009)
137 TWh
Consumption (2009)
117 TWh
Wind 2%
Oil
12%
Natural gas
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
Gas
75%
59 TCF
1705 BCF
1108 BCF
Electricity
* Egypt’s total installed power generation capacity is of 25.3 GW (end of 2009), 86% of are thermal facilities (mainly gas-fired). The Egypt is
interconnected with: Jordan, Libya, Syria and Turkey, Lebanon and there are talks with Saudi Arabia. With the latter interconnection is to be built and
enter into service in full capacity by 2015. The two 5-year plans aim to increase the country's installed capacity : 19 GW of new capacity should be
added by 2016. The country is seeking to attract 110 bn USD in investments in its energy sector by 2027.
* A new energy strategy until 2030 aiming to liberalise the energy sector is being prepared to frame the necessary reforms electricity, gas and
petroleum sectors. The reforms would include the establishment of a gas and oil regulator. Egypt pursued studies to assess potential use of
domestic oil shale and uranium reserves. The National Energy Strategy, that includes rationalization of energy consumption, improving its efficiency
and maximizing utilization of new and renewable energy sources. IPPs have been emerging in Egypt since the last 10 years mainly under BOOT
schemes.
* Egypt targets to supply 20% of domestic demand of power from renewables sources by 2020: 12% wind and remaining 8% hydro and solar. The
country has wind farms at Zafarana and Hurghada with installed capacity of 430 MW. The objective set up for 2020 is 7200 MW. Egypt signed a deal
with Abu Dhabi's Masdar to build another 200 MW wind farm on Red Sea coast.
* Egypt plans to develop its first nuclear power plant in Egypt (1000 MW) at El-Dabaa, 160 km west of Alexandria and has launched tenders for
construction in March 2011. Three other nuclear power plants of lower capacity (600 MW) are also planned, in the frame of a programme
supervised by IAEA. The 1st plant will be operational in 2019 and the 4th plant in 2025. A cooperation MoU with Russia was signed in 2008 giving
Russia the right to bid for contracts to build nuclear power stations.
Oil & Gas
* Egypt has significant resources of hydrocarbons: 500 Mt of oil reserves and 2200 Gm3 of natural gas reserves (and 3000 Gm3 of probable). The oil
production, 70% of which are concentrated in the Gulf of Suez, has been decreasing since mid 90' and in 2009 Egypt became a net oil importer. The
commercial gas production has been increasing since 90' thanks to offshore gaz E&P projects. In 2009 Egypt produced 62 Gm3 of gas (against 8
Gm3 in 90').
* In 2009, Egypt produced 64 Gm3 of natural gas and exported 19 Gm3 of it including 13 Gm3 of LNG. Egypt exports LNG since 2005 thanks to two
liquefaction plants: Idku and Damietta. The exports of LNG go mainly towards USA (35%), Spain (32%) and France (13%).The exports of natural gas
is likely to decrease in the coming years to supply fast-growing domestic demand (+ 10% in power generation and industrial sectors). Egypt now has
export agreements with Israel, Syria, Jordan, and Lebanon. Egypt continues to focus on raising its own gas availability through improved price terms
and frequent licensing, but the review of import options recognises that this is unlikely to cover mid- and long-term needs.
* The Arab Gas Pipeline (AGP) currently connects Egypt to Jordan and Syria. AGP's Jordan-Syria section completed in 2008 will allow Egypt to
increase its export capacities through this pipeline to 77.3 bcf by 2013. The Turkish-Syria agreement signed in 2008 to connnect the pipeline to the
Turkish grid in 2011 opens opportunity to export gas to Europe.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Waste
99
(Source: Unstat 2007)
Municipal waste collection (mt)
N/A
Access to sanitation (%)
94
Municipal waste ladnfilled
N/A
Water: * 95 % of water used in Egypt comes from the Nile, which is bordered by 10 States. Egypt's quota is of 55.5 Bn m3 of water/year.
With 95 million inhabitants by 2025, the annual amount of fresh water per person would be less than 600m3. Water policy in “National
Water Resources Plan 2007 - 2017 ” is based on a strategy called “Facing Challenges”.
* Egypt's future water strategy includes upgrading water resources and nurturing closer ties with all Nile Basin countries - Burundi, the
Democratic Republic of Congo (DRC), Ethiopia, which provides 85% of Egypt's 55.5 billion m3 of water, Kenya, Rwanda, Tanzania and
Uganda.
* 914 operating drinking water plants produce about 25 Ms m3/day, covering 100% of all cities and towns and 98% of villages in 2008. In
addition, 21 seawater desalination concentrated in coastal areas represent a production capacity of about 60,380 m3/ day. The Egyptian
Fund for Technical Cooperation with Africa will provide upstream countries with LE100 million for development projects, training
programmes and the construction of wells.
* A renewed PPP law aims to speed up the government's programme to improve Egypt's infrastructures, including wastewater treatment.
Private sector participation is emerging, notably through BOOT and DBO contracts. Water pricing is regulated by the Central Authority for
the Drinking Water and Sanitation Sector and Protection of the Consumer and the Egyptian Water Regulation Authority (EWRA).
Waste: * The National Solid Waste Management (SWM) Strategy 2000 reinforces the roles of governorates in services delivery and gives
support to private sector participation. Private sector participation in SWM is being promoted through the garbage collectors, national
private operators, and international firms. To date, the private sector is involved in Alexandria, Cairo district, Giza urban districts I and II,
Suez and Aswan. Contract durations range from 10 to 15 years. Annual public SWM expenditure for 2003 –2008 has been estimated at
US$182 million. Egypt generates 14.9 million tons per year of solid municipal waste with a 3.2% growth rate per year. In urban areas, 30 to
95% of municipal solid waste is collected of which 88% are open dumped and only 2% recycled.
Last update: Septembre 2011
IRAQ
POLITICAL BACKGROUND
Type of government: Federal Constitutional Republic
Head of State: Jalal Talabani (since April 2005)
Prime Minister: Nouri Kamel al-Maliki
Key Ministers: Minister of Oil : Abul Kareem AL-LUAIBI
Minister of Industry and Minerals: Ahmad Nasser DALLY
Minister of Water Resources: Mohaned al-Saadi
Minister of Electricity : Raad SHALLAL
Parliament: Council of Representatives with 325 seats
Elected in March 2010
Next poll in March 2014
COUNTRY RISK
N/A
Standard & Poor's
Country vs. World Median
(Five-year risk aggregates)
N/A
Moody's
D
E
COFACE
B
SECURITY RISK
Control Risks 2010
Economic and political environment are
very uncertain and the business context
may be really difficult. This fragile
situation may severely affect payment
behaviour. Corporate default risk is very
high.
45
40
35
30
25
20
15
10
5
0
Extreme
Overall
Financial
Iraq
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
32 Urban population (2015 p)
126 HDI ranking
Exchange rate (IQD/USD): 1 169.50 (09/2011)
66.8%
N/A
* GDP growth should continue to run at a strong pace in the near term as the government, which has been the linchpin of post-war
reconstruction, lifts capital spending in 2011 after a mild setback last year, initiates a number of reform programmes, and most importantly,
allows international oil companies to dig into Iraqi soil for the first time in 35 years. The economy will also benefit from greater business
activity and consumer spending owed to the improved security conditions. The rebound in global oil prices will help narrow the planned
fiscal deficit for this year and, moreover, inflate Iraq's headline external surpluses.
* Security will remain a paramount concern for the overall outlook for the economy, particularly for potential investors, as Iraq remains a
dangerous and volatile place for capital flows.
Real GDP Growth (%) change from a year earlier
CPI Inflation (%) change from a year earlier
12
11,8
12
10
8,3
10
8
4,2
5,0
6
5,1
4,0
4
4
8,7
6,8
8
5,5
6
4,4
4,4
2,5
5,2
5,9
2
2
0
2,8
0,7
0
-2
2009
Iraq
2010
2011 f
2012 f
2009
2010
2011 f
2012 f
-4
Iraq
Middle East
Current Account Balance (% of GDP)
Middle East
Interest rates (%)
16
30
14
25
19,6
12
20
15,0
10
15
8,7
10
4,0
12,1
14,7
6
5,0
5
4
1,0
0
-5
8
Short-term interest rate
2
2009
2010
Iraq
2011 f
2012 f
0
Middle East
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
2010
2011 f
2012 f
16
External debt (% GDP)
80,0
70,0
12
60,0
6,7
8
4
3,4
1,7
1,9
0
-4
6,2
5,7
4,6
50,0
42,8
40,0
33
26
30,0
21,4
-1,7
20,0
-8
10,0
-12
2009
Iraq
Midddle East
2010
2011 f
2012 f
Last update: Septembre 2011
POLITICAL OUTLOOK
* Iraq's prime minister, Nuri al-Maliki, faces tough choices in the remaining months of 2011. Key on his agenda will be to agree with Iraq's
political parties on the possible extension of US troops' end-2011 withdrawal date. The issue threatens to affect the composition of his
coalition government, with the Sadrist Trend fervently refusing to accept such an outcome. At the same time as this big decision looms,
Maliki is seeking to implement reforms—such as the reduction of the size of the government approved by parliament in July—and battle
corruption. A big corruption scandal revealed in August surrounding the electricity ministry could delay much needed work on electricity
infrastructure as several big recently signed contracts with foreign firms have come under scrutiny.
* After years of incessant turmoil and staggering daily death tolls, Iraq's stability trend has continued on a relatively consistent positive path
over the past couple of years. Violence levels in 2008–11 have for the most part been at their lowest since the start of the US-led invasion
in 2003. Nevertheless, the situation remains fragile and vulnerable to political developments as seen by the continued occurrence of
sporadic mass-attacks in key cities and the violence since the March elections.
* Kurdish/Arab tensions over Northern Iraq are still important. At the root of the conflict are questions pertaining to Iraq's future political
structure, the sharing of wealth and power, and an underlying sense of distrust between the central government and the Kurdish north. For
now an outbreak of violence is not imminent. However, the conflict is a looming issue which the two sides will eventually need to resolve in
order for Iraq to continue its normalisation process.
ENERGY OUTLOOK
Electricity
(Source: IEA)
Capacity (2009)
Production (2009)
Consumption (2009)
Hydro
36%
Oil 64%
Natural gas
Electricity matrix
(installed capacity)
in 2009
7.3 GW
46.1 TWh
33.2 TWh
(Source: IEA / OPEC)
Proven reserves (2010)
Production (2010)
Consumption (2010)
3 168 BCM
1.3 BCM
1.25 BCM
Electricity
* The electricity sector is managed by the Ministry of Electricity (MoE) through several regional production and distribution companies.
Recently, the MoE was faced with a corruption scandal revealed to the public, concerning fraudulent deals with foreign companies.
* The country's installed capacity was 7.3 GW in 2009. Iraq only satisfies about 50% of electricity demand, because of outdated
infrastructure and attacks against these facilities. Electricity is delivered to the population only 8 to 14 hours per day. Iraq intends to
double its installed capacity in the coming years, through significant investments. The country has bought 56 turbines from GE to increase
its production capacity by 7 GW, and signed a contract with Siemens to purchase 16 gas turbines for a total capacity of 3.15 GW.
* Iraq imports about 1.8 TWh of electricity from Iran.
* In January 2010, Iraq and the European Union signed a memorandum of understanding on a "Strategic Energy Partnership" which
provides a political framework to strenghten energy relations between both entities. The Memorandum outlines the following areas of
cooperation: development of an energy policy fo Iraq, energy security of supplies between Iraq and the EU, renewable energy and energy
efficiency measures.
Oil
* The Ministry of Oil manages the oil sector through several public companies.
* Iraq's proven oil reserves are the 3rd largest in the world, estimated at 15.6 billion tons, most of them situated in the Eastern part of the
country. Iraq hold nine "super giant" oil fields (over 5 billion barrels) and 22 "giant" fields (over one billion barrels). There are 11 refineries
in the country, of a total capacity of 800,000 b/cd.
* Iraq's oil production is increasing, reaching 2.36 million barrels/day in 2010. Oil production is expected to strongly grow in the coming
years, to reach 5 - 6 million barrels/day (a previous objectif to reach 12 Ms b/d is now considered unrealistic). Several investments and
projects are under consideration. North Oil Company intends to increase its production from Kirkuk oil field and a project to increase
production from Bai Hassan field has also been launched, for a total of 150 million USD.
* About 80% of the oil produced in Iraq is exported, mainly to North America, Europe and the Pacific area.
Gas
* 2 public regional companies manage the gas sector, under the Ministry of Oil's control, and are responsible for gas production : North
Gas Company and South Gas Company.
* Iraq's gas reserves amount to 3168 bcm. Gas production reached 1.3 bcm in 2010. The Ministry of Oil reported that approximately 60%
of associated natural gas production is flared due to a lack of sufficient infrastructure to utilize it for consumption and export.
* The government approved the construction of a gas pipeline and a plant to exploit the associated natural gas of Bassora fields. The
agreement aims to use 7.3 Gm³/year of gas, currently flared. Iraq and Russia agreed for 2 pipeline projects, of which the Kirkuk-Baniyas
pipeline.
* Iraq has discussed northern export routes through Turkey, including linking up to the Azeri-Turkish Baku-Tbilisi-Erzerum (BTE) line, the
planned Nabucco pipeline, and the ongoing Arab Gas Pipeline (AGP) project.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
73
79
Municipal waste collection (mt)
Municipal waste landfilled
N/A
N/A
Water: * Iraq faces severe water shortages, due to a rising population, depletion of resources, lack of rainfall, drought and advancing
desertification. According to the Government, Iraq needs to spend more than 1 billion USD/year in the coming years to develop its water
sector and satisfy growing demand. Iraq has already spent 1 billion USD/year since 2007 for water projects with funding from the
government as well as loans from agencies in Japan, Italy and the World Bank.
* The waters of Tigris and Euphrates rivers are a cause of dispute between Turkey, Syria and Iraq. Turkish exploitations of the rivers
causes a depletion of their flows to very low levels. No sustainable solution was found yet.
Waste: * Waste management services have seen years of underdevelopment and deterioration. In response, a National Solid Waste
Management Plan (NSWMP) for Iraq was developed several years ago, to plan for the strategic development of all aspects of waste
management in the country over the coming 20 years. The NSWMP focuses on policy development and integrated planning regarding
regulatory framework, economic aspects and institutional capacity.
Last update: September 2011
JORDAN
POLITICAL BACKGROUND
Type of government: Constitutional monarchy
Head of State: King Abdullah II bin al-Hussein (came into power on Feb 7th 1999)
Prime Minister: Marouf BAKHIT (since February 2011)
Key Ministers: Minister of Energy and Mineral Resources: Khaled TOUKAN
Minister of Water and Irrigation: Mohammad Najjar
Parliament: Chamber of Deputies (120 seats) - Senate (55 seats)
Elected in noember 2010
Next poll in November 2014
COUNTRY RISK
Less vulnerable in the near-term but faces major
ongoing uncertainties.
BB
Standard & Poor's
No clear and present repayment concern in a
context of potentially severe economic, financial or
political shocks.
Political and economic uncertainties and an
occasionnaly difficult business environment can
affect corporate payment behaviour. Corporate
default probability is high.
Ba2
Moody's
B
COFACE
SECURITY RISK
Control Risks 2010
B
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
L
Low
Overall
Financial
Jordan
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
6.47 Urban population (2015 p)
27 HDI ranking
81.1%
82/169
Exchange rate (JOD/USD): 0.707 (09/2011)
* Political uncertainties and a weaker security environment this year will soften domestic demand, increase lending standards, deter foreign
investment and, ultimately, bog down economic growth. Fiscal policy will be tight in the short term as authorities look to rein in the public debt and
wean the country from foreign aid. Moreover, back-pedaling on market liberalization—which has come in response to ongoing protests—will weigh on
capital spending initiatives, forcing authorities to shelve development projects to make way for more subsidy spending.
* Weak investor confidence in the Middle East, cautious lending behaviour in the banking sector, and a government fixed on extending social welfare
programs and subsidies, rather than pushing development projects, will prevent Jordan's economy from moving back onto its medium-term growth
path.
* Real GDP growth is expected to reach 2,7% this year, up slightly from 2.3% in 2010.
* Iraq's post-war economic rejuvenation will raise demand for Jordanian exports in 2011.
