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Living the FATCA life in Africa: New U.S. tax regulations add to burden of compliance on financial institutions across Africa

Posted on 21 May 2013 by Eugene Skrynnyk

Eugene Skrynnyk

Eugene Skrynnyk (CIPM, MILE, BComm) is a senior manager and specialist for the asset management industry in the Africa Sub-Area at Ernst & Young in Cape Town, South Africa.

Eugene Skrynnyk is the Ernst & Young Senior Manager and specialist for the asset management industry in the Africa Sub-Area.

Eugene holds a Certificate in Investment Performance Measurement (CIPM), Master of International Law and Economics (MILE) and Bachelor of Commerce and Finance (B.Comm.).

 

When the U.S. Department of the Treasury (“Treasury”) and Internal Revenue Service (“IRS”) issued final Foreign Account Tax Compliance Act (“FATCA”) regulations in January of this year, there was a sigh of relief that the financial services industry in Africa could begin to digest FATCA’s obligations. However, achieving FATCA compliance remains a challenge for banks operating across Africa.

FATCA is already law in the U.S. but negotiations are under way to enshrine it in national law of countries around the world via intergovernmental agreements (“IGAs”) with the U.S. While a variety of African jurisdictions will each face unique obstacles with FATCA compliance, many in the industry share a general unease with FATCA’s scope, as well as scepticism that FATCA’s rewards (an estimated US$1 billion in additional tax revenue annually) justify its expenses. Generally, FATCA attempts to combat U.S. tax evasion by requiring that non-U.S. financial institutions report the identities of U.S. shareholders or customers, or otherwise face a 30% withholding tax on their U.S. source income. Overwhelmingly, FATCA compliance obligations apply even where there is very little risk of U.S. tax evasion and it impacts all payers, including foreign payers of “withholdable payments” made to any foreign entities affecting deposit accounts, custody and investments.

General issues in Africa

Concerns about privacy abound. FATCA requires financial institutions to report to the IRS certain information about U.S. persons. For this reason, IGAs are being put in place so that institutions could instead report information to their local tax authority rather than the IRS. In some jurisdictions, investment funds and insurance companies are permitted to disclose information with client consent. In other jurisdictions, such disclosure is prohibited without further changes to domestic law. The process to make necessary changes locally involves time and effort.

Cultural differences in Africa need to be considered. In certain situations FATCA requires that financial institutions ask a customer who was born in the United States to submit documents explaining why the customer abandoned U.S. citizenship or did not obtain it at birth. African financial institutions never pose such a delicate and private question to their customers. Even apparently straight-forward requirements may pose challenges; for example, FATCA requires that customers make representations about their identities “under penalty of perjury” in certain situations. Few countries have a custom of making legal oaths, so it would not be surprising if African customers will be reluctant to give them.

FATCA contains partial exemptions (i.e., “deemed compliance”) and also exceptions for certain financial institutions and products that are less likely to be used by U.S. tax evaders. It still has to be seen to what extent these exemptions have utility for financial institutions in Africa. For example, the regulations include an exemption for retirement funds and also partially exempt “restricted funds” — funds that prohibit investment by U.S. persons. Although many non-U.S. funds have long restricted investment by U.S. persons because of the U.S. federal securities laws, this exemption could be less useful than it first appears. It should be pointed out that the exemption also requires that funds be sold exclusively to limited categories of FATCA-compliant or exempt institutions and distributors. These categories are themselves difficult for African institutions to qualify for. For example, a restricted fund may sell to certain distributors who agree not to sell to U.S. persons (“restricted distributors”). But restricted distributors must operate solely in the country of their incorporation, a true obstacle in smaller markets where many distributors must operate regionally to attain scale.

Other permitted distribution channels for restricted funds are “local banks,” which are not allowed to have any operations outside of their jurisdiction of incorporation and may not advertise the availability of U.S. dollar denominated investments.

Challenges and lessons learned – the African perspective

Financial institutions will have to consider what steps to take to prepare for FATCA compliance and take into account other FATCA obligations, such as account due diligence and withholding against non-compliant U.S. accountholders and/or financial institutions.

The core of FATCA is the process of reviewing customer records to search for “U.S. indicia” — that is, evidence that a customer might be a U.S. taxpayer. Under certain circumstances, FATCA requires financial institutions to look through their customers and counterparties’ ownership to find “substantial U.S. owners” (generally, certain U.S. persons holding more than 10% of an entity). In many countries the existing anti-money laundering legislation generally requires that financial institutions look through entities only when there is a 20% or 25% owner, leaving a gap between information that may be needed for FATCA compliance and existing procedures. Even how to deal with non-FATCA compliant financial institutions and whether to completely disengage business ties with them, remains open.

The following is an outline of some of the lessons learned in approaching FATCA compliance and the considerations financial institutions should make:

Focus on reducing the problem

Reducing the problem through the analysis and filtering of legal entities, products, customer types, distribution channels and account values, which may be prudently de-scoped, can enable financial institutions to address their distinct challenges and to identify areas of significant impact across their businesses. This quickly scopes the problem areas and focuses the resource and budget effort to where it is most necessary.

