Veolia AMI

completed

Veolia AMI is a French holding company with water, wastewater and electricity operations exclusively in Africa, the Middle East and India (AMI). The largest operations are in Gabon and Morocco although Veolia AMI also has operations in other countries. Veolia AMI aims to broaden its portfolio of operations, and provide a range of services in the water sector to the Africa and Middle East regions and India, dealing with either the entire water system of a country or parts of it, including distribution services (either at the municipal or at the national level), operation and maintenance of water treatment plants (including desalination plants) and water reuse plants; and industrial outsourcing. When appropriate, Veolia AMI may also provide electricity services in conjunction with water services. To further expand its portfolio of investments in the target regions, Veolia AMI will significantly increase its capital. Its parent company, Compagnie Generale des Eaux (CGE) is planning to inject a significant amount of equity in Veolia AMI, which will allow further expanding its portfolio of investments in the target regions. Veolia AMI has invited both IFC and another international financial institution (IFI) to provide equity, by capital increase. IFC’s investment would be €25 million.In addition to equity, Veolia AMI has asked IFC to assist one of its subsidiaries to raise debt financing and obtain credit enhancement with suppliers. In June 1997, Veolia AMI was awarded the concession for the production, transmission and distribution of electricity and water services in Gabon for a twenty year period, through a competitive tender. The concessionaire, SEEG (Société d’Eau et d’Electricité du Gabon) is 51% owned and controlled by Veolia AMI. From the time of its privatization until present SEEG financed all of its investments with equity and cash flow from operations only. It is now negotiating a debt package with local banks. It hopes to secure the debt on a non-recourse basis but would need guarantees to extend the maturity from seven to ten years. It is therefore considering obtaining from IFC a partial credit guarantee to increase the tenor or the debt from seven years to ten years.