Real GDP Growth (%)
6
CPI Inflation (%)
5,5
5,5
10
5,1
5
8,7
8
4
4,0
6,8
6
4,1
4,4
2,7
3
2,3
4
2
4,8
4,4
4,7
2011f
2012f
5,0
2
1
0
0,7
0
-0,7
2009
2009
2010
2011f
Jordan
2012f
2010
-2
Middle East
Jordan
Current Account Balance (% of GDP)
Middle East
Interest rates (%)
20
10
15
14,7
8,7
10
12,1
9
4,0
5
0
2009
2010
-4,7
-5
-4,9
2011f
2012f
-8,1
-7,7
-10
8
Short-term interest rate
-15
7
Jordan
Middle East
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2009
8
6
4
2
0
-2
-4
-6
-8
-10
-12
2010
2011f
External debt (% GDP)
2012f
30,0
6,2
4,6
1,7
29
29,0
28,0
27,0
26,6
26,4
26,0
-1,7
-4,7
-5,6
-6,8
-8,6
25,3
25,0
24,0
23,0
Jordan
Middle East
2009
2010
2011f
2012f
Last update: September 2011
POLITICAL OUTLOOK
* King Abdullah II promised in June to institute constitutional reforms that would his own powers, including removing his right to appoint the
government. Under the suggested reforms, cabinet would be formed from a parliamentary majority. The pledges have been met with scepticism by the
opposition who will not be convinced that reforms will really take place until a transparent timeframe is put in place. In the meantime, Jordan will
probably continue to face sporadic protests and the government will continue to come under strain from the opposition. Saudi Arabia granted $400
million to support Jordan’s economy and ease its budget deficit.
* Jordan’s entrenched political, economic and military relations with the US remain a cornerstone of the kingdom’s foreign policy. Public frustration at
the ongoing plight of the Palestinians (especially in Gaza) is high and offers a platform for the mobilisation of wider social discontent, with the potential
to destabilise the government's programme.
* Jordan has been invited to apply for membership in the GCC.
ENERGY OUTLOOK
Hydro
0.4%
Oil
57%
Wind &
Geothermic
3%
Biomass
5%
Electricity matrix
(installed capacity)
in 2008
Electricity
(Source: Enerdata)
Capacity (2008)
2.9 GW
Production (2008)
Consumption (2008)
Natural gas
13.8 TWh
11.8 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
Gas
35%
0.2 TCF
8.8 BCF
104.9 BCF
* The Ministry of Energy and Mineral Resources (MEMR) coordinates the energy sector. The Jordanian energy policy aims to reduce the cost of the
country's energy supply and to decrease its dependence towards imported oil (around 95%). The government's strategy lies on 5 main axes: the
intensification of hydrocarbons exploration, modernization and privatization of energy companies, promotion of energy control, diversification of energy
supplies (mainly to natural gas) and promotion of solar and wind energies. The Strategy of Energy Sector 2007-2020 seeks to achieve energy supply
security and diminish dependence on external energy sources by using national resources. The purpose of the strategy is inter alia to develop a plan
and a timeline program to promote alternative energy solutions and to identify technical, financial and legislative requirements to implement renewable
energy solutions. In 2020, Jordan shall meet 29% of its energy needs from natural gas, 14% from oil shale, 10% from renewable energies and 6%
from nuclear energy.
* According to the MEMR, the energy demand will rise steadily, at about 5.5%/year between 2008 and 2020. To meet this increasing demand, the
government will have to invest 18 billion USD in the energy sector by 2020.
* The only Jordanian oil field was closed in 1992. Jordan thus imports all the oil it consumes. The country's only refinery is exploited by Jordan
Petroleum Refinery Company (JPRC) (100% public).
* The country has important oil shale reserves (3rd biggest in the world). The government intends to develop several projects using oil shale. In April
2008, it signed an agreement with Eesti Energia to build the first shale-based power plant, with a capacity of 600-900 MW.
Electricity
* The electricity sector is structured around a main producer, CEGCO, and 3 distributors, JEPCO, IDECO and EDCO. CEGCO holds an installed
capacity of 1,750 MW, and produced about 9 TWh in 2008. NEPCO is responsible for electricity transport, the development of the network and for the
interconnections with neighboring countries.
* The deregulation of the electricity sector was launched in 1997. An Independent Regulatory Commission was created in 2001 to supervise the
sector. In 2007, the government sold 51% of CEGCO, the national power production company, to ENARA Energy Arabia.
* A first independent power plant, Amman East Power Project, was built by AES Jordan PSC (60% AES Oasis Ltd, 40% Mitsui & co) through a BOO
contract, for a total cost of 300 million USD. This 370-MW plant was commissioned in September 2009.
* The country's totalled installed capacity was 2.9 GW in 2008. Electricity production tripled since 1990. To face an increasing demand (6%/year by
2020), the government plans to increase the country's installed capacity to 4 GW by 2020.
* Jordan's electricity network was connected to the Egyptian network in 1999 and to Syria in 2001. NEPCO continues to develop interconnections: the
construction of a new transport line from Syria allowed to double imports capacity to 600 MW in 2008, an undersea cable was set up to supply
electricity from Egypt, and a new electricity transport line with Irak was created.
* A law has been adopted in 2007 to increase renewable energy's share in the total consumption to 3% in 2015 and 10% in 2020. Wind installed
capacity should reach 600-1,000 MW in 2020. Solar capacity is expected to reach 300-600 MW in 2020.
* Jordan should get its first nuclear reactor by 2015-2017. It signed a technical assistance contract with Japan. The country's uranium reserves are
about 80,000 tons. In February 2010, an agreement was signed with AREVA to exploit these reserves.
Gas
* Jordan's gas reserves are about 5 Gm³. Gas production, which began in 1989 in Risha gas field, is very low, reaching 0.2 Gm³ in 2008.
* Jordan imports gas from Egypt through the Arab Gas Pipeline (2.3 Gm³ in 2008). An agreement with Egypt was approved in January 2010 for the
additional supply of 550 million m³.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2010)
Access to drinking water (%)
Access to sanitation (%)
Waste
96
98
(Source: Unstat 2007)
Municipal waste collection (mt)
Municipal waste landfilled
N/A
N/A
Water: * Jordan's share of water per capita is within the lowest in the world, with 145 m³/capita in 2008, and is constantly deacreasing (224 m³/capita
in 1990), while the international water poverty line is 1,000 m³/capita/year. Water deficit was about 638 million m³ in 2007.
* The region's water resources are depleting. The Jordan River now has large sections reduced to a trickle. The Sea of Galilee is at its lowest point
ever. The surface area of the Dead Sea has shrunk by a third. Since the 1960s, Israel's water authority has been pumping about 300-400 million m³
out of the Galilee Sea every year. Syrian and Jordanian authorities have similarly plundered the Jordan River.
* Jordan adopted a new water strategy, "Water for Life: Jordan's Water Strategy 2008-2022", which seeks to achieve a set of objectives : the
provision of sufficient and safe drinking water, maximising the benefits of surface water, and stopping the arbitrary pumping from underground wells. It
plans to increase the share of desalinated water in the country's supply from 1% in 2009 to 31% in 2022.
* In 2007 was launched the Red Sea-Dead Sea canal project.It consists in transporting, via a 200-km canal, around 2 billion m³ of water per year with
the aim of restoring the water level of the Dead Sea. It also provides for drinking water production and electricity generation.
Waste: * Jordan generates a total of about 1.7 million tons of waste a year. Average waste generation per capita is 0.9 kg/day. Most waste is
disposed in the country's 21 landfills. Waste management is undertaken primarily by the public sector.* The government intends to improve waste
management, reduce the amount of waste generated and improve landfill sites to reduce their impact on environment. It considers to reduce the
number of lanfills to 3.
Last update: Sept 2011
KUWAIT
POLITICAL BACKGROUND
Type of government: Constitutional Monarchy
Head of State: Emir Sheikh Sabah al-Ahmed al-Jabr al-Sabah (since 2006), chosen from the Al Sabah family.
Prime Minister: Sheikh Nasser Mohammed al-Ahmed al-Sabah (since 2006)
Key Ministers: Minister of Oil: Mohammad AL-BASEERI
Minister of Electricity and Water: Salem Al-Othaina
Parliament: National Assembly (50 seats)
Elected in May 2009
Next poll in May 2013
COUNTRY RISK
AA-/Stable/A-1+
Standard & Poor's
Country vs. World Median
High grade
The political and economic situation is
good. Business environment nonetheless
A2
COFACE
leaves room for improvement. Corporate
default probability is low on average.
SECURITY RISK
B
Control Risks 2010
L
Low
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Overall
Financial
Kuwait
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Exchange rate (KWD/USD): 0.27 (09/2011)
Population (Million)
3 Urban population (2015 p)
96.9%
Nominal GDP (Bn USD)
124 HDI ranking
47/169
* Strengthening global demand and pan-Arabic political turmoil are pushing up oil prices in 2011, while the conflict in Libya is forcing OPEC
members to rachet-up output to cover the lost market-supply. The combined effect will lead to ballooning export revenues for Kuwait and,
moreover, higher fiscal and current-account surpluses this year. The windfall oil revenues can be subsequently used to maintain fiscal
expansionary policy or they can be invested abroad through the emirate's sovereign wealth fund. Either way, the optimistic oil-market
dynamics in our current outlook will continue to support Kuwait's economy through the near and long term.
* The fiscal injections into the economy should yield strong demand in the real sector, improve investor sentiment, and help the financial
sector regain confidence in the safety and profitability of its investment in Kuwait’s real sector.
CPI Inflation (%)
Real GDP Growth (%)
14
7
6
5,5
5,5
5
12
4,0
4
10
5,1
4,7
3
2
8,7
8
0,7
2,7
1
6
0
6,8
4
-1
4,4
4,4
2009
-2
2010
2011 f
2012 f
-1,3
2
5,0
4,0
5,3
2011 f
2012 f
4,0
0
-3
2009
Kuwait
Middle East
2010
Kuwait
Current Account Balance (% of GDP)
Middle East
Interest rates (%)
9
50
8
40
7
39,4
30
35,4
29,6
20
14,7
24,3
8,7
10
6
5
12,1
4
4,0
3
0
-10
2009
2010
2011 f
2012 f
2
Short-term interest rate
1
0
Kuwait
2009
Middle East
Fiscal balance (% of GDP)
2010
25
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
60,0
22,9
21,1
20
16,3
14,8
55
49,5
50,0
44,6
15
40,1
40,0
10
6,2
5
1,7
4,6
30,0
0
-5
20,0
-1,7
Kuwait
Middle East
2009
2010
2011 f
2012 f
Last update: Sept 2011
POLITICAL OUTLOOK
* A new Kuwaiti government was appointed on 8 May, with Prime Minister Sheikh Nasser al-Sabah retained. The previous government had
resigned on 31 March following mounting pressure from lawmakers and requests to question three ministers over various allegations. The
appointment coincides with regional turmoil and raised sectarian tensions at home and abroad and has failed to appease the government's
critics, with opposition groups continuing to call for the resignation of Sheikh Nasser.
* The Kuwaiti leadership is concerned about regional turmoil, particularly the high sectarian tensions in Bahrain. Calls by opposition
elements in Bahrain for the overthrow of the monarchy there, has been worrying for Kuwait's leadership as well as other Gulf states. The
leadership can be expected to tread carefully to avoid igniting serious protests at home.
* Kuwait remains a valuable and strategic ally to the US, and the government remains highly supportive of ongoing security relations and
anti-terrorism co-operation.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
11.3 GW
Gas
21%
Oil 79%
Production (2009)
Consumption (2009)
Electricity matrix
(installed capacity)
in 2009
Natural gas
60.1 TWh
44.5 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
63,0 TCF
448,5 BCF
448,5 BCF
* Kuwait's energy policy aims to maintain its position as a major oil producer, while developing refining and petrochemical industry. The
2001 Foreign Direct Investment Act intends to encourage foreign investments by facilitating the access to energy activities and protecting
the companies from future nationalisations. However, the Constitution prohibits foreign companies to hold the country's resources.
* Oil covers 65% of the energy needs, against 35% for gas.
Electricity
* The electricity sector is controled by the Minister for Electricity and Water (MEW).
* Kuwait holds 7 mixed oil and gas power plants, for a total installed capacity of 11.3 GW (in 2009), and a total production of 60 Twh.
* The Kuwait government faces a strongly growing electricity demand (+7%/year). In order to meet the demand, the government intends to
increase its installed electric capacity to 16 GW by 2012. A power plant is to be built in Al-Zour North, for a capacity of 1,500 MW in 2015,
followed by three other phases to increase capacity by 1,500 MW, 800 MW and 900 MW respectively. Bids for this project have been
submitted and seven firms have been prequalified. Kuwait is considering the construction of two solar plants. A commission to evaluate the
nuclear energy development is to be created soon.
* Kuwait takes part in the interconnection of the electricity grids of the six GCC countries (Kuwait, Saudi Arabia, Bahrain, Qatar, UAE and
Oman). The interconnection with Saudi Arabia, Bahrain and Qatar, GCC North Grid, was commissioned in 2009.
Oil
* Kuwait Petroleum Company (KPC) is the only oil company in Kuwait. It holds 6 subsidiaries, each responsible for an area of the oil sector.
Kuwait Oil Company (KOC) manages the exploration, production and transport activities, Kuwait Drilling Company supervises the drilling
activities and Kuwait National Petroleum Company (KNPC) manages oil refining and distribution. The oil sector represents 94% of the
State revenues.
*Kuwait holds the world's fifth largest oil reserves, with over 14 billion tons (over 100 billion barrels, 8% of the world reserves). Most of the
reserves are located in the Burgan field, the second world largest oil field.
* The country 's oil production reached 2,312 Ms b/d in 2010. Kuwait exports 60% of its production to Asia (Japan, India, South Korea,
Thailand), and the remainder to Europe and the US. There are 3 refineries in Kuwait, for a total capacity of 936,000 barrels/day.
* The Kuwait authorities plan to invest 87 billion USD in the oil sector by 2030, in order to increase the production capacity from 2.7 million
barrels/day (Mbl/day) to 3.5 Mbl/day in 2015 and 4 Mbl/day in 2030. The exports capacity is planned to increase to 4.2 Mbl/day in the
coming years, thanks to new storage facilities.
* The "Kuwait project", which aims to double production from the Northern oil fields to 900,000 barrels/day, has been delayed several times,
due to a strong local opposition to the entry of foreign companies in the oil production sector. However, the country intends to develop the
Southern oil fields to increase their production capacity. Nevertheless, a bill project aiming to limit annual oil production to 1% of the
country's reserves is being discussed since 2008.
* The authorities are considering to extend the refining capacities: 2.5 billion USD should be allocated to the modernization of 2 of the 3
existing refineries, and 12 billion USD to the construction of a new refinery in Al-Zour (615,000 barrels/day capacity).
Gas
* KPC and its subsidiaries are also responsible for the gas sector.
* Kuwait's gas reserves amounted to 1,780 Gm³ in 2009. The country has a low gas production, which reached 12 Gm³ in 2009. Important
gas reserves (1000 Gm³) have been discovered in 2006 in the North of the country which should allow Kuwait to increase its production to
17 million m³ in 2011, 28 million m³ in 2015 and 41 million m³ in 2020. The Dorra offshore field exploitation requires an agreement on the
territorial borders, between Iran, Saudi Arabia and Kuwait.
* Kuwait imports liquefied natural gas (LNG) since late 2009: 0.9 Gm³ have been imported, mainly from Russia and Trinidad. The country
has signed agreements to import gas from Iraq, Iran and LNG from Qatar.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
99
100
(Source: Unstat 2007)
Municipal waste collection (mt)
Municipal waste landiflled
N/A
N/A
Water: * Kuwait has been one of the first countries to develop desalination technologies, which enabled the country to cope with
demographic growth. Kuwait produces nearly all of its water from desalination plants.
* Kuwait's daily consumption of water per capita is among the highest in the world and the country faces severe risks of water shortage.
Kuwaitis consume almost more water than the country can produce: 1.5 million m³ of water is being consumed daily in Kuwait in 2010,
dangerously close to country’s maximum production capacity (1.51 million m³/day). The demand for water is strongly growing, due to the
rapid increase in the population as well as to changes in the consumption patterns of the population. The MEW plans to increase water
supplies by 150,000 m³/day, but this would not be sufficient to satisfy the growing needs.
Waste: * The current mis-management and poor disposal practices coupled with inefficient use of spare land are causing environmental,
economic, social and health damages. A number of investment opportunities are available in recycling activities.
* The 4th Kuwait Waste Management Conference & Exhibition will take place in Kuwait City in October 2011. It will present a platform to
explore latest technologies & products and find best practices to successfully manage waste in a cost effective and environmental friendly
manner. It will assemble leading industry players, waste management solution providers and consultants to address and discuss
challenges and strategies for waste minimization , collection, treatment, disposal and recycling.