Select the most optimal design solution

FATCA legislation is complex and comprehensive as it attempts to counter various potential approaches to evade taxes. Therefore, understanding the complexities of FATCA and distilling its key implications is crucial in formulating a well rounded, easily executable FATCA compliance programme in the limited time left.

Selecting an option for compliance is dependent on the nature of the business and the impact of FATCA on the financial institution. However, due to compliance time constraints and the number of changes required by financial institutions, the solution design may well require tactical solutions with minimal business impact and investment. This will allow financial institutions to achieve compliance by applying low cost ‘work arounds’ and process changes. Strategic and long-term solutions can be better planned and phased-in with less disruption to the financial institution thereafter.

Concentrate on critical activities for 2014

FATCA has phased timelines, which run from 2014 to 2017 and beyond. By focusing on the “must-do” activities, which require compliance as of 1 January 2014 – such as appointing a Responsible Officer, registering with the IRS, and addressing new client on-boarding processes and systems – financial institutions can dedicate the necessary resources more efficiently and effectively to meet immediate deadlines.

Clear ownership – both centrally and within local subsidiaries

FATCA is a strategic issue for the business, requiring significant and widespread change. Typically it starts as a ‘tax issue’ but execution has impacts across IT, AML/KYC, operations, sales, distribution and client relationship management. It is imperative to get the right stakeholders and support onboard to ensure that the operational changes are being coordinated, managed and implemented by the necessary multidisciplinary teams across the organization. These include business operations, IT, marketing, and legal and compliance, to name but a few. Early involvement and clear ownership is key from the start.

Understand your footprint in Africa

Many African financial institutions have operations in various African countries and even overseas, and have strategically chosen to make further investments throughout Africa. The degree to which these African countries have exposure to the FATCA regulations needs to be understood. It is best to quickly engage with appropriate stakeholders, understand how FATCA impacts these African countries and the financial institutions’ foreign subsidiaries, and find solutions that enable pragmatic compliance.

What next for financial institutions in Africa?

Negotiations with the U.S. are under way with over 60 countries to enshrine FATCA in national law of countries around the world via IGAs. Implementation of FATCA is approaching on 1 January 2014 and many local financial institutions have either not started or are just at the early stages of addressing the potential impact of FATCA. In South Africa, only few of the leading banks are completing impact assessments and already optimizing solutions. Other financial services groups and asset management institutions are in the process of tackling the impact assessment. Industry representative in Ghana, Kenya, Mauritius, Namibia, Nigeria and Zimbabwe have started engaging relevant government and industry stakeholders, but the awareness is seemingly oblivious to date. In the rest of Africa, FATCA is mainly unheard of.

Financial institutions choosing to comply with FATCA will first need to appoint a responsible officer for FATCA and register with the IRS, ensure proper new client on-boarding procedures are in place, then identify and categorize all customers, and eventually report U.S. persons to the IRS (or local tax authorities in IGA jurisdictions). Institutions will also need to consider implementing a host of other time-consuming operational tasks, including revamping certain electronic systems to capture applicable accountholder information and/or to accommodate the new reporting and withholding requirements, enhancing customer on-boarding processes, and educating both customers and staff on the new regulations. Where possible, institutions should seek to achieve these tasks through enhancing existing initiations so as to minimise the cost and disruption to the business.

Conclusion

Financial institutions in Africa face tight FATCA compliance timelines with limited budgets, resources, time, and expertise available. This is coupled with having to fulfil multiple other regulatory requirements. To add to the burden, FATCA has given stimulus to several countries in the European Union to start discussing a multilateral effort against tax evasion. The support of other countries in the IGA process indicates that some of these countries will follow with their own FATCA-equivalent legislation in an attempt to increase local tax revenues at a time when economies around the world are under unprecedented pressure. The best approach for African financial services industry groups is to engage their local governments in dialogue with the IRS and Treasury, while for African financial institutions to pro-actively assess their FATCA strategic and operational burdens as they inevitably prepare for compliance.

 

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

The Ernst & Young Africa Sub-Area consists of practices in 28 countries across the African continent. We pride ourselves in our integrated operating model which enables us to serve our clients on a seamless basis across the continent, as well as across the world.

Ernst & Young South Africa has a Level two, AAA B-BBEE rating. As a recognised value adding enterprise, our clients are able to claim B-BBEE recognition of 156.25%.

Ernst & Young refers to the global organisation of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. All Ernst & Young practices in the Africa Sub Area are members of Ernst & Young Africa Limited (NPC). Ernst & Young Africa Limited (NPC) in turn is a member firm of Ernst & Young Global Limited, a UK company limited by guarantee. Neither Ernst & Young Global Limited nor Ernst & Young Limited (NPC) provides services to clients.

