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Angola: Banks’ Recovery Plan

23/02/2024

Angola: Banks’ Recovery Plan

By way of Order 1/24, of 21 February 2024, the Angolan Central Bank (BNA) has issued guidelines for the “Recovery Plans” to be submitted by financial institutions (banks) under the Financial Institutions Law. Below is an outline of Order 1/24:

1- The Recovery Plan must be submitted annually to BNA until 30 June of the year following the year to which the plan refers.

2- The Recovery Plan must have been audited by an independent audit firm.

3- Banks may apply for a dispensation from submitting the Recovery Plan by a duly grounded request to BNA presented by no later than 30 April. The dispensation is valid for 1 year only and may be cancelled at any time by BNA in case the circumstances that justified the dispensation cease to exist.

4- The Recovery Plan must provide for measures allowing the bank to restore its viability in periods of financial stress, including, without limitation, the following:

  • Increase of equity or liquidity ratios;
  • Asset disposal;
  • Debt refinancing;
  • Debt restructuring;
  • Financial support from Intra-group entities;
  • Access to external liquidity lines;
  • Changes to business model or organizational or functional modifications.

The plan must contemplate concrete measures to, inter alia, restructure business verticals, merge or spin of business units, debt restructuring including conversion of debt into equity, identification of disposable assets, etc, including a risk assessment of such measures.

5- The bank is required to revise/update the Recovery Plan in the following cases:

  • Any of the circumstances/assumptions under which the plan was prepared have changed so as to cause a material impact on the plan’s execution;
  • The bank has suffered a financial, structural or organizational modification which has a material impact on the plan;
  • Upon request by BNA.

An updated plan must be submitted within 30 days of the above events.

6- Banks must implement systems to monitor implementation of the Recovery Plan, including risks monitoring, changes to the bank’ economic or liquidity situation, market and business model modifications, among others.

7- Banks must have systems in place that allow for the timely generation of information and the sharing of such information to BNA as necessary: this includes information on (i) risks associated with intra-group loans or other transactions; (ii) liquid assets of parent company and subsidiaries, (iii) any off-balance sheet activities or transactions, (iv) exposure levels to major clients and other banks.

Rui Amendoeira, OneLegal Partner.

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Angola: Government Financing Strategy for 2024-26

19/02/2024

Angola: Government Financing Strategy for 2024-26

The Angolan government has approved its financing strategy for 2024-2026 (the “Strategy”) through Presidential Decree 52/24, of 15 February 2024. Below are the Strategy highlights:

The Strategy encompasses the so-called “direct public debt” (internal and external) which includes:

  • Debt of Central Government;
  • Debt of State-owned companies Sonangol (national oil company) and TAAG (flag carrier);
  • Sovereign Guarantees issued by the government.

The Strategy will maintain the measures adopted in the 2022-2024 period, including:

  • Prioritize debt instruments which reduce the risk of fluctuations in the interest rate or oil price;
  • Not use debt instruments which are indexed to a hard currency (USD or Euro) to Kwanza (Angolan currency) exchange rate;
  • Extend maturities of debt instruments;
  • Reduce the number of Angolan debt instruments in circulation;
  • Increase the size of debt instrument lots;
  • Maximize concessional loans;
  • Improve transparency with national and international investors.

In addition, for the period 2024-2026 the following new measures will be pursued:

  • Promote sustainable financing based on ESG principles and which can achieve the Sustainable Development Goals (SDG);
  • Avoid financing collateralized by oil or other commodities;
  • Minimize short-term debt;
  • Maximize external financing with long maturities (15-20 years);
  • Seek grace periods of at least 5 years.

The Strategy aims to achieve the following debt indicators by 2026

Rui Amendoeira, OneLegal Partner.

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Mozambican Code on Renewables

13/02/2024

Mozambican Code on Renewables

1- Ministerial Diploma 119/2023, dated November 14, 2023, approved the first Mozambican Code on Renewables (the “Code“);

2- The Code establishes the technical requirements applicable to facilities generating electricity from renewable energy sources (“Renewable Energy Facilities”), the applicable principles during their operation and the technical conditions applicable under the Manager of the National Electric System (“Gestor do Sistema Eléctrico Nacional- GSEN”); (1.2.3.);

3- The diploma complements the National Electric Net Code (“NENC”), approved under Ministerial Diploma 184/2023 of November 12, 2013 and must be interpretated having in mind some of the provisions established by the NENC;

4- According to the legislator, the Code is based on the best international practices and adopted principles established in:

  • the EU Regulation 2016/631 of April 14, 2016;
  • the South African “Grid Connection Code for Renewable Power Plants”, of 2019;
  • the Namibia Renewable Energy Grid Code, of 2020;
  • the Kenya National Transmission Code of 2016; and
  • the Grid Connection Code of Malawi of 2019.