Last update: Sept 2011
LEBANON
POLITICAL BACKGROUND
Type of government: Parliamentary democracy
Head of State: Michel Suleiman
Elected in May 2008
Next election in 2014
Key Ministers: Prime Minister: Mohammad Najib MIKATI
Minister of energy and water: Gebran BASSIL
Parliament: National Assembly with 128 members (14 March 71 seats; 8 March 30 seats; Change and reform 27)
Elected in June 2009
Next poll in 2013
COUNTRY RISK
B/Positive
Standard & Poor's
Country vs. World Median
Non investment grade
(Five-year risk aggregates)
One shock away from default, and/or material
concerns about willingness to pay.
B1
Moody's
A very uncertain political and economic outlook and
a business environment with many troublesome
weaknesses can have a significant impact on
corporate payment behaviour. Corporate default
probability is high.
C
COFACE
SECURITY RISK
Control Risks 2010
B
M
50
45
40
35
30
25
20
15
10
5
0
Overall
Medium
Financial
Lebanon
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
4 Urban population (2015 p)
90.1%
Exchange rate (LBP/USD): 1,50 (09/2011)
Nominal GDP (Bn USD)
39 HDI ranking
83/192 (2009)
* The economy will suffer from lower investor and consumer sentiment in the short-term outlook, with tourism and real estate activity
likely to suffer in 2011 as the political stalemate continues without any real solution in sight. That said, the strong capital inflows
accumulated over the last three years will provide Lebanon with a financial buffer against the ongoing political episode. That said,
Lebanon's buffers are limited and cannot be expected to protect the economy indefinitely; thus putting serious emphasis on the mediumterm economic outlook and the mounting risks Lebanon would face by delaying much-needed reforms.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
10
10
9
9
8
8
8,5
6
5,1
5
6,8
7
6,2
7
8,7
4
6
5
5,5
4,0
4,5
3,1
4,4
4,4
5,4
4
2
2
1
4,8
4,0
3
3
1,2
1
0,7
0
0
2009
2010
Lebanon
2011 f
Middle East
2009
2012 f
Current Account Balance (% of GDP)
20
2010
Lebanon
2011 f
2012 f
Middle East
Interest rates (%)
11
10
14,7
12,1
8,7
0
Short-term
interest rate
10
4,0
-10
9
-22,7
-20
-28,4
-20,7
-30
-23,6
8
-40
2009
2010
Lebanon
2009
2011 f
Fiscal balance (% of GDP)
2010
2012 f
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
9
90,0
6,2
4,6
6
80,0
70,0
1,7
3
7
Middle East
71,2
70,3
69,2
66,9
2009
2010
2011 f
2012 f
60,0
0
50,0
-3
-1,7
40,0
-6
-9
30,0
-8,5
-6,8
-7,5
-9,9
-12
Lebanon
Middle East
20,0
10,0
Last update: Sept 2011
POLITICAL OUTLOOK
* Prime Minister Najib Mikati finally formed his government on 13 June after months of intense political wrangling. The government is
dominated by Hizbollah and its pro-Syrian allies in the March 8 alliance. Hariri's pro-Western March 14 alliance refused to join. While the
formation of a new government is a positive step, ending the country's political stalemate, Mikati will nevertheless struggle to command
the respect of many Lebanese, especially Sunnis, who remain hugely suspicious of Hizbollah.
*Following the formation of Lebanon's new government, international attention will focus on how the government will relate to Syria and
what stance it will take on the indictments by the Special Tribunal for Lebanon (STL) which were issued in June, accusing four members
of Hizbollah of involvement in the assassination of former Prime Minister Rafiq Hariri in 2005.
* Lebanese-Syrian relations have been on the mend since the formation of a unity government in Lebanon in November 2009. However,
the current unrest in Syria might have harsh consequences on Lebanon's stability.
ENERGY OUTLOOK
Oil
80%
Electricity
(Source: Enerdata)
Capacity (2009)
2.5 GW
Hydro
20%
Production (2009)
Consumption (2009)
Natural gas
Electricity matrix
(installed capacity 2009)
10.8 TWh
10.1 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
0 TCF
0 BCF
0 BCF
Electricity
* Lebanon's installed capacity is 2.5 GW in 2009. 80% of the produced electricity comes from thermal sources that come from the two
thermal power plants located in Zouk and Jieh, the two combined-cycle power plants (diesel-oil) of Beddawi-Deir Ammar and Zahrani,
and two gas-fired power plants in Baalbeck an Tyr. Hydroelectrical resources account for 20% of electricity production (Kadicha plant,
Litani plant, Nahr Ibrahim plant and Bared plant). In order to meet the demand peaks, Lebanon also imports 455 GWh/year of electricity
from Syria. To cope with frequent power shortages, autoproduction has also been developed.
* Electricité du Liban (EDL) holds a monopoly for production, transport and distribution of electric energy. However, there are still
independent operators for the generation, transmission and distribution of electricity, that were given a concession by the state before the
decision of an EDL monopoly was taken. 3 production concessions still exist in El Bared river, Nahr Ibrahim and Kadisha. 4 distribution
concessions are located in the regions of Zahlé, Jbeil, Aley-Souk el Gharb, Bahmdoun and Kadisha. Finally, a transport concession on
the El Barel river is under operation.
* The sector is largely under developed and the level of investment is very low. Only 1.6 B$ were invested between 1992 and 2009.
* Electricity tariffs have to be approved by the Ministry of energy and water following recommendations of EDL. The tariff structure is
based on the oil price (25 USD/ barrel). These tariffs have not been revised since 1994.
* The country intends to install around 400 000 solar-based energy production units in the next 10 years. Wind energy capacity should
tripled up to 2020 to reach 60 MW.
* Lebanon has the will to reform the electricity industry and institutions in order to furnish 24 hours/day electricity by 2014, as currently
electricity is provided 18 hours per day. EDL would be restructured. The total investment is estimated at 4.82 B$, 1.5 financed by the
government, 2.3 by the private sector and the rest by international funds.
* In late September, the parliament approved a plan to increase electric power production capacity by 700 MW according to the
proposed reform in the electricity sector.
Gas
* In early 2009, Tamar 1, a 3000 m³ gas field, was found by the American company Noble Energy off Haifa in Israel. Lebanon is
particularly interested in this discovery, since the minister of Energy emphasized that a part of the field could be located in the territorial
waters of Lebanon.
* Egypt will supply 600 million cubic meters of natural gas a year to Lebanon via Syria. The agreement among the three countries will last
for 15 years and can be extended with the approval of Egypt, Lebanon and Syria 18 months before it ends.
* Lebanon is considering building a gas pipepline on the coastline and installing a GNL terminal to import gas from Algeria or Qatar.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
100
(Source: Unstat 2007)
Municipal waste collection (mt)
Municipal waste landfilled
1.4 million
N/A
Water:
* In mid-2007, the World Bank and the Kuwait Fund for Arab Economic Development (KFAED) decided to contribute around 40 M USD
(60 Bn LPB) towards Lebanon's Beka'a Emergency Water Supply Project. The main aim of the project is to alleviate the precarious
conditions of the area's water supply systems.
* In 2000 Lebanon began a process of water sector reform by adopting a new Water Law. Since 2005, 21 water authorities have been
merged to form 4 regional Water Establishments (WEs) under the Ministry of Energy and Water (MEW). Responsibility for wastewater
management was also transferred to the WEs but no additional resources were provided by the central authorities.
* The Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) is participating in the water sector reform launched by the libanese
government, for the period 2008-2011. The concept of the project is to upgrade the performance of the WEs through a programme of
performance benchmarking and capacity development, while helping the MEW to assume its regulatory role.
* Since 2003, Degrémont is managing 5 wastewater treatment plants in Lebanon, developed under DBO contracts. There are located in
Tripoli, Chekka, Batroun, Byblos and Zahlé.
Waste:
* Almost all of the municipal solid waste generated in Lebanon is collected by public or private haulers; however, management varies
from one area to another: 8% is recycled, 8% is composted, 46% is landfilled and 37% is disposed of in open dumps.
* The composition of lebanese solid waste is highly organic (63%) while the remaining (37%) is constituted of paper, cardboard, plastic,
glass, metals and others.
* The "Municipal investment projects in solid waste management" initiated in 2005 has resulted in the construction of 12 solid waste
facilities
* In Saida (45 km south of Beyrouth), the Jabal al-Zbeleh (mountain of garbage) is very problematic. This open dump is the final
destination of Saida and the surrounding municipalities' wastes. The mountain dates back to 1975, but went through a substantial growth
spurt in 1982, when Israel invaded Lebanon, and the ensuing destruction of the area around Saida fed the heap with debris. This dump
is very criticized since it is falling into the Mediterranean, and is thus an environmental threat.
Last update: Septembre 2011
LIBYA
POLITICAL BACKGROUND
Type of government: National Transitional Council (NTC)
Head of NTC: Mustafa Abdel Jalil (Tripoli/Benghazi)
Parliament: Constituent assembly should be elected within 8 months, and presidential and parliamentary elections within 20
months
Key Ministers: Minister of Energy : to be determined soon
Minister of Utilities : to be determined soon
COUNTRY RISK
Standard & Poor's
Moody's
Country vs. World Median
N/A
N/A
(Five-year risk aggregates)
80
70
A high-risk political and economic
situation and an often very difficult
business environment can have a very
significant impact on corporate payment
behaviour. Corporate default probability is
very high.
D
COFACE
B
SECURITY RISK
Control Risks 2010
60
50
40
30
20
10
0
Overall
E
Extremely risky
Financial
Libya
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2011)
Population (Million)
5,3 Urban population (f 2015)
83,8%
Exchange rate (LYD/USD): 1.20 (07/2011)
Nominal GDP (Bn USD)
29 HDI ranking
53/169
* The activity in 2011 will depend on the rapidity with which foreign oil companies, that manage a significant proportion of resources will
resume production. The recovery of oil exports (95% of exports) will also be conditional on the reopening of the main ports.
* A total of $15 billion would be freed out of Libyan assets frozen under sanctions. At the same time, the European Union has lifted
sanctions on Libyan ports, oil firms and banks.
* After a collapse of the country growth in 2011, a rapid increase of GDP is expected with important projects to be launched for the
reconstruction of the country and the return of foreigh workers.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
35
30
21,7
20
3,1
10
0
4,4
30
30,5
4,5
25
-0,7
3,9
-10
20
-3,9
-20
15
10,0
-30
6,5
10
-40
-52,0
-50
5
2,5
7,8
6,5
6,7
2,5
0
-60
2009
2010
2011
Libya
2009
2012
North Africa
2010
Libya
Current Account Balance (% of GDP)
2011
2012
North Africa
Interest rates (%)
40
29,4
30,7
2,5
1,0
1,7
2010
2011
2012
29,8
30
20
NO DATA
13,6
10
-0,8
0
2009
-10
Libya
North Africa
Fiscal balance (% of GDP)
2009
15
10
2010
2011
External debt (% GDP)
2012
2,5
11,6
2,1
7,1
2,0
5
1,4
1,5
0
-5
1,7
-2,9
-4,0
1,0
-6,9
-10
1,3
-5,2
-5,6
0,5
-15
-15,7
-20
Libya
North Africa
0,0
2009
2010
2011
2012
Last update: Septembre 2011
POLITICAL OUTLOOK
* The 42-year reign of M. Gadhafi collapsed on Sunday, 20 August as rebels swept into Tripoli and street celebrations were held in the
capital city. Even though Gadhafi has still not been arrested, the National Transitional Council would appear to be the official authority of
the country from now on. The collapse does not mean the end of political tension, as the civil war has deeply affected the country, and the
political transition is raising some uncertainty, such as the role of djihadistes in the future of the country.
* The rapid militarisation of Libyan society brought about by the conflict carries with it obvious dangers in the future.
* The TNC has been widely recognised as Libya's new governing authority, although parts of the country remain outside its control.
* Constituent assembly should be elected within 8 months, and presidential and parliamentary elections within 20 months
ENERGY OUTLOOK
Electricity (Source: Enerdata)
Capacity (2008)
6.6 GW
Production (2008)
28.9 TWh
Consumption (2008)
24.6 TWh
Oil 50%
Electricity matrix
(installed capacity)
in 2008
Gas
50%
Natural gas (Source: Enerdata)
Proven reserves (2008)
1540 Gm³
Production (2008)
17.1 Gm³
Consumption (2008)
2 Mtep
* Libya has Africa's biggest oil reserves, with 44 billion barrels. It is member of OPEC (Organization of the Petroleum Exporting Countries).
Libya’s oil production reached 1.79 million barrils/day in 2009, and the government aimed to increase output to 2 million barrils/day in
2010, a level last achieved back in the late 1970s before the Revolutionary Command Council (Lybia's executive authority) imposed tough
operating conditions on foreign oil companies.
* In March, oil production had fallen by 1m barrels/day from 1.6m b/d, according to the International Energy Agency. The Arabian Gulf Oil
Company (Agoco), which accounts for 25% of Libyan production capacity, decided to cut ties with the National Oil Corporation in Tripoli
and is continuing to operate independently in the east of the country.
* Oil represents 70% of the country's total energy consumption, whereas gas' share is 29%.
Electricity
* General Electric Company of Libya (GECOL) is the public national electricity company which controls electricity generation, transmission
and distribution. The Libyan electricity network is interconnected with the Egyptian and Tunisian networks.
* Total installed capacity was about 6.6 GW in 2008. GECOL holds 30 power plants in the country, running on gas or oil. New gas-fired
power plants are being built, primarily to maximize the volume of oil available for export.
* Electricity demand strongly grows, partly because the electricity sector is heavily subsidized. Under its 2008-2012 action plan, the Libyan
government plans to invest 11 billion USD to increase installed power capacity to 12 GW. 13 new plants were planned to be built by 2012,
for a total capacity of 6.6 GW. That would allow to meet the growing needs of the water desalination industry.
* The Renewable Energy Authority of Libya (founded in 2007) intends to reach a 10% share of renewables energies in installed capacity
by 2020, with additional generation capacity in wind (2000 MW) in solar (7000 MW), and photovoltaic (150 MW).
* Libya intends to develop nuclear power generation and sea water desalination nexus to meet the country’s increasing demand for
electricity and drinking water. In 2008, Russia and Libya signed a cooperation agreement on nuclear energy (for the design and
construction of reactors and their supplies in nuclear materials). Libya had signed cooperation agreements with France, Canada and
Ukraine in the nuclear sector, however they might be compromised given the current conflict.
Gas
* Libyan gas reserves are about 1,500 Gm³. Gas production is dominated by NOC (National Oil Company). Natural gas production has
strongly rosen since 2000, from 6 Gm³ to 17 Gm³ after the commissioning of the Greensteam pipeline (8 Gm³ capacity). EPSA-IV firstround concessions were due to expire in 2010, with no significant reserves found so far.
* About 60% of the gas produced in Libya is exported to Italy (10 Gm³ in 2007), and a small amount of LNG is exported to Spain since
1971 from LNG gaseification plant in Marsa-El-Brega. About half of the gas consumed in Libya is used for electricity production.
* Exports are mainly made through joint ventures. Western Libyan Gas Project (WLGP) is a 50/50 joint venture between NOC and ENI
which exports natural gas to Italy through Greenstream pipeline. Another NOC-ENI joint venture is the Arab Company for Oil a and Gas
Pipelines (ACOG), which supplies Egyptian and Libyan gas to Italy. However, the supply of gas from Libya to Italy through a
Mediterranean pipeline was cut end of February after the rebels manage to control the pipeline.
* NOC plans to build two new LNG plants with a capacity over 3 million tons/year.
* The gas sector development is a priority for the Libyan government. It embraces integrated projects, which include gas exploration,
development and processing. Major producing fields are Attahadi, Defa-Waha, Hatiba, Zelten. The NOC expects to increase gas
production up to 57 Gm³ by 2030. Large increase in Libya's gas exports to Europe were expected before the conflict started and Gazprom
and NOC signed a cooperation agreement to develop the gas sector in Libya.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2006)
Waste
(Source: Unstat 2007)
Access to drinking water (%)
72
Municipal waste collection (mt)
N/A
Access to sanitation (%)
97
Municipal waste landfilled
N/A
Water: * Libya faces a water supply deficit of 11 million m³/day by 2025 and an over-exploitation of groundwater resources. At present,
there are 27 water treatment plants (capacity 300,000 m³) which cover less than 1 % of the country's needs.