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Aung San Suu Kyi to attend the 2nd Myanmar Oil and Gas Summit

Posted on 21 May 2013 by Africa Business

Aung San Suu Kyi gives speech to supporters at Hlaing Thar Yar Township in Yangon, Myanmar on 17 November 2011. Author Htoo Tay Zar. Source: Wikipedia.org

 

It is with great pleasure that we are able to announce that Daw Aung San Suu Kyi, Nobel Prize laureate and Chairperson of the National League for Democracy will be attending The 2nd Myanmar Oil and Gas Summit, Yangon, 17-18 June.

The conference and exhibition which is endorsed by the ASEAN Council on Petroleum (ASCOPE) will also be attended by a delegation from the Myanmar Oil and Gas Enterprise (MOGE), local and international oil companies and service providers form throughout the world.

To receive the latest event agenda as well as registration details, please reply to this email and my colleague will be in touch. This is the largest oil and gas event which takes place in Myanmar and we do expect it to sell out again.

SPEAKERS INCLUDE:

Ms Cho Cho Wynn, Deputy Director General, MINISTRY OF NATIONAL PLANNING & ECONOMIC DEVELOPMENT / DIRECTORATE OF INVESTMENT AND COMPANY ADMINISTRATION (DICA)

VICTORINO BALA, Secretary in Charge, ASEAN COUNCIL ON PETROLEUM (ASCOPE)

U KYAW SOE, Exploration Geologist, PARAMI ENERGY DEVELOPMENT CO LTD

DR DEVA GHOSH, Professor in Geophysics, Universiti TEKNOLOGI PETRONAS,

U Kyaw Kyaw Hlaing, Chairman, SMART GROUP OF COMPANIES

U LYNN MYINT, Vice President, NORTH PETRO-CHEM CORPORATION (MYANMAR), Former Chief Geologist, MOGE

U AUNG MIN, Freelance Consultant, ASIA PIONEER PETROLEUM EXPLORATION TEAM, FORMER MOGE

U AUNG MYAT KYAW, Secretary Geotechnical Committee MYANMAR GEOSCIENCES SOCIETY

DR ANDRZEJ BOLESTA, Economic Counsellor, EMBASSY OF THE REPUBLIC OF POLAND IN BANGKOK

CHRIS FAULKNER, CEO, BREITLING OIL & GAS

JOHN MCCLENAHAN, Ashurst, PARTNER

JAMES FINCH, DFDL Mekong Group, PARTNER

Kenneth Stevens, Managing Partner, LEOPARD CAPITAL

Sebastian Pawlita, Partner, POLASTRI WINT & PARTNERS

DR EULOGE ANICET NKOUNKOU, Minerals on Energy, INTERNATIONAL LAW OF PETROLEUM EXPERT

Please visit: http://www.myanmarsummit2013.com/

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Unreliable Power Supply Creates Huge Demand for Non-renewable Inverters, Finds Frost & Sullivan

Posted on 18 May 2013 by Africa Business

Cost competitiveness vital to expand in developing markets

MOUNTAIN VIEW, Calif. /PRNewswire/ — The global non-renewable inverter market grew steadily on the back of rising demand for reliable power and the lack of stable power infrastructure in many regions of the world. Higher disposable incomes and greater affordability in developing regions such as Latin America, as well as parts of Africa and South Asia, encourage the adoption of power inverters, especially in residential markets.

New analysis from Frost & Sullivan’s (http://www.powersupplies.frost.com) Analysis of the Global Non-renewable Inverter Market research finds the market earned revenue of approximately $1.94 billion in 2012 and estimates this to reach $2.34 billion in 2018.

For more information on this research, please email Britni Myers , Corporate Communications, at britni.myers@frost.com, with your full name, company name, job title, telephone number, company email address, company website, city, state and country.

“The need for power reliability stimulates demand for power inverter and inverter/chargers, as they are employed as part of a back-up power system involving a battery,” said Frost & Sullivan Energy and Environment Senior Industry Analyst Anu Elizabeth Cherian. “The manufacturing and commercial sectors’ increased awareness and proactive protective measures such as employing adequate back-up resources to manage business more efficiently gives a significant boost to the market’s prospects.”

The market will also gain from the escalating use of electronic equipment in boats, cars, trucks, ambulances and recreational vehicles. Power inverters and inverter chargers can meet business travelers’ or vacationers’ demand for connectivity on the go as well.

While power inverters are establishing a foothold in the power industry, the gradual pace of economic recovery and restrained spending environment are stymieing inverter manufacturers’ efforts to expand. Further, the slowdown in infrastructural build-outs in telecommunications and investments makes customers cautious about investing in inverters.

“Inverter manufacturers could attempt to offset the price issue by offering enhanced features for the premium products or lowering prices,” noted Cherian. “We know that without a solid solution, power quality issues will continue to persist.  This improved awareness of the need to be well prepared for power outages bolsters the power inverter market.”

Analysis of the Global Non-renewable Inverter Market is part of the Energy and Environment Growth Partnership Service program. Frost & Sullivan’s related research services include: Analysis of the Mexican Distributed Power Generation Market, Asia-Pacific Rental Power Market, Bangladesh Uninterruptible Power Supply Market, and Critical Energy Infrastructure Protection in Europe. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

Connect with Frost & Sullivan on social media, including Twitter, Facebook, SlideShare, and LinkedIn, for the latest news and updates.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants.