5- The Code covers all Renewable Energy Facilities connected (using either synchronous or asynchronous technologies) to the National Electricity Transmission and Distribution Network;

6- Renewable Energy Facilities that are outside of or not connected with the National Electricity Transmission and Distribution Network are not covered by the Code;

7- The Code divides Renewable Energy Facilities into two categories:

  • (Type 1) – facilities with a connected load higher than 75 kilowatts (“kW”) and lower than 15 megawatts (“MW”) and a voltage level equal or lower than 66KVkV; and
  • (Type 2) – facilities with a connected load equal or above 15MW and a
  • voltage level higher than 66KV.

8- All new Renewable Energy Facilities must present a project for integration in the electricity network, to the GSEN for their analysis;

9- The Code outlines specific principles that apply based on whether Renewable Energy Facilities fall into Category Type 1 or Type 2;

10- It also provides specific guidelines for the operation of the Power Plants considered as relevant “(Power Plants with a capacity higher than 1 MW are classified in the Code as “relevant”);

11- The Code gives the GSEN the necessary powers to establish the principles that operators and users must follow in order to assure:

  • the cybersecurity of the energy network; and
  • the resilience of Renewable Energy Facilities to natural phenomena.

12- The operator and the owner of a Renewable Energy Facility must execute a “connection contract“ (“contrato de ligação”);

13- Any changes to the technical capacities of a Renewable Energy Facility or incidents at a Renewable Energy Facility must be notified to the operator;

14- The operator (or any other entity designated by the Ministry of Energy and Mineral Resources) is responsible for assessing a Renewable Energy Facility’s compliance with legal and technical standards and issue a certificate of conformity Without this certificate, a Renewable Energy Facility cannot start operations; and

15- The GSEN also plays a role in the conformity process by analysing all technical data, and requesting tests and simulation.

1.The GSEN is a public entity created under the Mozambican Electricity Code (Law 12/2022 of July 11, 2022), with administrative and financial autonomy and which has the functions of System and Market Operator. 2. The GSEN statutes and organic structure needs to be approved by the Mozambican Council of Ministers; until such approval takes place EDM (Electricity of Mozambique)- eventually assisted by other entities – will be the responsible for the future functions of GSEN. 3.It is expected some delay until GSEN statutes and structure are fully approved; this can create some confusion in the initial projects.

Vitor Marques da Cruz, OneLegal Partner.

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Angola: Mining and Oil & Gas Activities in Protected Areas

08/02/2024

Angola: Mining and Oil & Gas Activities in Protected Areas

By way of Presidential Decree 51/24, of 6 February 2024, the Angolan government has adopted Regulations on mining and oil and gas activities (“Activities”) in Environmental Protected Areas. Below are the Regulations highlights:

No Activities may take place in Full Natural Reserves (as defined in Law 8/20, of 6 April 2020 and Presidential Decree 50/24, of 2 February 2024).

Activities in Protected Areas (other than Full Natural Reserves) must respect a detailed list of environmental requirements as set out in the Appendix to the Regulations. These include 37 measures, broken down between exploration, production and site abandonment activities, dealing inter alia with the following topics:

  • Seismic activities
  • Sample collection
  • Installation/dismantling of infrastructure
  • Pipeline laying
  • Water use
  • Sand removal
  • Soil contamination
  • Waste disposal
  • Noise
  • Lightning
  • Fencing
  • Vehicle speed limits
  • Protection of wildlife
  • Fauna and flora protection
  • Technical staff
  • Awareness and training
  • Site abandonment and relinquishment

In order to carry out Activities in a Protected Area (other than a Full Natural Reserve), the mineral rights holder, or the National Concessionaire (ANPG) and the respective operator, in case of oil and gas exploration, must obtain a Protected Area Access Declaration from the Ministry of Environment. Provided no legal impediment exists, the Declaration is issued within 8 business days.

The Protected Area Access Declaration is valid for a period of 5 years, renewable for equal periods of time.

The companies carrying our Activities in Protected Areas must observe the following general environmental obligations (in addition to those described above):

  • Install infrastructure and equipment in accordance with the requirements of environmental legislation;
  • Use surface and underground water also in accordance with the requirements of environmental legislation;
  • Provide financial (and other) support to programs for conservation and protection of biodiversity;
  • Protect the wellbeing and cultural heritage of local communities;
  • Implement plans to prevent and fight forest fires;
  • Carry out an environmental audit prior to relinquishing the area;
  • Bear any costs of environmental restoration of the area, including environmental impact studies, environmental licensing and audits.