* Water sanitation is a key priority for the government. In 2009, Daewoo Motor Sales (South Korean), Impregilo Lidco (Italian), Hyflux
(Singapore) and Punj Lloyd (India) signed a contract to build drinking water, sewage water and storm water networks in Lybia.
* 11 desalination plants are currently being built in Libya. In 2009, Hyflux signed a MoU with General Desalination Company (Libyan
Ministry of Utilities) to jointly invest and develop two reverse-osmosis desalination plants.
* The Libyan government announced in June 2010 a 52 Bn USD plan for modernization and expansion of Libya's infrastructure, including
water infrastructure, mainly in large cities.
Waste: * Shâabiyates (local authorities) are responsible for the municipal waste collection and treatment activities, under the General
Authority of the Environment's control. Libya faces a significant increase in waste management problems, due to demographic growth and
changing consumption patterns. Although the waste collection & sorting industry is emerging, there is an obvious need in up-grading and
renewing of the equipments. Incineration makes however a breakthrough with the recent purchase by Tripoli Shâabiyate of 2 incinerators
to treat medical waste.
* A United Nations Development Programme for 2007-2009 allowed to set up a National Framework for Solid Waste Management and an
action plan for Hazardous Waste Disposal in Libya. This project aims to develop and implement appropriate, affordable and sustainable
waste management practices for Libya.
Last update: Septembre 2011
MOROCCO
POLITICAL BACKGROUND
Type of government: Kingdom of Morocco
Head of State: Mohammed VI (since 1999)
Key Ministers: Minister of Energy, Mines, Water and Environment: Amina Benkhadra
Parliament: Bicameral Congress: House of Representatives of Morocco (325 members) - Assembly of Councillors (270
members)
Elected in: September 2007
Next poll : 25 Novembre 2011
COUNTRY RISK
BBB-
Standard & Poor's
Non investment grade
Ba1
Moody's
A4
COFACE
SECURITY RISK
Control Risks 2010
B
Country vs. World Median
No clear and present repayment concern and
tangible adjustment capacity in a context of
potentially severe economic, financial or
political shocks.
A somewhat shaky economic outlook and a
relatively volatile business environment can
affect corporate payment behaviour.
Corporate default probability is still
acceptable on average.
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Low risk in general - Medium risk in
Western Sahara
L
Overall
Financial
Morocco
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2011)
Population (Million)
32,3 Urban population (2015 p)
64.8%
Exchange rate (MAD/USD): 7.85 (03/2011)
Nominal GDP (Bn USD)
106,4 HDI ranking
114/192
* The determining contribution of internal demand partly explains why growth should be sustained in 2011. Regional turmoil and unrest
has dampened tourist activity in Morocco. Additionally, the Moroccan economy faces dampened investment prospects and reduced
remittances, while higher commodity prices will be a drag on growth as well. IHS Global Insight has therefore trimmed down economic
growth for Morocco, with real GDP expected to rise by 3.4% in 2011, compared with the expected 4.8% prior to the regional unrest. GDP
growth is expected to pick up to 4.5% in 2012.
* Against this turbulent background, the economy continues to rely on the performances of the agricultural sector and consequently on
climatic fluctuations, despite increasing effort for diversification in the sectors with higher added value.
* Morocco is still seen as a good place to do business as the transition movement towards an effective parliamentary monarchy and a
more attractive economic system seems to progress.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
12
4,9
4,4
4,5 3,8
10
3,0
3,2
10,0
8
3,1
6,5
7,8
6
2009
2010
2011
2012
6,5
4
4,3
-3,9
2
1,9
0
1,0
1,0
2009
Morocco
North Africa
2010
Morocco
Current Account Balance (% of GDP)
2011
2012
North Africa
Interest rates (%)
7
20
15
Short-term interest rate
Long-term interest rate
6
10
2,5
5
1,7
1,0
-0,8
5
0
-5,9
-5
-4,5
-5,8
4
-6,8
-10
2009
2010
Morocco
2009
2011
Fiscal balance (% of GDP)
2010
2012
3
North Africa
2011
2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
External debt (% GDP)
2012
0
30,0
26
27,6
25,8
25,0
24
-2
20,0
-2,7
-2,9
-4
-4,0
15,0
-3,6
-5,0
-6
-6,0
-5,6
10,0
-5,2
5,0
0,0
-8
Morocco
North Africa
2009
2010
2011
2012
Last update: Septembre 2011
POLITICAL OUTLOOK
* King Mohammed VI has announced changes will be made to the kingdom's constitution aimed at improving democracy and the rule of
law. The reforms will limit the king's direct powers over parliament and government and create an independent judicial system.
* The new constitution was approved by 98 % on 1 July. Morocco has scheduled an early legislative election on 25 November. Following
the election, a prime minister will be chosen out off the leading party.
* Widespread poverty and high urban unemployment could lead to further protests, calling for increased government support and wage
rises. These developments will prompt further state investment in housing and infrastructure, in the energy sector, with a focus on
alternative energy sources to alleviate the country's dependence on imports.
* The bombing of a popular café in Marrakech on 28 April 2011 raised security concerns in Morocco.
* Morocco has been invited to apply for membership in the Gulf Cooperation Council,
* Algeria is due to supply natural gas to Morocco starting this September under the terms of an agreement recently signed between the
two countries. It is a major step for the political rapprochement of the two States. This initiative could also be a new step toward the
process of the Arab Maghreb Union.
ENERGY OUTLOOK
Hydro
24%
Electricity
(Source: Enerdata)
Capacity (2008)
5.4 GW
Coal
53%
Electricity matrix
(installaded capacity)
2008
Production (2008)
Consumption (2008)
Wind 2%
Natural gas
Gas
7%
Oil
14%
23.7 TWh
22.2 TWh
(Source: IEA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
0.05 TCF
2 BCF
20 BCF
* Morocco imports over 90% of the energy it consumes. Oil is imported from Russia (40%), Saudi Arabia (38%) and Iran (18%).
Approximatively 17% of the country's electricity consumption are imported from the neighbouring countries and the figure is likely to
increase in the future. The long term Energy Strategy of Morocco 2009 – 2030, presented by the Minister, aims to achieve 4 goals:
Security of supply and energy availability; overall access to energy; energy consumption management; environment protection. To
achieve these goals, Morocco will be implementing energy mix diversification projects, while promoting larger share of renewable energy
sources (42% of installed power generation capacity by 2020: 14% wind, 14% solar, 14% hydro) and energy efficiency (15% of energy
savings by 2020) and regional integration.
Electricity
* The total installed power generation capacity is 5.4 GW, mainly thermal (4 GW) and hydropower (1.3 GW). Morocco's state-owned
Office National d’Electricité (ONE) owns 5292 MW (in 2006) installed power generation capacities of the country: 5 thermal plants
(capacity 2385 MW), 6 gas fired (615 MW), 1 CHP and a wind farm (114 MW). Around 90% is generated thermally from imported coal
and oil, a proportion that has been reduced in recent years.The IPPs total installed capacity is 1400 MW: wind power (50 MW) and
thermal (1356 MW generated by Jorf Lasfar power plant). Morocco produced 23.7 TWh of electricity in 2008.
* On July 2, 2010, French and Moroccan Prime Ministers signed a bilateral framework agreement on civil nuclear industry development
which should create opportunities for commercial contracts (services, consultancy, etc).
* Morocco has a significant potential in renewable energy. By 2020, Renewable energy should represesent 42% of electrical installed
capacity. The national target is to reach 1200 MW installed wind capacity by 2012, develop 2000 MW of solar by 2020. A draft law on
energy efficiency and energy savings has been signed at the end of 2010. Morocco intends to achieve 15% energy savings by 2020
according to the national plan.
*Solar energy is also expected to play a strategic role in Morocco. The Moroccan Solar Plan announced in November 2009 targets to
reach 2000 MW solar installed capacity by 2020 (5 sites already identified: Ouarzazate, Ain Bni Mathar, Foum Al Oued, Boujdour and
Sebkhat Tah ).This plan represents a total investment of about 9 Bn U$.
Gas
* Morocco currently produces a mere 2 bcf/year of natural gas and hopes of significant gas strikes remain unfulfilled. The volume of
natural gas production is small in the Essaouira Basin and the Gharb Basin. Consequently, Morocco is the largest energy importer in
northern Africa. Still, The Moroccan Office of Hydrocarbons and Mining (ONHYM) is optimistic about finding additional reserves particularly offshore - following discoveries in neighboring Mauritania.
* Consumption of natural gas is expected to reach over 5bn m³ per year by 2020 (to satisfy 25% of the country's energy needs). Morocco
also has access to 600 M m³ per year of Algerian natural gas in lieu of transit fees from the Euro-Maghreb gas pipeline. Increasing
imports of Algerian gas would make Morocco over-dependent upon its eastern neighbour. The bilateral relations between them remain
difficult.
* Morocco is considering the potential construction of a 1 bn USD LNG regas terminal, with an initial capacity of 3 Gm3. The terminal
construction might start in 2012, while the capacity extension would be possible later on in 2016-2017.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2006)
Access to drinking water (%)
Access to sanitation (%)
Waste
100
85
(Source: Unstat 2007)
Municipal waste collection (mt)
Municipal waste landfilled
6500
98%
* Within the National Treaty on Environment and Sustainable Development released in April 2010, Moroccan Government will create several sites for
solid and liquid waste treatment as well for treatment and recycling of waste water (with an annual target of 260 million cubic meter).
Water: * Annual water availability is roughly 18 BCM/year, although this varies according to rainfall. Of this, around 2.1 BCM is designated for
drinking water and industrial needs, with the remainder used for irrigation. Water storage capacity in dams is scheduled to be increased to 40 BCM by
2020 through an extensive dam-building programme, begun in the 1960s, that calls for the building of two dams a year.
*
Demand for water is estimated to be expanding by 6% annually, and prices are being raised in a bid to rationalise water use, particularly for
agriculture. Increasingly, the management of water, wastewater and power systems is being contracted out to foreign companies. Moreover, the
World Bank and the Islamic Development Bank have both extended loans to the government to address water sanitation problems.
Waste: * Morocco produces 5 M tons/y of solid waste (0.8 kg/cap/day), of which 70% are collected, mainly in urban areas, and only 2% recycled.
16% of 1.6 M tons/y of solid industrial waste produced in the country are hazardous. In 2006 Morocco adopted its first national law on solid waste
management (Law 28 – 00), followed by a 5 Bn U$ worth National SWM Program (PNDM) 2007 – 2021. Amongst main objectives of the program is
to enable Morocco to collect up to 90% of produced waste by 2021and to equip all cities with sanitary landfills, close or rehabilitate 300 existing open
dumps while promoting solid waste sorting, recycling and valorization. The sector received from the national budget 40 M U$ in 2008 and 50 M U$ in
2009. Improving Governance of the sector and promoting sustainable financing (reform of local taxation and new revenues, SW fees, funds through
the carbon market, eco-tax…) are key challenges for Morocco.
Last update: Septembre 2011
OMAN
POLITICAL BACKGROUND
Type of government: Sultanate of Oman - Absolute Monarchy
Head of State: Qaboos bin Said al-Said
Enthroned in July 1970
Key Ministers: Minister of Oil and Gas: H.E.Dr.Mohammed bin Hamad al Rumhi
Minister of Environment and Climate Affairs: H.E. Mohammed bin Salim AL TOOBI
Minister of Regional Municipalities and Water Resources: M. Ahmed bin Abdullah AL SHUHI
Parliament: The Consultative Council (Majilis al-Shura) with 84 members
Elected in 2007
Next poll : Octobre 2011
COUNTRY RISK
A
High economic, financial or institutional strength
and no material medium-term repayment concern.
A3
Moody's
Strong capacity to meet financial commitments, but
somewhat susceptible to adverse economic
conditions and changes in circumstances.
A1
Standard & Poor's
Volatile political and economic environment can
affect corporate payment behaviour.Corporate
default probability is quite acceptable on average.
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
COFACE
SECURITY RISK
Control Risks 2010
15
10
5
0
B
L
Overall
Low
Financial
Oman
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
2.9 Urban population (2015 p)
55,9 HDI ranking
82.6%
56/169
Exchange rate (OMR/USD): 0.52 (09/2011)
* Economic growth is projected to slow in 2011 due to the ongoing political turmoil and its effects on investor and consumer confidence in Oman. Still,
economic trends remain positive.
* Ongoing political turmoil in Oman will be resolved or will dissipate to negligible levels within the next 12-months without any major damages to the
economy, including loss of hydrocarbon production. Local authorities will most likely provide concessions and offer promises of reforms to quell
citizens, using a USD10-billion emergency aid funds from the Gulf Cooperation Council to support these endeavours.
* Although the banking system is healthy and liquidity is optimal for financing the government's massive capital spending plans, the tight lending
standards coming off the global credit crunch are less than ideal, especially for the private sector. Lending conditions should remain modestly healthy
in 2011 with some improvement in credit conditions.
Real GDP Growth (%)
7
CPI Inflation (%)
10
5,8
6
5,5
4,8
8,7
8
5
6,8
5,1
6
4
4,0
3
2
1
4,0
4,4
1,1
2
3,5
3,6
0
2009
2010
Oman
2011f
Middle East
2012f
2009
Current Account Balance (% of GDP)
2010
Oman
2011f
Middle East
2012f
Interest rates (%)
9
16
14
14,7
12
12,1
8
9,4
12,3
8,8
10
8,7
8
6
7
4,0
2
-1,3
6
0
-2
3,8
3,2
0,7
0
4
4,4
4
2009
2010
2011f
Short-term interest rate
2012f
5
Oman
2009
Middle East
Fiscal balance (% of GDP)
2010
2011f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012f
8
25,0
6,2
6
21,7
4,6
4,6
4
2,9
20,0
19,1
20
18,4
15,0
1,7
2
10,0
0
-0,1
-2
5,0
-1,7
-2,0
0,0
-4
Oman
Middle East
2009
2010
2011f
2012f
Last update: Septembre 2011
POLITICAL OUTLOOK
* Protests initially broke out in Sohar and Muscat and then spread across the country. The regime seems to have regained control of the situation with
ongoing social negociations. Following the pro-democracy protests which began in February, asking for more jobs, higher wages and fight against
corruption Sultan Qaboos bin Said promised an increase in social spending of 44% compared to the previous budget. Recent protests have focused
more on social issues than on the political regime.
* The 70-year-old ruler of Oman, Qaboos bin Said al Said, has already responded to some of the protests by promising a $2.6-billion spending
program that would create 75,000 jobs. He has also fired his cabinet and installed a new government; and reportedly released prisoners who were
detained in prior demonstrations.
* Oman will hold elections for the Majlis al-Shura in October. The polls are the first since the Shura council was endowed with legislative powers
earlier in 2011 and follow a period of protests that erupted in February. The polls will test the vibrancy of Oman's political society and the endurance
of public opinion in favour of political as well as socioeconomic reforms.
* Neighboring countries in order to reduce any contagion risk will continue to support and preserve the regime of Qaboos.
* Political liberalisation in Oman can be expected to move very gradually and slowly forwards in the near term.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2008)
5.2 GW
Oil 5%
Biomass 8%
Production (2007)
Consumption (2007)
Natural gas
Electricity matrix
(installed capacity)
in 2008
Gas
87%
14.4 TWh
11.5 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
30 TCF
850 BCF
477 BCF
Electricity
* The privatization of the electricity sector began in 1999. The 2004 sector law implemented a new market structure, paving the way for further
privatization, and established an independent regulator (AER Oman). The government started carrying out unbundling of the power sector and setting
up of independent companies on a commercial basis. The electricity production market has been opened to independent power producers (IPPs) to
help raise generation capacity. Oman's total installed power capacity was 5.2 GW late 2008.
* Electricity demand is expected to strongly increase (+11%/year by 2013), driven by the increase in population, changing consumer behaviours (due
to rising incomes) and industrialization. Oman plans to invest 7.79 billion USD to build several power and water desalination plants to meet the
demand requirements. Al-Duqm plant (1,000 MW) is to be built by 2015 and an other plant (1,300 MW) is planned in the Northern part of the country
by 2012. The Barka and the Sohar plant will also see upgrades under the agency's plans, increasing electrical production capacity of the plants to
650 MW each by 2013.
* The government is evaluating other possible future sources for electricity production, including nuclear power, coal generation and renewable
energy (wind, solar, biomass). Oman aims at developing renewable energies, as it has a strong potential for wind and solar energy. The Public
Authority for Electricity and Water has launched a tendering process for the construction of wind and solar plants. Oman and India agreed in January
2010 for a strong cooperation in the field of renewable energy. A pilot solar project in Oman, with a capacity of 50-200 MW is in the offing.