Our “Growth Partnership” supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

  • The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
  • The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

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Analysis of the Global Non-renewable Inverter Market
N839-27

Contact:
Britni Myers
Corporate Communications – North America
P: 210.477.8481
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SOURCE Frost & Sullivan

 

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“World’s Best Service” Awarded To Crystal Cruises By Travel + Leisure

Posted on 18 May 2013 by Africa Business

Magazine Readers Vote Luxury Line #1 of All Large Ships

Waiters prepare the Crystal Dining Room for dinner. (PRNewsFoto/Crystal Cruises)

LOS ANGELES /PRNewswire/ – Travel + Leisure magazine readers have voted Crystal Cruises as having the “World’s Best Service” of all large size cruise ships for 2013. With a #1 score of 95.41, this is the second year in a row the luxury cruise specialist has won the esteemed guest service award in its ship size category. A complete list of all hotel, resort, airline, and cruise line service winners is published in the periodical’s June issue.

Crystal has maintained exceptionally high service scores throughout its history, even after including gratuities as part of its all-inclusive enhancements a little over a year ago.

“We’re so pleased with the incredibly high-quality execution of our all-inclusive experience. Readers’ service scores mirror the ratings we’ve received from our own guest surveys,” says Crystal President Gregg Michel . “Our crew thrives on delivering the best Crystal Experience possible, down to the smallest detail, so it’s incredibly gratifying to see sophisticated travelers recognize that.”

Crystal is continually refining the guest experience and has made numerous enhancements to its Six-Star service over the past year. Gratuities, fine wines and premium spirits are now all included. Certified Master Sommeliers, Cheese Sommeliers, and Mixologists are always on hand to recommend perfect pairings. New Boutique Adventures and Private options have expanded onshore choices. New associations with Hollywood‘s Magic Castle and USC‘s School of Cinematic Arts offer additional learning and entertainment opportunities. New Fast Track Check-In has eased embarkation hassle. New VIP Airport Services simplify airline travel to and from ships. Maiden calls and new itineraries, including more local overnights and shorter voyages, have increased travelers’ cruise options. And, thanks to a five-year, $100 million investment in extreme makeovers of Crystal Symphony and Crystal Serenity, guests always have a plethora of chic, yet comfortable, spaces in which to enjoy Crystal’s luxurious service.

Crystal’s passion for taking care of guests in an inviting environment of extraordinary space, quality and choices has earned the company more “World’s Best” awards than any other cruise line, resort, or hotel in history, including, over the past year, Travel + Leisure‘s World’s Best Large-Ship Cruise Line (17th consecutive year); Conde Nast Traveler‘s Best Mid-Sized Cruise Line (19th year) and Cruise Ships (#1 and 2); and eight Travel Weekly Magellan Awards.

The 922-guest Crystal Symphony and the 1,070-guest Crystal Serenity sail to all seven continents, with voyages of 5-108 days in the Mediterranean, Western Europe, British Isles, Scandinavia/Baltic & Russia, North Cape & Arctic Circle, Africa, Asia, Australia/New Zealand, South Pacific, South America, Antarctica, New England/Canada, Panama Canal, Caribbean, and a sumptuous annual World Cruise. Until June 28, all-inclusive, value-priced “Book Now” fares start at just $1,630/person.

For more information and Crystal reservations, contact a travel agent, call 888-799-4625, or visit www.crystalcruises.com.

SOURCE Crystal Cruises

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A.M. Best Revises Outlook of the Issuer Credit Rating to Positive for Dubai Insurance Company PSC

Posted on 18 May 2013 by Africa Business

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.

 

LONDON —A.M. Best Europe – Rating Services Limited has revised the outlook to positive from stable and affirmed the issuer credit rating (ICR) of “bbb” and the financial strength rating (FSR) of B++ (Good) of Dubai Insurance Company PSC (DIC) (United Arab Emirates). The outlook for the FSR is stable.

The ICR positive outlook reflects DIC’s strong record of operating results, improved franchise and developing enterprise risk management (ERM). The ratings of DIC also reflect its very strong risk-adjusted capitalisation and a reinsurance programme of good quality. Offsetting these positive ratings factors are DIC’s investment concentrations.

DIC is likely to maintain a very strong risk-adjusted capitalisation over the medium term. The company’s capital base is supported by a low level of premium retention and a strong reinsurance panel. A high concentration of equity securities, particularly within the local banking sector, is of some concern and gives rise to volatility in DIC’s capital position. However, DIC’s capital position is sufficiently strong to absorb this volatility.

Despite competitive pressures in the UAE market, DIC has continued its strong growth levels with 21% achieved in 2012—well ahead of the market. DIC’s growth in recent years has improved its franchise and propelled the company to a top 10 position. However, its portfolio is indicative of the market biased towards medical and motor business on a net basis. Furthermore, underwriting performance remains strong with a good record of underwriting profitability. DIC’s combined ratio improved to 78% in 2012.

