Fleurette Group and Andrade Gutierrez to Create Infrastructure Joint Venture to Develop Projects in the DRC
KINSHASA, Democratic Republic of the Congo, April 23, 2014 /PRNewswire/ --
- Creation of Joint Venture to identify and develop infrastructure projects in the DRC.
- Focus on power, rail and road projects to help accelerate the DRC's economic development.
- Expected to generate significant employment and drive economic growth through increasing power supply and enhancing road network.
Fleurette Group (Fleurette), one of the largest private investors in the Democratic Republic of Congo (DRC) and Andrade Gutierrez, one of the world's leading construction companies, today announce they have signed an agreement to form a Joint Venture (JV) to develop new infrastructure projects in the DRC.
While considerable progress has been made in the DRC to develop the economy after years of conflict, the country remains in need of significant investment in its infrastructure to further its economic development. The JV will target opportunities in the power, rail and road sectors, all of which will hugely benefit from new investment.
The need for infrastructure investment in the DRC
- Major power shortages force the DRC to import energy from outside the country while total installed capacity has remained level for 20 years, despite significant increases in demand, both industrial and commercial. In the Katanga region, the engine of the DRC's economic growth, power supply is c. 500MW (including imports from Zambia). Demand in the region is currently 650-750MW, and is expected to reach 1,000MW with the doubling in mining output planned in the next five years. With mining activities already constrained by power shortages and the expected increase in the needs of the general population, there is an urgent need for new power supply.
- The DRC's rail network is of primary importance for shipping mineral commodities out of the DRC to ports in east, west and southern Africa. Road infrastructure will soon be insufficient to transport the increased mining output (currently c. 400 trucks per day). An improved rail system will significantly reduce transportation costs for the resources sector and vastly increase general transport efficiency for the entire country, taking trucks off the road system.
- Finally, the DRC's road network has fallen into serious disrepair as a result of its extended period of conflict. Sealed roads comprise a mere 3,000 km of the country's total road network of over 30,000 km. It is estimated that just 42% of the country's roads are in a condition good enough to support freight transport. The World Bank estimates that repairs and maintenance on the DRC's existing road networks will require roughly US$400 million per year.
Fleurette Group and Andrade Gutierrez Infrastructure JV
A combination of Fleurette and Andrade Gutierrez is ideally suited to developing infrastructure in the DRC. Fleurette is one of the largest private investors in the DRC and has been investing in the country for 17 years. It is a proven, committed investor in the country with core expertise in executing projects in mining and related sectors. Fleurette also has proven track records of successful cooperation with key stakeholders and partners in the region.
Andrade Gutierrez is a leading global construction company with over 65 years' experience in developing engineering projects worldwide. Andrade Gutierrez has operating experience in 10 African countries. It provides expertise and support along the development and post construction life cycle, including operation and maintenance. Key projects successfully completed by Andrade Gutierrez include in the past 12 months the delivery of 200MW of thermal power plants, four airports and several roads projects in sub-Saharan Africa.
The JV by Fleurette and Andrade Gutierrez has appointed Renaissance Capital, a leading frontier markets investment bank, as financial advisor. The JV will evaluate different investment opportunities and projects in which the companies can work together to develop and then take the project forward to completion. Andrade Gutierrez will act as the lead developer in any chosen project. The JV is not seeking a partner to bring an existing project to fruition.
Dan Gertler, Senior Advisor to the Fleurette Group, said:
"The DRC has made real strides in the past few years in developing its economy and with additional investment in the country's infrastructure the DRC will be able to reach its full potential. These types of investments require commitment, knowledge and expertise and I am confident that, in working with a proven developer of infrastructure assets in emerging markets such as Andrade Gutierrez, we have found the right partner. The DRC needs power, rail and roads. These are projects that have the potential to fundamentally change the lives of the people in the DRC and we very much look forward to progressing the projects we are looking at to completion, together with DRC and the Katanga administration."