* Oman takes part in the interconnection of the electricity grids of the six GCC countries.
Oil
* Oman's proven oil reserves were 800 million tons late 2009. They are expected to be fully depleted by 2020. Oil production reached 816.5 thousand
barrils per day in 2009. Petroleum Development Oman (PDO, 60% public) is the main oil producer in the country, with about 80% of the total
production. Six other companies produce oil. The Muscat refinery has a capacity of 80,000 barrels/day.
* The oil exports are mainly oriented towards Asia (China, Japan, South Korea, India).
Gas
* State-owned companies dominate Oman’s natural gas sector. However, the government has increasingly enlisted foreign companies in new
exploration and production projects, especially in the more geologically complex natural gas reservoirs, where BG Group and BP were recently
awarded Production Sharing Contracts (PSCs). Oman Gas Company is responsible for gas transport and distribution. Oman LNG (51% State-owned)
has been created to build the two first units of Qhalat LNG plant (10.3 million tons/year capacity).
* Gas production amounted to 850 BCF in 2008. PDO is the main gas producer (63.3 million m³/day). The Khazzan and Makarem fields are estimated
to contain significant volumes of natural gas; some estimates indicate that the two fields could nearly double Omani reserves.
* According to Oil & Gas Journal, Oman’s proven natural gas reserves stood at 30 Tcf as of January 2009. Oman seeks to increase natural gas
production to meet rising domestic demand, as well as increase exports of liquefied natural gas (LNG). Oman’s natural gas reserves are however
depleting, and the country may become a net natural gas importer in a near future.
* Oman imports some natural gas from Qatar via the Dolphin pipeline. In September 2008, Iran and Oman have signed an agreement for the supply
of 28 million m/day of gas to Iran, in exchange of an access to Oman's liquefaction capacities from 2012. The project also includes the construction of
a 200-km undersea gas pipeline between the two countries.
* In 2008, Oman exported approximately 385 Bcf of LNG, nearly two-thirds of which went to South Korea, while the remainder went to Japan (26%),
India, Taiwan, and Spain. Oman has three LNG production trains with total annual liquefaction capacity of about 485 Bcf.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
88
97
(Source: Oman ministry of Environment 2010)
Municipal waste collection (%)
Municipal waste generation
N/A
1595 tonnes per year
Water: * To date, 40% of the drinking water distributed in Oman comes from desalination process. According to state-owned Oman Power & Water
Procurement Company (OPWP) demand for desalinated water will rise from 22.5bn gallons a year in 2008 to 53.5bn gallons a year in 2015.There are
also some 230 wastewater treatment plants in the country. *Demand for desalinated water is projected to more than double over the next seven
years from 132.9mn cubic metres (m3) a year in 2009 to 320.6mn m3 by 2016, according to a study released in June 2010 by OPWP. The
projections, based on a seven-year (2010-2016) demand outlook forecast a 13% increase in annual average consumption growth over this period.
* The government has launched in 1999 the privatization of the water sector (together with the electricity sector). * The eighth five-year plan, 20112015, will see investment directed towards the overhaul of ageing infrastructure. New capital will be made available to meet the requirements of new
urban areas. Around 20 projects worth US$780mn are in the tendering process.
Waste: * At present, all solid waste is managed by government, municipalities and public entities such as Ministry of Health (medical waste). The
waste is disposed in the country's 350 landfills. * The state-owned Oman Environment Services Holding Company SAOC (OESHCO) has unveiled
an ambitious plan to build 16 state-of-the-art landfills, along with 65 waste transfer stations and 5 waste treatment plants. The private sector will also
be invited to set up these stations. Furthermore, all 350 existing dumpsites, with the exception of a few purpose-built landfills, will have to be closed
down. The government targets to reduce waste generation through waste treatment, recycling, and possibly waste-to-energy projects. * Moreover,
OESHCO has already started the tender processes for various fast-track projects, under the public-private-partnership (PPP) model, including the
establishment of the country's first National Hazardous Waste Management Project at Adam in the Interior region.
Last update: Septembre 2011
QATAR
POLITICAL BACKGROUND
Type of government: Constitutional Monarchy
Head of State: The Emir, Sheikh Hamad bin Khalifa al-Thani, succeeded to the throne in June 1995. He is also Minister of
Defence and army commander.
Prime Minister: HE Hamad Bin Jassem Bin Jabor Al-Thani (also Minister of Foreign Affairs and CEO of Qatar
Investment Authority)
Key Ministers: Minister of Energy: HE Dr Mohamed bin Saleh Al-Sada
Parliament: 35-member Parliament (the Majlis al-Shura or Consultative Council) appointed by an Emiri decision. The 45member Parliament established under the new Constitution (2005) is postponed year by year.
COUNTRY RISK
AA-/Stable/A-1+
Standard & Poor's
good investment grade.
Country vs. World Median
(Five-year risk aggregates)
The business environment is good. The
companies' balance sheets are not
always available but more or less reliable.
Secure business environment, with low
corporate default.
A2
COFACE
SECURITY RISK
Control Risks 2010
B
Low, no significant restrictions on travel
to Qatar
L
40
35
30
25
20
15
10
5
0
Overall
Financial
Qatar
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
1,7 Urban population (2015 p)
125,9 HDI ranking
93,6 %
38/169
Exchange rate (QAR/USD): 3.63 (09/2011)
Qatar's economic outlook still bright, despite regional political turmoil. Real GDP growth is forecast to surge to 17.4% in 2011 (16.5% in
2010), as two major new liquefied natural gas (LNG) projects came on stream. In 2010, the non-hydrocarbon sector (manufacturing,
building and construction, finance insurance and real estate and other services) represented 48.75 % of the total GDP.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
10
20
16,5
18
5
16
8,7
2010
-5
1,2
2011 f
3,0
2012 f
-2,4
8,6
-10
6
4,0
4
2
4,4
0
12
8
4,4
2009
14
10
8,7
6,8
17,4
5,5
-15
5,1
-16,3
0,7
-20
0
2009
2010
2011 f
Qatar
2012 f
Qatar
Middle East
Current Account Balance (% of GDP)
Middle East
Interest rates (%)
8
30
27,1
25,2
25
20
7
16,4
15
12,1
14,7
10
6
6,8
8,7
5
Short-term interest rate
4,0
Qatar
0
2009
2009
Middle East
2010
2011 f
Fiscal balance (% of GDP)
2010
2011 f
5
80,0
70,4
70,0
15,1
63,8
60,0
57,4
52,2
50,0
10
6,5
6,2
3,4
5
1,7
5,4
40,0
4,6
30,0
20,0
0
-5
External debt (% GDP)
2012 f
20
15
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
2012 f
10,0
-1,7
0,0
Qatar
Middle East
2009
2010
2011 f
2012 f
Last update: Septembre 2011
POLITICAL OUTLOOK
* The Emir, Sheikh Hamad bin Khalifa al-Thani, will focus on economic and foreign policy issues and is unlikely to initiate any
substantive domestic political reforms in 2011-2012. In December 2010, Qatar was selected as host of the 2022 World Cup.
* After presiding over projects that saw Qatar's transformation from a marginal oil producer to the world's largest producer of liquefied
natural gas (LNG) and gas-to-liquids (GTL) over the span of 18 years, HE Abdullah bin Hamad al-Attiyah, the deputy prime minister and
energy and industry minister, has been appointed to head the emiri diwan (the ruler's court). Mr Attiyah has been replaced as energy and
industry minister by the former minister of state at the ministry, Mohammed Saleh al-Sada.
* Through its Doha-based Al-Jazeera television network and its expanding regional efforts, Qatar is carving out a greater regional role
for itself amid the turmoil that has hit many countries in the MENA region. Al-Jazeera's reporting of the revolts in Tunisia, Egypt and
unrest elsewhere, has certainly contributed to Qatar's efforts. Furthermore, Qatar has had a critical role in supporting the Libyan
Transitional Council and by participating in NATO's military mission in Libya. Qatar is expected to continue its ambitious hopes for a
bigger regional role and greater influence.
ENERGY OUTLOOK
Oil0%
1%
Electricity matrix
Electricity (Source: Enerdata)
Capacity (2008)
5.5 GW
Production (2008)
17.1 TWh
Consumption (2008)
14 TWh
0%
Gas
99%
Natural gas (Source: Enerdata)
Proven reserves (2008)
25222 Gm3
Production (2008)
73.3 Gm3
Consumption (2008)
73.0 Mtep
Electricity
* All of Qatar's power plants are natural gas-fired. Water desalination is achieved in tandem with electricity generation.
* Electricity generation shortfalls led the Qatari government to encourage greater foreign investment through independent power projects
(IPPs) and to begin restructuring of the country's power sector. Ras Laffan C (GDF SUEZ) is the largest independent power and water
plant (IWPP) in the country, providing 2,730 MW of electricity and more than 286,000 m3 desalinated water per day. Qatar total power
generation capacity will increase to 9,039 MW and its desalination capacity to 320 million gallons per day. IPR-GDF SUEZ also manages
Raslaffan B IWPP.
Gas
* With 14.7% of the world's reserves of natural gas, i.e. some 25 000 billion cubic meters, Qatar holds the 3rd position among the
countries with the most important gas reserves after Russia and Iran. Most of Qatar's natural gas is located in the massive offshore
North Field, which holds more than 900 Tcf of proven natural gas reserves.
* Qatar Petroleum (QP) plays a dominant role in Qatar's natural gas and oil sector. QP is a leading upstream producer of natural gas
and crude oil. It also plays an important role in downstream projects, including LNG production, refining, chemicals and petrochemicals
production, etc. Qatar's LNG sector is dominated by Qatargas Operating Company Limited (Qatargas) and RasGas Company Limited
(RasGas). RasGas is owned 70% by QP and 30% by ExxonMobil, while the Qatargas consortium includes QP, Total, ExxonMobil,
Mitsui, Marubeni, ConocoPhillips and Shell. The LNG companies handle all upstream to downstream natural gas transportation
themselves, while the Qatar Gas Transport Company (known as "Nakilat") is responsible for shipping Qatari LNG.
* Qatar has become the world's largest exporter of LNG in 2010, with a production capacity up to 77 MMt/y (3.8 Tcf/y). Qatari
governement officials announced that they do not anticipate building any more LNG facilities in the near-term future and that any
additionnal capacity increases will be the result of improvements in the existing facilities.
* Pipeline Gas Production reached 2,8 billion cubic feet per day in 2010 and is expected to be around 4 billion cubic feet par day in
2011. Regional exports through the Dolphin Energy pipeline are already feeding UAE and Oman. The pipeline can currently carry up to
maximum of 2 billion standard cubic feet per day of refined methane gas from Qatar. In partnership with Exxon Mobil, QP also developed
Al Khaleej Gas (AKG) pipeline project. AKG-phase 1, which began production in 2005, combined with AKG-phase 2 completed in
December 2009 supplies natural gas to domestic markets, while recovering condensate and natural gas liquids. AKG's production
capacity stands at 2 billion standard cubic feet of gas per day.Furthermore, The Barzan project,also a parternship QP and
ExxonMobil,is new the project of supplying gas to the domestic market in Qatar.1.4 billion standard cubic feet of gas is expected to reach
the domestic market on a daily basis, with the first gas flow planned for 2014.
* Pearl GTL, developped by QP and Shell, is the largest energy project ever launched in Qatar. It will develop about 1,6 BSCFD of North
Field gas top produce approximately 140,000 bbd of synthetic fuels and base oils.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2011)
Access to drinking water (%)
Access to sanitation (%)
100
100
Water * Qatar has no water production plants, as nearly all potable water is provided by desalination plants. The public sector Qatar
General and Water Corporation known as Kahramaa acts as the bulk purchaser of power and potable water from private producers
through power and water purchase agreements. Kahramaa is also responsible for distribution and transmission of power and water.
Waste Water Treatment Plants (WWTP), and sewerage networks are managed by the Public Works Authority known as Ashghal.
* Qatar has planned to build a $ 2.75 billion mega reservoir capable of holding 7 days worth of water in order to prevent failure of its
water desalination plants . The storage project, with a planned capacity of 1.9 bn imperial gallons, is still in the design stage and may
include a network of reservoirs connected by a 183km, 2.5m-wide pipeline linking the Ras Laffan desalination facility in the country’s
north and the Ras Abu Fontas plant in the South.
* Qatar's main WWTPs are : Doha West (135,000m³/d), Doha South (112,000 m³/d), Lusail (60,000 m³/d), Industrial Area (12,000 m³/d)
and Al Khor (4,860 m³/d). Degrémont won in 2005 the first DBO (design, build, operate) bid in the region, for Doha West WWTP. In
2006, Degrémont won the contract for DBO of Lusail plant.
Waste * As all other GCC countries Qatar has a weak waste collection, transportation and handling. Singapore-based, Keppel
Corporation is setting up an integrated Domestic solid Waste Management System in Messaied Indsutrial City management facility in
Qatar. The plant will treat 2,300 tpd of mixed domestic solid waste and up to 5,000 tpd of construction and deolition waste. the plant, will
also have the capacity to turn waste into about 55 MW of electricity a year.
Last update: Sept 2011
SAUDI ARABIA
POLITICAL BACKGROUND
Type of government: Absolute Monarchy
Head of State: King Abdullah bin Abdel-Aziz al-Saud (since 2005)
Key Ministers: Minister of Petroleum and Mineral Resources: Ali Al-Naimi, Chairman of Saudi Aramco
Minister of Water and Electricity: Abdulah bin Abd-ur-Rahman Al-Hossein
COUNTRY RISK
AA-/Stable/A-1+
Standard & Poor's
Country vs. World Median
High investment grade
A4
M
COFACE
SECURITY RISK
Control Risks 2010
B
A somewhat shaky political and economic
outlook and a relatively volatile business
climate can affect corporate payment
behaviour. Corporate default probability is still
acceptable on average.
Medium
(Five-year risk aggregates)
40
35
30
25
20
15
10
5
0
Overall
Financial
Saudi Arabia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
25.89 Urban population (2015 p)
434.7 HDI ranking
Exchange rate (SAR/USD): 3.75 (09/2011)
91.1%
55/169
* In the absence of any significant domestic unrest, the Saudi economy will likely see a net benefit from the surging oil prices and higher
oil output in our view. Indications are that the kingdom has boosted oil production in light of the shut-in barrels of Libyan crude, which
along with the massive spending push by the Saudi government to ease social tensions, will bolster overall economic activity and push
GDP growth 5.8% in 2011.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
7
14
5,8
6
5,1
5
10
5,5
4,0
4,9
4
3,8
3
12
6
2
8,7
8
6,8
5,1
5,6
4
0,7
4,4
1
5,4
4,4
5,1
2
0,6
0
0
2008
2009
Saudi Arabia
2010
Middle East
2011 f
2008
2009
Saudi Arabia
Current Account Balance (% of GDP)
2010
2011 f
Middle East
Interest rates (%)
5
30
25,2
25
4
20,0
20
Short-term interest rate
15,4
14,7
3
15
10
8,7
1
4,0
0
-5
2
12,1
5,6
5
2008
2009
2010
Saudi Arabia
2011 f
0
Middle East
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
2008
2009
2010
External debt (% GDP)
2011 f
20
25,0
15,5
23,1
15
20,6
10,0
10
6,7
6,2
5
20,0
4,6
16,8
15,3
1,7
15,0
0
-1,7
-5
-6,2
10,0
-10
Saudi Arabia
Middle East
2008
2009
2010
2011 f
Last update: Sept 2011
POLITICAL OUTLOOK
* Saudi Arabia is watching events in the Middle East and North Africa very closely in light of the popular revolts across the region. In
particular, Saudi Arabia is highly concerned about instability in neighbouring Bahrain, and has sent some 1,000 troops to aid the Bahraini
leadership. For Saudi Arabia, ensuring the survival of the Al-Khalifa monarchy is central to retaining regional stability and preventing the
emergence of a Shi'a-dominated Gulf region with both Iran and Iraq now politically dominated by Shi'as. Furthermore, Saudi Arabia has its
own domestic concerns as well, amid low levels of protests held by its own Shi'a minority in the country's oil-rich Eastern Province.
* Alarmed by the potential for discontent, the king announced a raft of welfare pay-outs and public-sector wage increases in February but,
beyond perhaps a modest cabinet reshuffle, meaningful political reform is unlikely, given the need to maintain consensus among senior
princes with strong power bases of their own, and to accommodate the conservative clerical establishment.