DIC’s level of ERM is considered to be improving. DIC has developed a better understanding of its risks and is integrating a capital model into its strategic planning process. There remains a disconnect between underwriting and investment risk as DIC’s investments remain concentrated in UAE banking equities. DIC has taken steps in diversifying its profile through surplus funds being conservatively invested.

Positive rating pressures can arise through embedding and integration of ERM and the maintenance of underwriting and operational performance. Considerable deterioration in its operating performance or a failure to embed improvements in ERM could add negative pressure to the current ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe – Rating Services Limited Supplementary Disclosure.

For more information, visit www.ambest.com.

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ACT hosted visionary leadership

Posted on 18 May 2013 by Thandisizwe Mgudlwa

Thandisizwe Mgudlwa

“It is only through collaboration between education, innovation and business that we will be able to take our country forward and make Cape Town a global African city of inspiration and innovation.”

So said Chris Whelan, CEO of business think-tank Accelerate Cape Town, at Friday’s Accelerate Cape Town Member’s Meeting sponsored by Deloitte. Whelan, who heads up the business organisation that counts more than 45 of South Africa’s largest corporates among its members, added that it is critical that innovation is approached as a collaborative effort. “Whether we’re developing a new product or building a future society, the key to unlocking our success as a city and country is innovation and partnership.”

According to the AC, TWhelan was joined by Dr Vincent Maphai, a business leader  and former Chairman of BHP Billiton Southern Africa. Maphai who also acts as the Education Commissioner on the National Planning Commission, detailed the key requirements for growing talent in the country in terms of what inspired the thinking of the NPC.

Maphai said that in democracies, the government is a reflection of its society. “If we are unhappy about our government’s actions, we must remember that we as civil society elected them to their positions of power. For us to succeed as a nation and be able to become the shapers of our future, we need to step up and start taking our role in the country very seriously.”

He added that active citizenry should be combined with strong leadership in order to create a government that is able to take decisions that they can also implement. “Madiba is a perfect example. His views were not based on scoring political points or promoting his own interests, but rather on what is best for the country as a whole.” Challenge of job creation and lack of education.

Maphai said that the NPC is faced with a massive dual challenge of creating jobs while also overcoming the struggling education system. He stated that while he’s in favour of the current Outcome Based Education system, the country is in dire need of well-trained, committed teachers.

“We don’t have enough skilled workers in the country, and the skills that are available come with a hefty price tag. Until we attend to the mess in education, we can forget about dealing with the issues of inequality that the unions keep talking about.”

According to Maphai, there are ways in which to bring positive change to the country. “If you’re a major company like SAB, you are fortunate enough to have a strong supply chain that enables you to train people and empower them to come and work for you. This is one contribution to addressing the disaster we are facing of a shrinking tax base and growing social grants handouts. But we should also look at requiring the individuals who receive social grants to run the gardens and bake bread in schools and then utilise the money allocated to school feeding on more important items.

“In this country, we don’t need more money or resources, of which we have more than enough. Instead, we need greater resourcefulness, especially in the form of political and social innovation.”

Maphai was joined by Dr Julius Akinyemi, head of the MIT Media Laboratory and chief adjudicator of the Innovation Prize for Africa. Akinyemi said that the mission for schools is to educate students and create new capabilities, but added that most schools fail woefully on the latter aspect. “Innovation is the enabler for creating new capabilities, allowing you to make a social impact by improving efficiencies in the environment or the lives of individuals. This focus on innovation creates an entrepreneurial environment that is very nurturing and empowering to people, leading the creation of businesses, jobs and an environment that enables us to move forward.”

He said that, in terms of the state of innovation in Africa, the problem lies not with a lack of innovation but rather in creating a nurturing environment that allows innovators to be productive. “Businesses have an important role to play. Joint innovative development, for example, creates an opportunity for the research and development team to collaborate and work side by side with businesses, incubators and venture funds in a highly productive environment. A perfect example of this model in action is Workshop 17, the University of Cape Town Graduate School of Business innovation hub based at the V&A Waterfront.”

Akinyemi added that innovation should not stop after the first positive result has been achieved. “Through constant innovation you are able to find out more about your company – what works and what doesn’t. This re-innovation process creates jobs as well as a nurturing environment and better profitability.”

In conclusionACT and Whelan said that determining the strategy, plan and call to action around fostering a culture of innovation in Cape Town will be a key point on his organisation’s agenda going forward. “We need an active citizenry and a strong government and business sector driven by innovation and partnership to further progress this city and truly achieve our objective of making Cape Town a world class destination for talented people to work and live in.”

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Oando Energy Resources Announces Additional 2,500 bopd Production Capacity From Ebendo Field

Posted on 16 May 2013 by Africa Business

About Oando Energy Resources Inc. (OER)

OER currently has a broad suite of producing, development and exploration properties in the Gulf of Guinea (predominantly in Nigeria) with current production of approximately 5,205 bopd from the Abo Field in OML 125 and the Ebendo Field. OER has been specifically structured to take advantage of current opportunities for indigenous companies in Nigeria, which currently has the largest population in Africa, and one of the largest oil and gas resources in Africa.

