Boston, MA -- (ReleaseWire) -- 03/06/2014 -- We have upgraded our medium-term forecast for Cameroon's construction sector based on the successful awarding of six contracts under the 20 project public private partnership programme, as well as news that several major projects are expected to enter construction in 2014. We now expect growth of 11.4% in 2014, with an annual average rate of 10.0% between 2014 and 2016.
Cameroon's construction sector is expected to post strong growth, and this is further boosted by the initial success of its PPP programme. The government is reinvesting oil wealth in infrastructure. At the same time we are seeing heavy industry companies taking a build-your-own approach to necessary infrastructure. Heavy investment in expanding cement capacity indicates the scale of the infrastructure build-up and the expectation of continued growth. Expanding local cement supplies should also help to bring down industry costs, which have been highly volatile.
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We have now priced in the additional upside presented by the 20 PPP projects announced by Cameroon's Ministry of Economy, Planning And Regional Development (MINEPAT). The projects, which range from transport to social and industrial infrastructure, were due to start in 2013. Cameroon has been ready to offer PPPs since the PPP Act was passed in 2006. However, this is shaping up as the biggest single PPP programme to-date in the country.
With the first six project successfully awarded, we have upgraded our growth outlook from 2014. We have also increased our growth expectations based on the start of construction of a number of projects, including the Limbe port, the Mbalam iron ore project and the Katsina Ala power plant. The following planned, and several other ongoing projects are supporting our positive outlook:
- In August 2013, authorisation was given to UK energy company Joule Africa for construction of their 850MW hydropower plant on the Katsina Ala River. A full feasibility covering the financial and engineering side of the project was carried out by Lahmeyer International over a 12-month period. The first phase will see the construction of a 450MW unit, with an estimated cost of US$1bn. The project is expected to provide a significant boost to the construction sector over the medium term and would greatly enhance electricity capacity in Cameroon, expanding by 40% from current levels.
- In late August it was reported that construction would start on a new deepwater port in Limbe in November 2013, following the completion of feasibility studies. The port will cost US$880mn in total, with the first phase due to cost US$72mn, which will take the port to a depth of 17 metres with the capacity to handle 200,000 containers per year. Also at the port of Limbe, the PPP for the construction of a cement export terminal was awarded in June 2013, to a consortium of LPDC (Limbe Port Development Corporation) and Guemgang.
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