* Uncertainty persists about the political succession, which will be an increasingly pressing issue over the forecast period, since both the
king and the crown prince, Sultan bin Abdel-Aziz al-Saud, are in their late 80s. There will be increasing focus on the eventual transfer of
power to the next generation, with the sons of Prince Sultan, Prince Nayef and Prince Salman being among the possible contenders.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
40.9 GW
Oil
39%
Electricity matrix Gas
(installed capacity)
in 2009
Production (2009)
Consumption (2009)
211 TWh
186 TWh
46%
Natural gas
(Source: Enerdata)
Proven reserves (2009)
Production (2009)
Consumption (2009)
7718 Gm3
85.4 Gm3
17.1 Mtep
* The Ministry of Petroleum and Ministry of Water and Electricity share the responsibility of the energy sector. The Supreme Petroleum
Council was created in 2000 to supervise and coordinate the oil and gas policy.
* Saudi Arabia holds 36 billion tons oil reserves, more than a quarter of the world total reserves. The country is the biggest world producer
and exporter. The oil exports represented revenue of 293 billion USD in 2008, about 90% of the total Saudi exports. Saudi Aramco (100%
State-owned) controls 98% of the oil reserves. The country's oil policy aims to develop gas consumption to substitute oil (in order to
increase oil exports) and prepares for an opening of the sector to private investors.
Electricity
* The Saudi Electric Company (74% state-owned), created in 2000, is responsible for electricity generation, transmission and distribution.
Its activities are expected to be separated in the coming years to allow the entry of independent producers.
* Saudi Arabia's power installed capacity reached 40.9 GW in 2009. The government plans to increase installed capacity to 68 GW by
2020. The total investment required to face the growing demand is estimated at 50 billion USD. Many new plants are to be built by the
private sector through BOO or BOT contracts. 10 Independent Water and Power Projects (IWPP) should be implemented by 2016 for a
total capacity of 7,000 MW.
* Saudi Arabia is considering nuclear technology to supply its power-hungry desalination plants. It has already signed a deal in 2008 with
the United States on civil nuclear cooperation but it was not effectively put into practice. In 2011 Frannce and Saudi Arabia signed a
cooperation agreement on peaceful nuclear energy development.
* The government has announced its intention to develop solar energy. Saudi Arabia has begun building the first solar-powered water
desalination plant, the first step in a three-part program to introduce solar energy into the Kingdom. The program, launched by the King
Abdulaziz City for Science and Technology (KACST), aims to help stabilize future power and water supplies inside Saudi Arabia through
the creation of solar-powered desalination facilities.
* The King issued a royal decree in April 2010 to build a new renewable-energy "city". The King Abdullah City for Atomic and Renewable
Energy (KACARE) serves as a centre for renewables research and for co-coordinating national and international energy policy.
* South Korean builder Doosan Heavy Industries & Construction and its Saudi Arabian partner BEMCO signed a deal in 2009 for a 1.84
billion USD power project. The project involves transforming a gas-powered plant into a combined-cycle facility and adding 1,241 MW
capacity to al-Qurayyah plant. The project has been scheduled to become operational by June 2014.
Gas
* Saudi Arabia holds the 5th biggest gas reserves in the world, with 7,700 Gm³ (4% of the total world reserves). Gas production is strongly
growing, reaching 85.4 Gm³ in 2009 (+7%/year since 2000). Natural gas local demand is expected to increase in the coming years.
* The country intends to increase its gas reserves and production through cooperation with foreign operators. Aramco signed a contract
with Ray McDermott for the construction of 4 platforms and a 100-km undersea gas pipeline to transport 15.5 Gm³/year of gas from the
Karan field. The project is to be commissioned in 2012.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2006)
Access to drinking water (%)
Access to sanitation (%)
Waste
97
100
(Source: Unstat 2007)
Municipal waste collection
Municipal waste landfilled
83 million tons
51 Mt/year
Water: * Saudi Arabia has limited water resources while demand for water is growing rapidly. Water demand is expected to reach 10
million m³/day in 2024 (of which two thirds would come from desalination). Many of the water and sewage treatment plants built in the late
70's are nearing the end of their useful work life and the growing population is making the capacity of these plants insufficient to meet
demand. Massive investments are needed to upgrade or replace the existing water and wastewater plants and networks, estimated at
more than 50 billion USD by 2020 by State-owned Saline Water Conversion Corp.
* In order to deal with these challenges, the Government has launched a process of reform which key objectives are the supply of clean
potable water and sanitation services to all households at a reasonable price. The reform comprises four key elements: the creation of the
National Water Company, public private partnerships (PPPs), investments to improve sector's performance and to attract private
operators, and the introduction of classic economic regulation. Regarding PPPs, 2 management contracts have been awarded so far, one
for Riyadh water to Veolia Water AMI, and the second to SUEZ Environnement and the Arabic Company for Water Development &
Energy Ltd in Jeddah for the development, management and maintenance of the water and sewage sector in Jeddah.
* 4 major cities are included in the privatization program launched by the government: Mecca, Taif, Madinah and Dammam.
Waste: * Domestic, industrial, chemical and hazardous waste is on the rise in Saudi Arabia, driven by industrialization and urban growth.
Little or no recycling currently takes place. There is a strong need for new technologies for handling this waste, particularly incineration
technologies. The government has allocated 3 billion USD for the handling, processing, management and disposal of solid waste.
Last update: September 2011
SOUTH AFRICA
POLITICAL BACKGROUND
Type of government: Federal parliamentary representative democratic republic
Head of State: Jacob Zuma (African National Congress - ANC)
Elected in: May 2009
Next poll in 2014
Key Ministers: Minister of Energy: Elizabeth Dipuo Peters (ANC)
Minister of Water and Environmental Affairs: Buyelwa Patience Sonjica (ANC)
Parliament: Bicameral Congress: National Assembly (400 seats) - National Council of Provinces (90 seats)
Elected in 2009
Next poll in 2014
COUNTRY RISK
Adequate capacity to meet financial commitments.
BBB+
Standard & Poor's
High economic, financial or institutional strength
and no material medium-term repayment concern.
A3
Moody's
Volatile political and economic environment can
affect corporate payment behaviour. Business
climate can nonetheless give rise to occasional
difficulties for companies. Corporate default
probability is quite acceptable on average.
A3
COFACE
Country vs. World Median (Global Insight)
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
SECURITY RISK
Control Risks 2010
B
Overall
M
Medium
Financial
Business
South Africa
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Exchange rate (ZAR/USD): 8,06 (09/2011)
Population (Million)
49 Urban population (2015 p)
86%
Nominal GDP (Bn USD)
288 HDI ranking
129/182
*Growth slowed significantly in the second quarter of 2011 (to 1.3% from 4.9% in the first quarter) as the primary and secondary sectors
saw contraction. These sectors are very dependent on the global scenario and the slowdown reflected the drop in global demand,
especially from the developed world. The government’s aim of creating 5 million jobs by 2020 is under serious threat. Unemployment
rate reached 25.7% in second quarter of 2011. Consumer price inflation accelerated to 5.3% year on year in July 2011, a 17-month high,
underpinned by costlier food, fuel and electricity. Energy prices, although subject to regulation, remain the chief inflationary drivers.
CPI Inflation (%) change from a year earlier
Real GDP Growth (%) change from a year earlier
4
8
2,9
3,4
3
7
3,4
2,8
2
1,9
1,6
2009
2010 f
2011 f
2012 f
4,9
4
4,3
3
-1,7
-2
5,8
5
0
-1
7,1
6
1
2
-3
-3,9
-4
1,6
2,7
1
1,7
0,4
0
-5
2009
South Africa
OECD
2010 f
2011 f
South Africa
Current Account Balance (% of GDP)
2012 f
OECD
Interest rates (%)
14
2
12
0
-0,5
-2
-0,7
-2,8
-4
-0,6
-0,8
8
-3,4
-4,0
-6
10
-4,7
6
Short-term interest rate
Long-term interest rate
4
-8
2009
2010 f
2011 f
South Africa
2009
2
OECD
Fiscal balance (% of GDP)
2010 f
2012 f
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
0
40,0
-1
-2
30,0
27,7
27,2
-3
23,3
-4
-4,1
-5
-6
-4,8
-5,0
-4,9
-5,9
-7
-4,7
10,0
-7,0
-8
-9
21,9
20,0
0,0
-8,0
South Africa
OECD
2009
2010 f
2011 f
2012 f
Last update: September 2011
POLITICAL OUTLOOK
*The Jacob Zuma-led administration is currently faced with the twin challenges of delivering to an increasingly expectant electorate at a
time when the country's economy is struggling to recover from the effects of the first recession in 17 years. The government’s ability to
deliver essential services to the population continues to be handicapped by the global economic slowdown.
*The president Zuma faces strong media criticism and open challenge to his authority from various ANC factions. While he is reported to
be the subject of a plot, allegedly orchestrated by ANC heavyweight Tokyo Sexwale, to remove him from office during the ANC's National
Elective Conference in 2012, Mr Zuma has sought to buy himself some breathing space by persuading the party to delay all substantive
decisions on his political future and succession plans, as well as policy—including the thorny issue of nationalising the country's
mines—by deferring debate until the summit.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
45.4 GW
Nuclear
4%
Hydro 4%
Coal
86%
Production (2009)
Consumption (2009)
250 TWh
207 TWh
Gas 5%
Electricity matrix
(installed capacity)
in 2009
Oil 1%
Natural gas (Source: Enerdata)
Proven reserves (2009)
9 Gm³
Production (2009)
1.8 Gm³
Consumption (2009)
4.7 Gm³
* The Department of Mines and Energy set up an Energy Plan in 2003, which main objectives are better access to energy for the
population, diversification of energy sources (development of renewable and nuclear energies) and market liberalisation.
* While South Africa's oil and gas reserves are weak, the country holds 7% of the world reserves (about 48 billion tons) and is the fifth
coal exporter. In the power sector, there is a strong potential in solar and wind energy.
* South Africa intends a 34% greenhouse gas (GHG) emissions reduction by 2020 and 42% by 2025, with international cooperation.
* In September 2010, South Africa launched the South African Carbon Geological Storage Atlas to develop carbon capture and storage
in the country. The Atlas aims to locate potential geological storage sites for CO2.
Electricity
* Eskom, the national electricity company, produces about 95% of the electricity consumed in South Africa. Eskom's total installed
capacity was 44.2 GW in 2009. The company holds 13 coal-fired power plants, one nuclear power plant, 6 hydropower plants and 4 gasfired power plants. Eskom benefits from a 5.3 billion euros government support on a 5-year period to increase power production capacity.
* Electricity Distribution Industry Holdings (EDI Holdings) was created in 2003 to facilitate the electricity distribution sector's reform. The
creation of 6 regional distributors (REDs) is ongoing. While Eskom will keep control over the transport network, up to 30% of new insalled
capacity will be built by independent power producers (IPPs).
* South Africa's total installed electricity capacity amounted 45 GW in 2009. Electricity production reached 250 TWh in 2009. Electricity
consumption increased 2.5%/year between 1990 and 2007, and has declined since 2007 to reach 207 TWh in 2009. The government
pursues its objective of access to electricity for the whole population by 2012 (80% access in 2007, 44% in 1995).
* The country faces recurrent electricity shortages. The Government launched a public campaign to encourage electricity savings and a
cash program to build several power plants. The 2008 "National response to South Africa’s electricity shortage” plan aims to attract
investments in electricity distribution structure and the fast-tracking of electricity projects by IPPs.
* The country's only nuclear power plant was built in 1976 in Koeberg and has a capacity of 1,930 MW. Eskom plans to build 20 GW of
nuclear capacity by 2016-25., doubling the country's production capacity up to 80 GW by 2025. However, Eskom has cancelled the
construction of a second nuclear plant due to the economic crisis, preferring to extend the existing Koeberg plant's capacity by 65 MW.
* South Africa's 2003 "White Paper on Renewable Energy" set an objective of 10 TWh electricity production from renewables in 2013.
The World Bank assigned 260 million USD to a 100 MW wind farm and the Upington 100 MW solar power plant. Eskom will start
developing renewable energy projects in October 2010 (mainly solar and wind), of a total capacity of 1,025 MW, which should be
commissioned by 2012-13. Green energy projects beyond the 1,025MW would be part of an integrated resources plan under
consideration by the government.
* The country intends to pursue cooperation with its neighbors within the "Southern African Power Pool" framework, which aims to ease
energy exchanges between 9 Southern Africa countries.
Gas
* Strongly decreasing since 1990 (50 Gm³), gas reserves were estimated at 9 Gm³ in 2009. Gas production is recent and weak (1.8 Gm³
in 2009). The country's gas consumption tripled between 2003 and 2005 and remains since then stable around 4.6 Gm³.
* South Africa imports gas from Mozambique since 2004, through a 865-km gas pipeline (capacity of 120 million billion joules/year). Total
gas imports reached 2.3 Gm³ in 2008. GigaJoule Africa, a South African company, plans the construction of a new gas pipeline to supply
gas from Namibia to Cape Town region, which should be operational by 2014.
ENVIRONMENT OUTLOOK
Water
(Source: WHO 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
91
77
(Source: IWMSA 2008)
Municipal waste generation
Waste per capita
26.4 million tons
550 kgs/year
Water: * South Africa is subject to sporadic droughts. For the time being there is sufficient water in the rivers, dams and the underground
water. In addition to the Phase 2 of the Lesotho Highlands Water Project there are other projects in place for the timely development of
infrastructure to ensure future water supply to the growing economy. The total net extraction of water from surface-water resources
amounts about 10.2 billion m³/year.
* The Water Service Act (1997) defines the respective roles of Water Services Authorities and Water Service Providers (WSP). Each
municipality has to determine the type of WSP it will rely on. 6 m³/month of drinking water are allocated freely per household for basic
needs. The 2004 National Water Resource Strategy (NWRS) describes how South Africa’s water resources will be protected, used,
developed, conserved, managed and controlled.
Waste: * 95% of South African waste is landfilled. South Africa generates around 550 kgs of waste per capita per annum.
* The government adopted in 2008 the Waste Act, which provides a legislative framework for waste management. A National Waste
Management Strategy (NWMS ) is currently being developed to implement the Waste Act. The government intends to decrease the
amount of waste and favor recycling. Legislation on recycling is being prepared (minimizing waste, recovery of glass, metal and paper;
compacting and treatment).
* E-waste (old computers, printers, mobile phones...) is expected to boom in the coming years. In 2009, UNEP released its report entitled
"Recycling -- from E-Waste to Resources".
Last update: Sept 2011
SYRIA
POLITICAL BACKGROUND
Type of government: Authoritarian Republic
Head of State: Bashar al-Assad (since 2000)
Prime Minister: Adel Safar (since April 2011)
Key Ministers: Ministry of Petroleum and Mineral Resources: Sufian Allaw
Parliament: People's Council (Majlis al-Sha'ab) with 250 seats
Elected in 2007
Next poll : not determined
COUNTRY RISK
Standard & Poor's
N/A
Moody's
N/A
COFACE
C
A very uncertain political and economic
outlook and a business environment with
many troublesome weaknesses can have a
significant impact on corporate payment
behaviour. Corporate default probability is
high.
SECURITY RISK
B
Control Risks 2010
H
HIGH TRAVEL RISK
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
23 Urban population (%)
59 HDI ranking
53%
111/169
Exchange rate (SYP/USD): 47.9 (09/2011)
* The recent demonstrations and violent government crackdown have disrupted economic activity in Syria, discouraging development
projects and investment in the country. Tourist activity has plunged lower, investment plans have been halted, and capital has fled the
country where possible. Given the country’s current economic difficulties, GDP growth is expected to decline to -3,6% in 2011, with
downside risks to our forecast heightened in the near term, given the ongoing political instability.
Real GDP Growth (%)
7
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
CPI Inflation (%)
15
5,1
6,0
4,0
10
5,5
5
0
1,5
3,2
-5
0,7
6,8
4,4
4,4
2,9
8,7
7,8
4,4
2009
2010
2011 f
2012 f
-10
2009
2010
2011 f
2012 f
-15
-20
-3,6
-30,6
-25
-30
-35
Syria
Middle East
Syria
Current Account Balance (% of GDP)
Middle East
Interest rates (%)
20
14,7
15
12,1
8,7
10
5
4,0
NO DATA
3,1
0
0,8
0,3
2010
2011 f
2012 f
Syria
-5
Middle East
-2,2
2009
0
2009
Fiscal balance (% of GDP)
2010
2011 f
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012 f
12
19,0
8
6,2
4,6
4
17,0
15,0
1,7
13,0
0
9,7
11,0
-1,7
-4
9
9,0
8,8
8,2
-4,6
-8
-12
-7,1
-9,0
-9,4
Syria
Middle East
7,0
5,0
2009
2010
2011 f
2012 f
Last update: Sept 2011
POLITICAL OUTLOOK
* Anti-regime protests continue to rage across Syria, including parts of the capital, Damascus. Despite the lifting of the state of emergency
and President Bashar al-Asad's pledge to implement limited reforms, government security forces are undertaking an increasingly violent
crackdown on anti-regime demonstrators. However, this has not not reduced the pressure from protests, and it has failed to convince
Syrians and observers of the government's ability to institute reforms.