 

Oando Energy Resources Inc. (“OER” or the “Company“) (TSX: OER), a company focused on oil exploration and production in Nigeria, today announced results from the successful completion and testing of the Ebendo 5 well. The completion and testing of the Ebendo 5 well, which is expected to contribute an additional 2,500 barrels of oil per day (“bopd”) gross (1,069 bopd net to OER), follows the successful resumption of 3,200 bopd gross (1,368 bopd net to OER) production on the Ebendo field, as was announced on April 24, 2013.

“We’re extremely pleased to announce the successful completion of the Ebendo 5 well drilling programme, increasing our net capacity by 1,069 bopd,” said Pade Durotoye , CEO of OER. “Ebendo currently has a total production capacity of up to 7,000 bopd, but is currently subject to takeaway capacity restrictions as a result of the Kwale-Akri pipeline. In light of this, we are increasing our efforts to establish our alternative evacuation pipeline, the 53 Kilometer, 45kboepd Umugini pipeline, that will further support the development of this field and reduce our dependence on one evacuation pipeline.”

The Ebendo 5 well was spudded as a deviated appraisal/development well on October 12, 2012, mainly to appraise the intermediate reservoirs encountered by the earlier Ebendo 4 well. The Ebendo 5 well was drilled to a total vertical depth (TVD) of 11,513ft and encountered eight hydrocarbon bearing sands. A drill stem test was successfully completed on two of these sands (XVIIIc and XVIIId). Sand XVIIId flowed for 18 hours and 30 minutes during the final flow test on four choke sizes. On average, it flowed on choke 28/64″ for 3 hours and 30 minutes, with an average oil and gas rate of 1,592 bopd and 2.45 mmscf/day, respectively. Sand XVIIIc flowed for 15 hours and 50 minutes during the final flow test on three choke sizes. On average, it flowed on choke 24/64″ for 8 hours and 23 minutes, with an average oil and gas rate of 840 bopd and 4.62 mmscf/day, respectively. Oil with API gravities of 47.2 degrees and 46.4 degrees were recovered from levels XVIIIc and XVIIId, respectively. Testing of sand XV is planned to occur during production, as there was a mechanical failure during testing of this sand after the completion of the well. However, from Modular Formation Dynamic Testing (MDT) pressure sampling, the fluid gradient in level XV was 0.272 pressure per foot (psi/ft), which is indicative of oil, there was no appreciable steady decline in the pressures during the Test.

The Ebendo 5 well was dually completed and sand XV will be produced through the short string while sands XVIIIc and XVIIId will be produced through the long string via a sliding sleeve. The Acme Rig-5 was released on April 17, 2013 from the Ebendo 5 well site.

The Company further announced that a new rig, the Deutag T-26, has been mobilised and a sixth well (the Ebendo 6 well) was spudded on April 18, 2013. TVD for the Ebendo 6 well is planned to be at 10,680 ft. To date, the Ebendo 6 well has been drilled to a total vertical depth of 6,231 ft. The results from this drilling programme will enable further appraisal of the shallow reservoirs encountered in the last two wells.

As pressure transient analysis or well-test interpretation has not been carried out, all results disclosed in this press release should be regarded as preliminary and are not necessarily indicative of long-term performance or ultimate recovery. The results will be updated when additional data becomes available.

 

SOURCE Oando Energy Resources Inc.

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Abengoa to develop 132 kilometer transmission line project in Kenya

Posted on 15 May 2013 by Africa Business

– The project, financed by the African Development Bank, is worth approximately €32 million.

About Abengoa

Abengoa (MCE: ABG.B) is a company that applies innovative technology solutions for sustainability in the energy and environment sectors, generating electricity from the sun, producing biofuels, desalinating sea water and recycling industrial waste. (www.abengoa.com)

SEVILLE, Spain /PRNewswire/ – Abengoa (MCE: ABG.B), the international company that applies innovative technology solutions for sustainability in the energy and environment sectors, has been chosen by the Kenya Electricity Transmission Company (Ketraco) of the Kenyan Ministry of Energy for an electricity transmission project that includes construction of a 132 kilometer line and extension of an existing substation in Kenya, in a contract worth approximately €32 million.

The project, which is being financed by the African Development Bank, is part of the plan called “Interconnection of Electric Grids of Nile Equatorial Lakes Countries,” which is being developed in Africa and involves the construction of approximately 769 kilometers of transmission lines in Kenya, Uganda, Rwanda, the Democratic Republic of the Congo (DRC) and Burundi. Abengoa will not retain any interest in the constructed assets.

Abengoa will be responsible for the engineering, construction and commissioning, ensuring the highest levels of quality at every stage of the process. The 132 kilometer line will run from the substation in Lessos, Kenya, to the border with Uganda to connect with the Tororo, Uganda, substation. Abengoa will also extend the Lessos substation and be responsible for its design, construction and commissioning.

The project is scheduled to be completed within 18 months and handed over to Ketraco in November 2014.

