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1 Setting the Legal and Policy Framework

Stage 1:
Setting the Legal & Policy Framework

Setting the Legal and Policy Framework refers to the need for a country to formulate clear policies and strategies that both attract FDI and benefit the country.

Government Policies and Strategies Legislative and Regulatory Frameworks Sector-Wide Analyses
2 Pre-Negotiation

Stage 2:
Pre-Negotiation Stage

The Pre-Negotiation Stage refers to the period during which a government identifies a particular project or investment and conducts feasibility studies and impact assessments.

Feasibility Studies Impact Assessments Tender Process and Financial Structure
3 Contract Negotiation

Stage 3:
Contract Negotiation Stage

The Contract Negotiation Stage refers to the actual negotiation of investment contracts between a government and an investor.

Prepare for the Negotiation Assemble a Negotiation Team Develop a Negotiation Position Contract Negotiation
4 Contract Implementation and Monitoring

Stage 4:
Implementation & Monitoring Stage

The Implementation and Monitoring of the Investment Stage refers to the period during which an investment project is developed and operated pursuant to the terms of the investment contract.

Monitoring Implementation Grievance Mechanisms

Roadmap

Conduct Feasibility Studies

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A government may wish to carry out feasibility studies to assess the suitability and viability of exploiting a particular resource or constructing, rehabilitating, or expanding a particular infrastructure at a given time and place. Feasibility studies are also crucial to obtain information about the resource that will help define the framework of the investment and define and quantify any risks associated with the investment to better inform the government in subsequent negotiations with the investor.

The types of feasibility studies include, but are not limited to:

  • Geological surveys to better understand the location, grade and quantity of the resource (in the case of extractive industries);
  • Hydrological studies to better understand the availability and renewability of water resources (i.e. the annual projected rainfall and recharge capacity of any underground aquifers) in the location of a proposed investment, the current and projected demands on those water resources and the impact of the proposed investment on those water resources;
  • Microeconomic studies to map out the effect on the local economy of such an investment and the potential for economic linkages; and
  • In the case of infrastructure, user demand and risk analyses to determine the demand for the infrastructure or associated public service that will be provided in relation to it and to identify and quantify the cost of potential risks in the construction, operation and maintenance of the infrastructure.

Equipped with such feasibility studies, a host government is better placed to make informed decisions as to the suitability of a large-scale investment from a budgetary, technical and geographical perspective.

Key Tools At This Stage

Useful Resources

Tendering & Procurement

Public-Private Partnerships Reference Guide: Version 2.0 Go to resource

The PPP Reference Guide is a comprehensive resource for PPP practitioners worldwide, drawing from global approaches and experiences.

The PPP Reference Guide seeks to provide advice on what PPP practitioners should know, rather than provide advice on what to do. The Guide sets out the main topics, looks at the key issues that must be addressed, and provides some of the most important references that PPP practitioners can turn to for answers and to enhance their own knowledge and understanding.

The website is also available in French and Spanish, but the document is only available in english.

It is structured into separate sections that focus on three main areas:

  1. What are PPPs, when might they be used and what are the advantages and disadvantages relative to public provision;
  2. What kind of policy, legal and institutional frameworks should be put into place to help improve their effectiveness; and
  3. What are the ways in which PPP projects can be developed and implemented.

A diverse range of case studies and institutional solutions, from all parts of the world, are presented in the PPP Reference Guide.

Feasibility Studies

CCSI Gold Benchmarking Model Go to resource

With the support of IBIS, Columbia Center on Sustainable Investment (CCSI) has developed a gold benchmarking model that allows users to compare 10 fiscal regimes of gold producing jursdictions and the possibility to add the fiscal terms of an additional mining contract.

The use of the model has been piloted with the Africa Center for Energy Policy (ACEP) in Ghana and LATINDADD in Peru. Given that the benchmarking exercise needs to be done among peer group countries, which are those with a similar geology, infrastructure and political risk, the model includes the fiscal terms of countries chosen by ACEP and LATINDADD. 

Several sensitivity tests are provided, which allow the user to understand how the project economics and government returns change with varying assumptions, such as changes in the prices or changes in costs. CCSI has not locked any cells in the model to ensure that it is highly adaptable depending on the needs/requirement of the user.

CCSI Open Fiscal LNG Model Go to resource

Having a fiscal model is key to enable countries to better understand the gas value chain and how to structure complex and capital intensive Liquefied Natural Gas (LNG) projects for the benefit of the country.

Thomas Mitro of the University of Houston and Columbia Center on Sustainable Investment (CCSI) have built the first open fiscal LNG modelthat allows users to test different LNG commercial structures, compare domestic gas use options and assess the impact of various fiscal tools along the gas value chain. A manual has been developed to explain some basic concepts around the LNG value chain and to help using this tool.

Mining and Critical Ecosystems: Mapping the Risks Go to resource

Guidelines for assessing the viability of a project in environmentally or socially vulnerable areas that can help governments determine “no-go” areas for mining. It offers a general framework that can be used to identify risk areas globally and two case studies.

Outil de cartographie de l'énergie, créé par BP Go to resource

  • Sector:  Extractive Industries, Oil & Gas
  • Source:  BP Global

L'outil de cartographie de l'énergie, créé par BP, vous permet d'interroger les données, créer des graphiques et de télécharger les rapports de la "Statistical Review of World Energy". L'App "World Energy BP"- utilisant les mêmes données de la "Statistical Review of World Energy" - permet aux utilisateurs de télécharger les données interactives à leurs appareils.

Impact Assessments

ICMM Mining Partnerships for Development Toolkit Go to resource

  • Date:  2009
  • Sector:  Extractive Industries, Mining
  • Source:  ICMM

Methodology for assessing the mining environment in which a potential project will take place as well as the social and economic impacts of the project. It includes advice on how to measure impact on local communities and a mine’s life cycle, governance-related issues, and an overview of the different actors and interests involved in investment projects.

Mining and Critical Ecosystems: Mapping the Risks Go to resource

Guidelines for assessing the viability of a project in environmentally or socially vulnerable areas that can help governments determine “no-go” areas for mining. It offers a general framework that can be used to identify risk areas globally and two case studies.

Practical Guide: Mining and Communities Go to resource

  • Date:  2015
  • Sector:  Extractive Industries, Mining, Oil & Gas
  • Source:  Communities First

Written in a question-and-answer format with dialogues among local people, the 300-page combined reference manual and interactive curriculum addresses: mines & communities, meaning the mine life cycle, the changes it brings, how to participate in an impact assessment and monitor the management plan; the rule of law, including human rights and the roles and responsibilities of each actor; conflict and violence prevention and tools supporting improved communication, negotiation and community cohesion, including consultation or community protocols and participatory land use planning; the possible benefits of mining, and tools to capture mining’s benefits, including local content strategies, community development agreements, and local financial management; ways to address and minimize impacts on land (compensation mechanisms, and resettlement), environment and cultural sites; what actions people can take locally to voice their concerns, how to document and monitor (including baseline studies, community-controlled impact assessments, joint participatory monitoring) and options for access to remedy locally, nationally, regionally and internationally.

In each of the Modules, the Guide draws on and summarizes relevant aspects of domestic law (not only the mining law, but also the Constitution, law of decentralization, land law, environmental protection law, water law, public health law, and more), regional and international human rights law, gender, industry best practice, and advice and case studies from affected communities around the world.

The Guide is available in French. An abridged summary version of the Guide is available in French and English. A folder with the Guide’s reference documents is available on Dropbox.