* Over 2,000 people are said to have been killed in the unrest, and daily deaths are reported.
* The regime has been put under expanding international sanctions and isolation from the international community, including the Arab
League. Several of Syria's neighbours are also toughening their tone with the regime, including Turkey, Bahrian, Saudi Arabia, Morocco
and Kuwait.
ENERGY OUTLOOK
Hydro
15%
Electricity
(Source: Enerdata 2009)
Capacity (2009)
7.8 GW
Gas
62%
Production (2009)
Consumption (2009)
43.3 TWh
28.1 TWh
Oil 17%
Electricity matrix
(installed capacity)
in 2009
Natural gas
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
8.5 TCF
208 BCF
213 BCF
Electricity
* The electricity sector in Syria comes under the control of the Ministry of Electricity, which oversees the state utilities responsible for
electricity generation, transmission and distribution. The Public Establishment for Electricity Generation and Transmission (PEEGT)
controls most of the generating capacity in the country, and runs the transmission system. Meanwhile, the Public Establishment for
Distribution and Exploitation of Electrical Energy (PEDEEE) controls the distribution and sale of power, which has traditionally been heavily
subsidized.
* Syria's power installed capacity is 7.8 GW (2009). However losses are high, about 20% of the electricity generation.
* Power cuts are more frequent since 2007, as demand is soaring. According to PEEGT, electricity demand is likely to double by 2015.
Between 2008 and 2015, Syria electricity deficit is estimated around 5500 MW. This deficit represent 1000 MW in 2009 and should reach in
2012 1800 MW. To deal with this deficit Syria will have to install an extra capacity of at least 600 MW every year. The government is also
considering to modernize its electricity distribution network, since transportation losses are still estimated at 28% (2009).
* To face the rapidly accelerating demand, the government intends to attract international investment in the power sector. The Ministry of
Electricity has announced that it is selecting five sites where it intends to negotiate the construction of independent power producer (IPP)
projects.
* The country is keen to boost its renewable production and has indicated that renewable energy may account for 10.3%of total energy
demand by 2030.
* In 2010 the Koweit compagny Al Mishkat signed a contract of 48 M€ for the construction of a solar power plant of 7700m².
* In 2010, Armenia and Syria agreed to cooperate on the electricity sector and on the development of renewable energy sources.
Gas
* According to the Oil and Gas Journal, as of January 1, 2009, Syria's proven natural gas reserves are estimated to be 8.5 Tcf. In 2009,
Syria produced a 208 Bcf of natural gas and imported 5 Bcf from Egypt through the Arab Gas Pipeline (AGP).
* Syria's long-term aim is to become a transit state for Egyptian, Iraqi, and potentially Iranian gas, which would gain it valuable transit
revenues as well as help increase the availability of natural gas imports to Syria.
* Syria is building three new plants of gas treatment. One will be build by the American company Petrofac International and the two others
by the Russian group Strorytransgas.
* Early in 2010, Syria and Azerbaijan signed a memorandum of understanding on the purchase of 1-1.5 billion m³/year of Azerbaijani gas,
to be transported to Syria through the Turkish network. Nevertheless interconnections between both countries are not finished yet, which
postpone the first gas deliveries to 2011.
* Syrian Gas Company and Stroytransgas will built a 62 km gas pipepline from northern Syria to the Turkish border. This pipepline will
transport russian gas toward Syria through Turkey.
* Syria and Iraq are also constructing a pipeline linking the two countries, and talks are underway with Iran too, potentially allowing Iranian
natural gas to be exported to Europe at some time in the future.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
89
96
(Source: Unstat 2007)
Municipal waste collection
Municipal waste landfilled
7.5 million tons
93.9%
Water: * The coordination of the water sector is conducted by the State Planning Commission (SPC). Many ministries are involved in the
water sector. The Ministry of Housing and Construction (MoHC) is responsible for the drinking water supply and wastewater disposal. The
institutional framework conditions contribute to ineffective and unsustainable management of water resources: responsibilities are unclear
and there is a lack of coordination among the different entities responsible for water and wastewater management.
* The drinking water supply is characterized by high water losses and failure to cover costs. High population growth, continuing urbanization
and associated economic growth have put pressure on water resources and have initiated an accelerated process of degradation. As a
result, the long term availability of water is seriously endangered. To face the water shortages, the government intends to develop further
water facilities.
* Syria has been a partner country of German Development Cooperation for more than 40 years. The cooperation in the water sector
between the country and the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) was established in 2003. The first phase of the
six-year Syrian – German water programme started in 2006. The modernization of the water sector is divided into 2 phases: 2006-2009 (5.6
M€) and 2009-2011 (5.7 M€).
Waste: In Syria, municipalities are fully responsible for all Solid Waste Management (SWM) activities particularly day to day management
and operation of SWM systems, fee and tax collection, and private sector services contracting.
* The private sector is involved in solid waste collection, particularly in large cities. Private sector contractors collect 30% of the solid waste
in Damascus and 40% in Homs. The transfer and disposal of municipal waste is also being carried out by private firms in Damascus,
Aleppo and Homs.
Last update: Septembre 2011
TUNISIA
POLITICAL BACKGROUND
Type of government: Republic
Head of State: Mr Foued Mebazza, interim President since January 2011
Prime Minister: Beji Caid Essebsi
Key Ministers: Minister of Environment and Agriculture: Mr Mokhtar Jallali
Minister of Industry and Technology: Mr Abdelaziz Rassaa
Parliament: Composed of the Chamber of Councillors (Upper Chamber - 126 seats) and the Chamber of Deputies (Lower
Chamber - 214 seats)
Elected in 2009, the Parliament has been suspended in 2011. The Interim President rules through decree
An election for a Constituent Assembly will be held in Tunisia on 23 October 2011
COUNTRY RISK
Non investment grade
BB/Stable
Standard & Poor's
Moody's
Baa3
COFACE
The government would have the capacity to avoid
any near-term debt repayment problems if
confronted with a severe shock to public finances.
A4
SECURITY RISK
Control Risks 2010
B
A shaky political and economic outlook and a
relatively volatile business environment can affect
corporate payment behaviour.
M
Country vs. World Median
(Five-year risk aggregates)
35
30
25
20
15
10
5
0
Overall
Medium
Financial
Tunisia
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
10.4 Urban population
67.3%
Exchange rate (TND/USD): 1.44 (09/2011)
Nominal GDP (Bn USD)
44.5 HDI ranking
81/169
* The Tunisian economy has suffered from the weeks of unrest prior to Ben Ali's toppling and the ensuing fall-out from the unrest. For the
interim government it will be key to secure foreign assistance and the EU has pledged to give Tunisia receiving 23 MUSD in immediate
emergency aid and a further 359 MUSD million by 2013.
* The changing political environment has brought uncertainty to Tunisia’s outlook. The tourism industry has already been severely
impacted and the longer the political situation remains in flux, the greater disruption to economic activity in general. Consequently, the
2011 GDP growth projection of 4.6% was downgraded to 2.0%. Authorities have placed direct economic losses and damage to export
earnings at around 2.2 bn USD during the first month of protests. The rate of consumer price inflation is expected to be moderate,
averaging 3–4% through 2012. Temporary inflation pressures will likely result from a combination of supply shortages during the recent
unrest and the pass-through effects of recent subsidy cuts on food and fuel.
* In February 2011, EU allocated 17 MEUR to Tunisia for immediate and short-term support for democratic transition and assistance to
impoverished inland areas.
Real GDP Growth (%) change from a year earlier
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
CPI Inflation (%) change from a year earlier
12
4,4
4,5
3,1
10
3,2
10,0
3,1
3,0
8
7,8
6
2009
2010
2011
2012
6,5
3,5
4
-2,5
6,5
3,4
2
-3,9
0
2009
Tunisia
North Africa
2010
Tunisia
Current Account Balance (% of GDP)
20
3,4
4,4
2011
2012
North Africa
Interest rates (%)
7
16,7
6
12,8
15
5
10
6,9
4
Short-term interest rate
Long-term interest rate
5
3
0
-1,2
-5
2009
2010
2011
-4,7
2
2012
-2,1
1
-4,8
-5,0
0
-10
Tunisia
North Africa
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Fiscal balance (% of GDP)
External debt (% GDP)
-2,3
-2,7
-2,9
-4,0
-5,2
-5,6
-7,4
-8,0
51,0
50,0
49,0
48,0
47,0
46,0
45,0
44,0
43,0
42,0
41,0
40,0
49,9
48,1
45,4
43,6
2009
2010
2011
2012
Last update: Septembre 2011
POLITICAL OUTLOOK
* Former president Zine al-Abidine Ben Ali left Tunisia in January 2011 after 23 years of iron-fist rule. His position became unsustainable
after weeks of widespread intense protests were triggered over socio-economic and political issues. An interim government was formed
and is expected to come under considerable pressure until fresh elections are held, despite its efforts to raise its legitimacy and credibility
in the eyes of Tunisians. Tunisia is thrust into an uncertain future, with greater levels of instability and the possibility of continued unrest.
* Any new Tunisian government is likely to continue putting a focus on combating Islamic extremism and restrain the prevalence of
Islamist political forces in the political sphere and elsewhere. In particular, there may be fears that Islamist groups will seek to capitalize
on the political vacuum and security instability in the country to set roots down there. However, they will be challenged by previously
banned Islamist groups, which have now been legalised and incorporated in the political protests.
* Tunisia faces a major challenge in the unrest that has erupted in neighbouring Libya. Should Libya descend into a civil war-like scenario,
the security implications for Tunisia could be significant. Tunisia is already grappling with a sudden influx of Libyan refugees, following that
country's own unrest and protests.
ENERGY OUTLOOK
Wind,
Hydro geothermy
1%
2%
Oil
12%
Electricity
(Source: STEG)
Capacity (2010)
3.6 GW
Production (2010)
14.9 TWh
Consumption (2010)
12.8 TWh
Electricity matrix
(installed capacity in
2010)
Gas
85%
Natural gas (Source: Enerdata)
Proven reserves (2008)
39 Gm³
Production (2008)
2 Gm³
Consumption (2008)
16 Gm³
* The Ministry for Industry and Energy is responsible for the implementation of energy policies. The National Agency for Energy
Conservation (ANME)'s mission consists in implementating the State policy in the field of energy conservation and the promotion of
renewable energies.
* The government's energy policy includes the development of gas consumption and CO2 emissions reduction. The 2005-2011 plan aims
to make 20% energy savings compared to 2011 forecasted volume.
Electricity
* Société Tunisienne de l'Electricité et du Gaz (STEG), 100% state-controlled, is in charge of electricity generation, transmission and
distribution. Its monopoly for production was abolished in 1996. STEG has installed capacity of about 3,3 GW generated by 23 power
plants.
* 85% of the Tunisian power generation installed electric capacity (2.89 GW) is thermal (gas-fired). Public production amounted 12.3 TWh
in 2008 (80%), the remaining share being produced by independent compagnies. The two existing IPP's, Rades II and El Bibane,
currently generate approximately 25% of Tunisia's power production.
* Electricity consumption has been increasing by 6,8% per year on average since 1990 and the consumption per capita is estimated at 0,9
tep. The national grid currently covers 99.5% of the population.
* Two 126MW power plants have been recently built by General Electric. Feriana plant was commissionned in 2009 and Thyna plant in
May 2010. Alstom is currently building a 400 MW in Ghannouch. Tunisia is also part of a trans-Maghreb project to link the power girds of
all the Maghreb countries to those of Spain and the rest of EU.
Oil & Gas
* Tunisia has a small but flourishing oil and gas sector, which is supported by the efforts of a number of smaller companies alongside a
few mid-majors. The country has some of the same geological structures as its larger neighbours, Algeria and Libya, although the scale of
its prospects has been more limited to date. The country plays host to the Transmed pipeline running from Algeria to Italy is able to
supplement its own gas production with payment in kind from that link. Tunisia is currently focusing on the development of its downstream
sector, again with the support of foreign investors.
* Tunisia proven oil reserves amount 429 million barrels.
* Oil represents 52% of Tunisia's final energy consumption. It is mainly used for habitations and tertiary sector (49%), transports (24%)
and industry (25%). companies are conducting exploration, under joint-ventures with Entreprise Tunisienne des Activités Pétrolières
* Major multinational
(ETAP), state-owned company.
* Société Nationale de Distribution des Pétroles (SNDP) is in charge of the distribution of oil products (outside liquefied petroleum gas),
along with Shell, Total, ExxonMobil and a private company held by Abbès group.
* Oil production strongly increased in 2007 (+33%) thanks to the use of small wells in South Tunisia. Oudna is the most important oil field,
located 80km from Hammamet Gulf. This field produced 15.000 barrels a day, for a total of 4.2 Mt per year.
*A refinery project in Al Sakhiera area (with a capacity of 120,000-130,000 bpd) between Tunisia and Qatar International Petroleum, a
subsidiary of Qatar Petroleum (QP), was aborted due to a bribery request from an advisor of the ousted Tunisian president Zine Al Abedin
Ben Ali.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2006)
Waste
(Source: Unstat 2007)
Access to drinking water (%)
94
Municipal waste collection (mt)
1316
Access to sanitation (%)
85
Municipal waste landfilled (%)
99.9
Water: * Tunisia has achieved the highest access rates to water supply and sanitation services among the MENA countries through
sound infrastructure policy. 96% of urban dwellers and 52% of the rural population already have access to improved sanitation. By the
end of 2006, the access to safe drinking water became close to universal (approaching 100% in urban areas and 90% in rural
areas).Tunisia provides good quality drinking water throughout the year.
* The rate of connection to sewerage network in Tunisian urban areas increased from 20.6% in 1975 to 35.9% in 1987, and further up to
87.6% in 2008. The country counts about 15000 km of sewers, 658 pumping stations and a hundred water treatment plant.
Waste: * New controlled landfields have been built. The treatment capacity increased from 40% in 2004 to around 85% in 2008.
Last update: Sept 2011
UNITED ARAB EMIRATES
POLITICAL BACKGROUND
Type of government: Federal Monarchy
Federation of 7 emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Ras al-Khaimah, Umm alQaiwain and Fujairah.
Head of State: Sheikh Khalifa bin Zayed al-Nahyan (since November 2004)
Key Ministers: Prime Minister: Mohammed bin Rashid al-Maktoum
Minister of Energy: Mohammed bin Dhaen al-Hamli
Parliament: Unicameral Federal National Council of 20 appointed and 20 elected members representing the separate
emirates; it has a consultative role only. (last election: 2006)
COUNTRY RISK
Standard & Poor's
AA/Stable
Moody's
Aa2
SECURITY RISK
Control Risks 2010
B
(Five-year risk aggregates)
Very high economic, institutional or government
financial strength and no material medium-term
repayment concern.
Payment behavior is likely to be affected by a
change in the economic environment which is
generally favorable but volatile due to the current
crisis.
A3
COFACE
Country vs. World Median
Good investment grade (Abu Dhabi)
Low security risk, no significant
restrictions on travel
L
35
30
25
20
15
10
5
0
Overall
Financial
Business
United Arab Emirates
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
5.19 Urban population (2015 p)
83.6
Exchange rate (AED/USD): 3.67 (09/2011)
Nominal GDP (Bn USD)
238.6 HDI ranking
32/169
Despite the crisis in 2010, Dubai is finding more solid footing. Economic activity in the UAE has continued to build momentum through
the first half of 2011, powered by resurgent exports and rebounding tourism, alongside Abu Dhabi’s fiscal stimulus. Real GDP growth is
accelerating to a robust 5.2% in 2011, with greater advances in household and private investment spending compared with the previous
year. To be sure, strengthening domestic conditions in 2011 will take up slack from a somewhat-softer external environment.