This contract, together with projects previously carried out in Tanzania and Kenya, will strengthen Abengoa’s presence in the African market, reinforcing its position as a leading transmission and distribution contractor.

SOURCE Abengoa

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Canadian Solar’s Partner Romano Wins Eskom Rooftop Project in Johannesburg

Posted on 15 May 2013 by Africa Business

About Eskom

Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa. Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. Additional power stations and major power lines are being built to meet rising electricity demand in South Africa. Eskom will continue to focus on improving and strengthening its core business of electricity generation, transmission, trading and distribution.  For more information, please visit www.eskom.co.za.

About Romano Group

The Romano Group is a multi-skilled provider of a broad range of sustainable solutions, to clients who are typically large commercial, industrial or retail property owners and tenants spread throughout Africa. Romano’s value-added offer includes the design, manufacture and installation of high-quality Solar PV, ECO-Lighting, Modular Construction and Signage & Print solutions, all of which are delivered on-time at a competitive price. The company celebrated its 60th birthday in 2012 and employs 150 people. For more information, please visit www.romano.co.za.

About Canadian Solar Inc.

Founded in 2001 in Canada, Canadian Solar Inc. (NASDAQ: CSIQ) is one of the world’s largest and foremost solar power companies. As a leading vertically integrated provider of solar modules, specialized solar products and solar power plants with operations in North America, South America, Europe, Africa, the Middle East, Australia and Asia, Canadian Solar has delivered more than 4GW of premium quality solar modules to customers in over 50 countries. Canadian Solar is committed to improve the environment and dedicated to provide advanced solar energy products, solutions and services to enable sustainable development around the world. For more information, please visit www.canadiansolar.com

 

JOHANNESBURG, May 15, 2013 /PRNewswire-FirstCall/ — Canadian Solar Inc. (NASDAQ: CSIQ) (the “Company” or “Canadian Solar”), one of the world’s largest solar companies, today announced the successful expansion of its partner Romano Sustainable Solutions in Africa. Romano, a pioneer company in the South African photovoltaic (PV) industry, was recently awarded the engineering, procurement and construction (EPC) contract for a 360 kW PV solar system installation. The roof top installation will be on the Johannesburg headquarters of Eskom, the largest producer of electricity in Africa.

As one of the most experienced solar PV systems integrators in Africa, Romano designs, manufactures and installs solar PV systems to commercial clients spread throughout Africa. Most of Romano’s solar PV systems are grid-tied systems. When connected to the client side of the on-site electrical sub-station, the electricity generated is used on the site by the client. When connected to the utility side the electricity generated is exported to the national or municipal electricity grid.

“We are very proud to be involved with this prestigious project for Eskom, which we understand was awarded on the basis of our technical capability and track record, as well as the cost effectiveness of our offer,” said Alexi Romano , CEO of Romano.

“The solar energy market in Africa continues to develop and has considerable potential for growth. We are positioned to benefit through our relationships with experienced partners like Romano. We look forward to supporting their growth in this important market, including the high profile Eskom project,” said Dr. Shawn Qu , Chairman and CEO of Canadian Solar.”

 

SOURCE Canadian Solar

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Sarama Resources Continues to Consolidate its Position at the South Houndé Project in Burkina Faso

Posted on 15 May 2013 by Africa Business

TSX-V Ticker: SWA
SWA.WT

VANCOUVER, May 15, 2013 /PRNewswire/ – Sarama Resources Limited (“Sarama” or the “Company“) is pleased to report that it has been granted three new exploration permits in Burkina Faso, including one adjacent to the Company’s flagship South Houndé Project, which brings the Company’s exploration landholding in this prospective region to 1,014km².

Highlights

  • Three new exploration permits totalling 240km² granted, expanding Sarama’s total exploration land package in Burkina Faso to 3,339km².
  • The grant of a 127km² exploration permit adjacent to Sarama’s Tankoro exploration property, provides Sarama a commanding presence in the geologically prospective Houndé Belt, with a total landholding of 1,014km².
  • The grant of the Youngou Est and Nianie exploration permits complements Sarama’s existing Youngou exploration property, which borders the Youga mine of Endeavour Mining Corp in the central south of Burkina Faso, bringing the Company’s total landholding in the project area to 363km².
  • Reconnaissance exploration programs to commence in second half of 2013.

Grant of Bini Exploration Permit

Sarama has been granted new exploration permits for the Bini, Youngou Est and Nianie properties by the Ministry of Mines and Energy, bringing the Company’s total exploration property interests in Burkina Faso to 3,339km² (refer Figure 1).

The 127km² Bini exploration property (“Bini“) further consolidates Sarama’s position in the highly prospective Houndé Belt, which hosts the 7.8Moz, 170koz per annum Mana gold mine of Semafo Inc and the 2.2Moz Houndé gold project of Endeavour Mining Corp.  Bini is located centrally within the belt and is adjacent to Sarama’s Tankoro exploration property where the Company has intersected significant gold mineralisation over a 1.9km strike length at the MM Prospect (refer Figure 2).