Companies are subject to the general surveillance of the Ministry of Environment and the Ministry of Natural Resources, Petroleum and Gas, together with the respective Regulatory Agencies;

Companies must submit quarterly reports on mitigating environmental measures adopted to the following entities:

  • Ministry of Environment;
  • Ministry of Natural Resources, Petroleum and Gas;
  • National Institute of Biodiversity and Conservation (Instituto Nacional de Biodiversidade e Conservação);
  • National Agency for Petroleum and Gas (ANPG);
  • National Agency for Mineral Resources (Agência Nacional de Recursos Minerais);
  • Provincial Government of the exploration site.

The fees charged for environmental licensing of Activities carried out in Protected Areas are allocated as follows:

  • 40% for the Treasury;
  • 30% for the National Institute of Biodiversity and Conservation;
  • 20% for the National Environment Fund;
  • 10% for the local communities.

The fines applied for violation of the Regulations are allocated as follows:

  • 40% for the Treasury;
  • 20% for the National Institute of Biodiversity and Conservation;
  • 20% for the National Environment Fund;
  • 10% for the local communities;
  • 5% for the agent who applied the fine;
  • 5% for the person who reported the infraction (if applicable).

Rui Amendoeira, OneLegal Partner.

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Angola: Environmental Protected Areas Regulations

06/02/2024

Angola: Environmental Protected Areas Regulations

Law 8/20, of 16 April 2020, – the “Environmental Protected Areas Regulations” – created a National Network of Protected Areas (Rede de Áreas de Conservação Ambiental). Regulations of Law 8/20 have now been enacted by way of Presidential Decree 50/24, of 2 February 2024. Below are the Regulations highlights:

  • Protected Areas may be created in any part of Angolan territory and the Economic Exclusive Zone by proposal of the Ministry of Environment. A Protected Area must be instituted by way of a statute;
  • Protected Areas are classified as follows:

(i) Natural Reserves;
(ii) Natural Parks;
(iii) Natural Monuments;
(iv) Habitat or Species Management Sites;
(v) Protected Landscape.

  • Natural Reserves are sub-classified as follows in terms of the human occupation and economic activities that may be carried out therein:

(i) Full Natural Reserve – No human occupation may exist;
(ii) Partial Natural Reserve – Human occupation and economic/military activities may exist, except hunting and fishing;
(iii) Special Natural Reserve – No human occupation may exist, except for sustainable activities in support of local communities.

  • No hunting, fishing or natural resources extraction activities can be carried in Natural Parks, except for scientific purposes or a State’s strategic economic activity.
  • Natural Monuments include trees, lakes, rocks or mountains with an important ecologic, aesthetic, historical or cultural value.
  • Habitat or Species Management Sites include swamps, wetlands, river estuaries, reservoirs, bays and coastal areas in general.
  • Natural Reserves and Natural Parks are administered by the Ministry of Environment.
  • Natural Monuments, Habitat or Species Management Sites and Protected Landscape are administered by the Provincial Governments or municipalities.
  • Protected Areas may be open to ecotourism activities, except Full Natural Reserves.
  • Ecotourism activities are subject to 15-year concession contracts for National Parks, and 10-year concession contracts for Natural Reserves.
  • Certain public infrastructures may be build/installed in Protect Areas, including electricity transmission lines, telecom antennas, wildlife observatories, tourism piers, border control installations, gas stations, airstrips, roads, etc.
  • The following constitute serious violations of a Protected Area:

(i) Illegal exploitation of natural resources;
(ii) Unauthorized hunting;
(iii) Commercial fishing;
(iv) Large scale deforestation;
(v) Carbon extraction;
(vi) Industrial/large scale agriculture;
(vii) Forest fires;
(viii) Any corrupt activities.

  • Each Protected Area must adopt a symbol from a representative species of the area.
  • Protected Areas must be clearly marked and identified, and may be fenced in certain circumstances.
  • Each Protected Area is ruled by a 10-year Management Plan.
  • Each Protected Area has its own budget funded by the following resources:

(i) Allocations from the State Budget;
(ii) Fines;
(iii) Fees, including from ecotourism concessions;
(iv) Gifts and donations;
(v) Other revenues from national/international protocols and agreements aimed at promoting biodiversity.

Rui Amendoeira, OneLegal Partner.

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