Real GDP Growth (%) change from a year earlier
6
5,5
CPI Inflation (%) change from a year earlier
10
5,1
4,0
5,2
5,0
4
8,7
9
8
6,8
7
6
1,4
2
5
4
0
2009
2010
2011 f
2012 f
-1,6
2,0
2
1
2009
Middle East
2010
UAE
Current Account Balance (% GDP)
2011 f
2012 f
Middle East
Interest rates (%)
6
16
14
14,7
5
12
12,1
8,7
10
8
Short-term interest
rate
4
7,2
9,7
6
3
2,9
4
2
3,8
4,0
1
0
2009
2009
2010
2011 f
UAE
-2
0,9
1,6
0
UAE
2
5,7
3
0,7
-2
4,4
4,4
Middle East
Fiscal balance (% of GDP)
2010
2011 f
10
60,0
2,0
2
55,9
50,4
50,0
4,6
4
External debt (% GDP)
2012 f
6,2
6
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
8,6
7,9
8
2012 f
40,9
40,0
39,1
2011 f
2012 f
30,0
1,7
20,0
0
-2
10,0
-1,6
-1,7
0,0
-4
UAE
Middle East
2009
2010
Last update: Sept 2011
POLITICAL OUTLOOK
* Experts consider the outlook for the domestic political environment to be stable, with the president of the UAE and ruler of Abu Dhabi,
Sheikh Khalifa bin Zayed al-Nahyan, enjoying the support of the rulers of the other six emirates and facing no significant threat to his
authority. The UAE will remain concerned about the unrest currently gripping the Middle East and North Africa region, but the country
should be better protected than some of the other Gulf states
* The UAE will continue to balance its relations with the West and with Iran, but the US will keep the pressure on the UAE to implement
tougher sanctions on the Islamic Republic.
ENERGY OUTLOOK
Oil
2%
Electricity (Source: Enerdata)
Capacity (2009)
20.1 GW
Production (2009)
90.2 TWh
Consumption (2009)
80.1 TWh
Electricity matrix
(installed capacity)
in 2009
Natural gas (Source: Enerdata)
Proven reserves (2009)
6432 Gm3
Production (2009)
51.8 Gm3
Consumption (2009)
82 Mtep
Gas 98%
Electricity
* UAE power demand is among the largest in the region due to financial and tourist projects as well as a growing population. According
to Global Insight, UAE has added 24% electricity-generating capacity at an annual rate over the last 30 years. Current total capacity for
electricity production will need to increase further considering the 10% per year demand rise expected through the next years. Nearly all
UAE power comes from conventional thermal generation.
* Since the merger with IP in 2011, GDF SUEZ has five IWPP projects in the UAE: Al Taweelah power generation and desalination plant
representing 1,360 MW of power and 16,056 m³/h of water, Shuweihat 1 (net capacity of 1,572 MW of power and 454,600 m3 of water)
and Shuweihat 2 (1,510 MW of electricity and 454,610 m3/day of water), Umm Al Nar (gross power generation capacity of 2,450 MW
and 650,000 m3/day of water), and Fujairah F2 (2,000 MW of net power capacity and 130 MIGD of net water capacity).
* Construction is underway to develop a national grid between emirates to increase electricity efficiency, as well as link UAE with the
multi-national Gulf Cooperation Council (GCC). UAE is part of the second phase of the 1.1 Bn USD GCC regional grid project. The first
phase of the plan links Saudi Arabia, Kuwait, Bahrain and Qatar, followed by the UAE and Oman. The plan calls for each nation to first
develop its own unified power grid, and the UAE is connecting all power stations along its western coast with the central region.
* The UAE also have ambitions in the nuclear field. Nuclear cooperation programs have been signed by the UAE with several countries.
The first tranche of the Emirates nuclear civilian program was announced by ENEC (Emirates Nuclear Energy Corporation) in December
2009. A South Korean consortium assembled around Kepco and the builder Westinghouse won the bidding to develop the nuclear plant.
Gas
* The UAE’s proven natural gas reserves were 6432 Gm3 in 2009. UAE holds the fourth largest proven natural gas reserves in the
Middle East after Iran, Qatar, and Saudi Arabia. The largest reserves are located in Abu Dhabi. Sharjah, Dubai, and Ras al-Khaimah
contain smaller reserves. In Abu Dhabi, the non-associated Khuff natural gas reservoirs beneath the Umm Shaif and Abu al-Bukhush oil
fields rank among the world’s largest.
* Recent developments linking processing facilities, internationally and domestically, will promote the use of natural gas for generating
power, desalinization, and injection for oil fields. The Dolphin project, a partnership to import natural gas from Qatar, the second largest
natural gas holder in the region, was the most prominent development in the UAE natural gas sector in 2006.
* Increased domestic consumption of electricity and growing demand from the petrochemical industry has provided incentives for the
UAE to increase its use of natural gas.
* UAE natural gas exports are managed by an ADNOC subsidiary, Abu Dhabi Gas Liquefaction Co. (ADGAS), and is limited to LNG and
liquids. The National Gas Shipping Company (NGSCO) handles the shipments from the LNG plant, and operates eight LNG carriers. The
principal contract is with Tokyo Electric Power Company (TEPCO), and dates back to 1977.
* The UAE’s natural gas sector has been working with numerous countries and companies on pipeline development. One potential
pipeline from Iran, the region’s top holder of natural gas reserves, was stalled due to price negotiations. Domestically, ADNOC distributes
natural gas in Abu Dhabi, and is planning to build two natural gas distribution networks for Abu Dhabi and al-Ain with over 2,173 miles of
pipelines to supply industrial and residential needs. GASCO, manages 869 miles pipeline network in Abu Dhabi which supplies oil fields,
power plants, and petrochemical facilities. Within the Arab Gulf, the Dolphin Project is one of the most significant recent developments in
the sector. The overall volume of natural gas transported to and within the UAE will rise dramatically in line with the UAE’s natural gas
consumption growth.
ENVIRONMENT OUTLOOK
Water (Source: Unstat 2006)
Access to drinking water (%)
Access to sanitation (%)
100
98
Waste
(Source: Unstat 2007)
Municipal waste collection (%)
Municipal waste generation
6 Mt/year
Water
* Desalination water represents 80% to 90% of the domestic consumption in the UAE.
Competences divided between the ministries of water and electricity (federal for the Northern Emirates and local ministries or authorities
in the other Emirates) for the production, transport and distribution of water, and municipalities for water-treatment (collection and
treatment) and evacuation of waste water.
Waste
* There are 6 million tons of waste generated each year: 65% of household waste, 12% of municipal waste, 13% of water-treatment
waste.
Last update: Septembre 2011
YEMEN
POLITICAL BACKGROUND
Type of government: Constitutional republic
Head of State: Ali Abdullah Saleh (since 1990)
Elected in 1999, re-elected in 2006
Next poll : 2013
Key Ministers: Prime Minister: Ali Mohammed Mujawar
Minister of Electricity & Energy: Vacant since December 2010
Minister of Water & Environment: Abdul Rahman Fadhl Al-Eryani
Parliament: Assembly of Representatives with 301 seats
Elected in 2003
Next poll in 2011
COUNTRY RISK
N/A
Standard & Poor's
Country vs. World Median
(Five-year risk aggregates)
60
N/A
Moody's
50
The political and economic risks are very high and
business environment can have a very significant
impact on corporate payment behaviour.
Corporate default probability is very high.
D
COFACE
40
30
20
10
SECURITY RISK
B
Control Risks 2010
0
H
High
Overall
Financial
Yemen
Business
Political
World Median
ECONOMIC OUTLOOK
Key indicators (2010)
Population (Million)
Nominal GDP (Bn USD)
24 Urban population (2015 p)
32 HDI ranking
Exchange rate (YER/USD): 214,29 (09/2011)
31.3%
133/169
* Uncertainty surrounding the eventual resolution of the political unrest and the violence generated by it has disrupted Yemen's crucial oil
and gas exports, which account for the vast majority of both foreign exchange and central government revenue. While prolonged disruption
to Yemen's critical oil and gas exports are unlikely to cause waves on the international markets, domestically such a scenario would almost
certainly cripple the economy, resulting in a severe balance-of-payments crisis.
* With increasing disruptions to oil production and export channels, alongside slumping consumption and investment, Yemen's economic
outlook have been further downgraded, with real GDP now seen contracting 2.9% this year, before modestly recovering and expanding
1.4% in 2012.
Real GDP Growth (%)
9
7
5
3
CPI Inflation (%)
20
7,8
5,1
5,5
4,3
11,2
1,4
0,7
15,3
10
1
-1
17,8
15
4,0
2009
2010
2011f
2012f
8,7
5
-3
-2,9
-5
5,4
4,4
6,8
4,4
0
2009
Yemen
Middle East
Current Account Balance (% GDP)
20
15
12,1
8,7
4,0
5
0
-4,2
-5
-9,1
-6,7
-5,8
2011f
2012f
-10
2009
2010
Yemen
2009
2010
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
Middle East
Fiscal balance (% of GDP)
2011f
2011f
2012f
Middle East
Interest rates (%)
14,7
10
2010
Yemen
Short-term interest rate
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
External debt (% GDP)
2012f
10
30,0
6,2
4,6
5
1,7
25,0
22,6
23,7
23,2
23,8
2009
2010
2011f
2012f
20,0
0
15,0
-1,7
-5
10,0
-7,1
-10
-7,7
-9,3
-9,9
5,0
0,0
-15
Yemen
Middle East
Last update: Septembre 2011
POLITICAL OUTLOOK
* The current instability is a cause for concern. Chaos is possible, and the risk of “somalisation” is real. Alarmed by the escalating unrest, Yemen's
wealthy Gulf neighbours have been trying for months to persuade Saleh to accept a plan under which he would hand over power in return for a
promise of immunity from prosecution.After spending several months in Saudi Arabia recovering from an attack on his presidential compound,
President Ali Abdullah Saleh returned to Yemen on 23 September, raising fears of a further escalation of the country's crisis. Saleh has called for a
truce to end the fighting in the capital. He has called for early presidential and parliamentary elections for a peaceful transfer of power in his strifetorn country. The vice-president to engage in dialogue with the opposition and sign a transition deal.
The country’s myriad political and economic troubles are set to drag on and create very significant uncertainty in the coming period.
* Since 2004, Yemen is experiencing serious tensions in Saada province, opposing the Central government to the Zaidi rebels, who follow an
offshoot of Shi’a Islam, in which thousands of people, including many civilians have been killed. The area has also come under aerial bombardment
from the Saudi air force following the rebel attack against one of its border posts. The conflict has also developed a strong regional dynamic, with
Iran having been accused of assisting the rebels.
* Yemen faces considerable difficulties dealing with the challenge of Islamic radicalism and terrorism, especially Al Qaida.
ENERGY OUTLOOK
Electricity
(Source: Enerdata)
Capacity (2009)
1.3 GW
Production (2009)
Consumption (2009)
Oil
100%
Electricity matrix
(installed capacity)
in 2009
Natural gas
6.8 TWh
4.5 TWh
(Source: EIA)
Proven reserves (2009)
Production (2009)
Consumption (2009)
17 TCF
18 BCF
4 BCF
Electricity
* Yemen's total installed capacity is 1300 MW (2009). There are 16 fuel-fired plants in the country.
* Yemen's state-owned Public Electricity Corporation (PEC), under the Ministry of Electricity and Water, operates 80% of the country's power
generation capacity as well as the national power grid. PEC distributes electricity in the national grid through two 132Kv transmission systems, one
serving the northern region of Sanaa-Hodeidah-Aden, the other serving Mukalla and Hadramout.
* Currently, only 35% of the urban population and 5% of rural households have access to the national power grid. As a whole, only 42% of the total
population have access to electricity. More than 100,000 villages are not connected to the electricity grid. Electricity supply is intermittent, with
regular blackouts. The government has reached out to international development agencies for new electricity projects and there has been some
upgrade and maintenance carried out. However, the demand is still much higher than available capacity.
* To meet the electricity demand and increase access to power, the government plans to build new facilities, rehabilitate the existing facilities and
extend the distribution network. Yemen wants to invest 1.5 billion USD in the coming years to boost power generation capacity by almost 1,400 MW.
* The government is studying new means to reduce power losses through the grid by 25% in 2013.
* Three new power plant projects should be engaged this year with a total capacity of 375 MW.
* The government has also the will to develop renewable energy projects, more particularly solar energy.
* The interconnection of Yemen's electricity grid with the Saudi and Djiboutian networks is under consideration.
Oil
* Yemen General Corporation for Oil & Gas/Mineral Resources is the country's national oil company. Yemen's oil production lies mainly on
independent private companies. Nexen is the country's main oil producer, with a production of 200,000 barrels/day , 70% of Yemen's production in
2009 (EIA).
* The country's proven oil reserves are estimated at 408 million tons. In 2009, Yemen's oil production is strongly decreasing, reaching 14 million
tons.
* Yemen holds two refineries, in Aden (120,000 barrels/day capacity) and Marib (10,000 barrels/day). The government intends to lead improvement
works for these two refineries. A third refinery is to be constructed in Ras Issa (60,000 barrels/day capacity).
* Yemen holds an integrated network to bring oil to the exports terminals in Ras Issa (Red Sea) and Al Shihr (Indian Ocean). More than 75% of the
oil produced in Yemen is exported, mainly to Asian countries.
Gas
* Yemen has 17 Tcf of proven natural gas reserves (EIA), most of which concentrated in the Marib-Jawf fields. Yemen produced an estimated 18 Bcf
in 2009 and domestically consumed 4 Bcf. Prior to 2009, Yemen produced only associated natural gas.
* Success in developing the liquefied natural gas (LNG) sector is likely to increase opportunities for further natural gas exploration and production.
LNG exports are projected to offset Yemen's falling oil export revenues in 2011, when Yemen's LNG project reaches full capacity. Yemen LNG is a
private venture ( Total, Hunt, YGC, SK, Kogas, Hyundai Co).
* The country became a producer and exporter of natural gas in 2009 with the commissioning of the first line of the gas liquefaction plant (4.55
Gm³/year capacity) in the port of Balhaf on the Gulf of Aden. Yemen exported 18.9 million m³ of LNG in 2009. The first cargo of 5.1 MMcf (147,000
m³), was shipped to South Korea at the beginning of November 2009.
* Yemen LNG has established three 20-year contracts to sell LNG, with GDF SUEZ, Kogas and Total Gas & Power Ltd.
* Yemen LNG has 4 tankers with a total capacity of 13 million m³. A second liquefaction unit, currently under construction,is expected to become
operational towards the end of 2010, according to Yemen LNG. Yemen will be able to export 6.7 million tons of LNG when the project reaches full
capacity in 2011.
ENVIRONMENT OUTLOOK
Water
(Source: Unstat 2008)
Access to drinking water (%)
Access to sanitation (%)
Waste
62
52
(Source: 2009)
Municipal waste collection
Municipal waste landfilled
1.45 million tons
100%
Water: * In 2007 in Yemen, the average water consumption per capita amounted to 130 m³. The level of access to drinking water is one of the
lowest in the region, and service quality is poor. Reforms undertaken by the government since 1997 include the decentralization of urban water
supply and sanitation to local corporations, substantial tariff increases in order to achieve financial self-sufficiency, the nation-wide introduction of a
community-driven approach in rural water supply and sanitation, the passing of a new water law, and the creation of a Ministry of Water and
Environment (MWE). The MWE is in charge of formulating water policies in Yemen.
* Yemen faces an ongoing challenge with its depleting water resources, particularly groundwater, which is essential to the region's agriculture. A
Water Sector Support Program (WSSP) to improve water supply and sanitation services, agricultural water use and water resources management,
has been implemented. This 5-year investment plan supported by the World Bank participates in the efforts to meet the Paris Agreement and
Millennium Development Goal targets.In 2008 was launched a national water conservation campaign in partnership with the German development
organisation GTZ and the UN Development Programme.
Waste: * Yemen has developed a partnership with the Deutsche Gesellschaft für technische Zusammenarbeit (GTZ) on the decentralization of solid
waste management. It aimed at involving district administrations in waste management. * The National Strategy for SWM (2009-2013) adopted in
2009 has the objective of upgrading the efficiency, effectivness and coverage of SWM services and covers five aspects : legal and administrative,
institutional and organizational, financial, technical, public awarness.
MAIN REFERENCES
Political background
The Economist Intelligence Unit
www.electionworld.org
Economic situation
IHS Global Insight
UNDP
Globalis
Eurostat
Country & security risk
Standard & Poor’s
Moody’s
Coface
Control Risks
IHS Global Insight
Comments
The Economist Intelligence Unit
IHS Global Insight
Energy Information Agency
Missions Economiques Françaises
World Health Organization
CIA World Factbook
CERA