The property is underlain by a sequence of meta-sedimentary and volcanic rocks and is interpreted to contain north-north-east trending structures, which are thought to be one of the controls on the mineralisation encountered at the Company’s MM Prospect.  Sarama anticipates commencing first-pass reconnaissance exploration activities on the property in the second half of 2013.

The exploration permit gives Sarama the exclusive right to explore for gold and associated minerals during an initial term of 3 years.  Subject to certain statutory obligations being met, the permit is renewable for a further two 3-year terms, after which time, the permit will be eligible for conversion to an exploitation permit.

Figure 1:    Sarama’s Exploration Properties in Burkina Faso

Figure 2:    Sarama’s Exploration Properties in South-West Burkina Faso

Grant of Youngou Est and Nianie Exploration Permits

The Youngou Est and Nianie exploration properties, covering areas of 95km² and 18km² respectively, lie in the extreme south of central Burkina Faso (Figure 3).  Being proximal to Sarama’s existing Youngou exploration property, the permit grants bring Sarama’s landholding in the project area to 363km².

The properties are underlain by volcano-sedimentary and gneissic rocks with the prospective sequence arranged along a north-east striking trend bounded by granite.  The 90,000oz per annum Youga gold mine of  Endeavour Mining Corp is located immediately adjacent to Sarama’s property group and within the same lithological sequence, illustrating the prospectivity of the region.

Sarama anticipates commencing reconnaissance exploration activities on the recently granted properties in the second half of 2013.

The exploration permits give Sarama the exclusive right to explore for gold and associated minerals during an initial term of 3 years.  Subject to certain statutory obligations being met, the permit is renewable for a further two 3-year terms, after which time, the permit will be eligible for conversion to an exploitation permit.

Figure 3:    Sarama’s Exploration Properties in Central South Burkina Faso

Sarama’s President and CEO, Andrew Dinning commented:

“We are pleased to have been granted these new permits in two of our existing project areas.  Our position at the South Houndé Project continues to strengthen with the addition of the Bini property and we look forward to commencing our reconnaissance exploration programs in the upcoming exploration season.

Sarama is well funded with a cash balance of approximately US$11M at the end of March 2013 and is currently finalising regional exploration programs in the south of the MM Prospect which are expected to contribute to the maiden resource estimate planned for Q3 2013.”

For further information on the Company’s activities, please contact:

Andrew Dinning or Paul Schmiede
email:  info@saramaresources.com
telephone: +61 8 9363 7600

About Sarama Resources Ltd
Sarama Resources Ltd is a Canadian company with a focus on the exploration and development of gold deposits in West Africa.  The board of directors and management team, a majority of whom are founders of the Company, are seasoned resource industry professionals with extensive experience in the exploration and development of world-class gold projects in Africa.

The South Houndé Project in south-west Burkina Faso is the Company’s flagship property and is currently the focus of an aggressive exploration program to increase the size of its maiden discovery and to test gold-in-soil anomalies located in a 30km-long structural corridor.  Recent drilling programs at the South Houndé Project have intersected significant mineralisation in several prospect areas which the Company is actively following up.  The Company has built substantial early-stage exploration landholdings in prospective and underexplored areas of Burkina Faso (>3,300 km²), Liberia (>880 km²) and Mali (>560 km²) and is aggressively exploring across the property portfolio.

Caution Regarding Forward Looking Statements
Information in this news release that is not a statement of historical fact constitutes forward-looking information.  Such forward-looking information includes statements regarding the Company’s planned exploration programs.  Actual results, performance or achievements of the Company may vary from the results suggested by such forward-looking statements due to known and unknown risks, uncertainties and other factors. Such factors include, among others, that the business of exploration for gold and other precious minerals involves a high degree of risk and is highly speculative in nature; few properties that are explored are ultimately developed into producing mines; geological factors; the actual results of current and future exploration; changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company’s publicly filed documents.

There can be no assurance that any mineralisation that is discovered will be proven to be economic, or that future required regulatory licensing or approvals will be obtained. However, the Company believes that the assumptions and expectations reflected in the forward-looking information are reasonable. Assumptions have been made regarding, among other things, the Company’s ability to carry on its exploration activities, the sufficiency of funding, the timely receipt of required approvals, the price of gold and other precious metals, that the Company will not be affected by adverse political events, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain further financing as and when required and on reasonable terms. Readers should not place undue reliance on forward-looking information.

Sarama does not undertake to update any forward-looking information, except as required by applicable laws.

Qualified Person’s Statement

Scientific or technical information in this news release that relates to the Company’s exploration activities in Burkina Faso is based on information compiled or approved by Michel Mercier Michel Mercier is an employee of Sarama Resources Ltd and is a member in good standing of the Ordre des Géologues du Québec and has sufficient experience which is relevant to the commodity, style of mineralisation under consideration and activity which he is undertaking to qualify as a Qualified Person under National Instrument 43-101.  Michel Mercier consents to the inclusion in this report of the information, in the form and context in which it appears.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Sarama Resources Limited

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