José Nicomedes, CEO for Africa/Europe/Asia, Andrade Gutierrez said:
"We have been building our presence in Africa for some time and now operate in 10 African countries. We are delighted to have found a partner in Fleurette with a proven track record of operating successfully in the DRC. It is very clear there is a real need for investment in infrastructure in the country and I believe by working with Fleurette, we can successfully bring these much needed projects to completion, creating significant employment and training opportunities for the people of the DRC and enabling major industries such as the resources sector to truly capitalise on the unique opportunity the DRC offers."
Moises Katumbi, Governor of Katanga Region, said:
"I strongly welcome this announcement as it is a major statement of intent from a proven investor in the DRC and a proven developer of major infrastructure assets in Africa. It is vital we invest in much-needed infrastructure not only in the Katanga region but across the DRC. This is the kind of investment we need - it will generate employment and drive economic growth in the country. I look forward to working with both Fleurette and Andrade Gutierrez in the future."
About Fleurette Group
The Fleurette Group is an entrepreneurial business with significant investment in diverse sectors, including natural resources, agriculture, and technology. Fleurette has a proven track record of co-operation with other businesses, including the state-run mining company Gecamines. Fleurette specializes in successful industrial projects in high-risk environments. It is an active, full-scale planner in each venture, providing everything from managerial expertise to engineering consulting to financial planning, and ensuring the on-time and on-budget completion of each project. In January 2014, Fleurette joined the EITI (Extractive Industries Transparency Initiative), a global initiative to improve governance in resource-rich countries through the verification and full publication of company payments and government revenues from the oil, gas and mining industries.
A Leading Employer, Investor and Taxpayer
As one of the largest private companies in the country, the Fleurette Group has invested over $1.5 billion dollars in the acquisition and development of mining and other assets in the DRC. Through its ongoing commitment to the country's economy, Fleurette has helped to bring billions in related investments into the DRC. By bringing billions of dollars in private investment to the country, the Fleurette Group's subsidiaries and partnerships support some 20,000 jobs in the DRC, making the company one of the nation's leading employers. Moreover, the Fleurette Group's partnerships and joint ventures are amongst the DRC's leading taxpayers, contributing significant revenues to the States in 2012. These tax payments help to support basic public services, such as schools, roads, and health clinics.
A Long-Term Commitment to the DRC
Dan Gertler, Senior Advisor to the Fleurette Group began investing in the DRC's diamond sector in 1997, at a time when few other international companies were willing to risk doing business in the war-torn nation. Over the past decade, the Fleurette Group has expanded from iron ore, copper and cobalt to agriculture, oil and gas. A citizen and resident of Israel and the DRC, Gertler is committed to developing the natural resources of the country, while investing in the Congolese people and their communities.
The Largest Charitable Organization in the DRC
Through the Gertler Family Foundation and its own infrastructure and social welfare projects, the Fleurette Group has contributed millions of dollars to the betterment of the DRC and its people. These charitable ventures focus on core areas that include health, education, infrastructure, emergency assistance, food security, and cultural development.
About Andrade Gutierrez Group
Andrade Gutierrez Group, with its diverse experience built over 65 years' experience in Brazil and abroad, is proud to actively participate in the economic and social development of the countries where it operates. It ranks among the largest groups in Brazil and as one of the leading infrastructure conglomerates in the World. The Group operates in diversified business areas, such as Engineering and Construction, Energy, Concessions, Telecommunications and Health.
The Group prioritizes environmental preservation and the safety and health of employees and communities, thus, promoting quality of life and complying with all social responsibility requirements.
AG stands out for its ability to manage large projects and offers complete solutions in the projects it implements. The Group acts as an integrator and entrepreneur. Andrade Gutierrez participated in the construction of projects accounting for more than 27,000 MW, about 30% of the installed capacity of hydroelectric plants in Brazil and 4,000 MW of thermoelectric power plants. Currently, the company leads the construction of the 11,233 MW Belo Monte hydroelectric Plant.
Today, more than a large construction company, Andrade Gutierrez is fully prepared for providing integrated solutions throughout the construction supply chain based on expertise, infrastructure, strategic planning, advanced patterns, cutting-edge technology, creativity, and a skilled team, obtaining excellent operating results and ensuring the projects' economic performance.
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Pedro Neves, Managing Director, Structured Business for Africa, Europe and Asia
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SOURCE Fleurette Group