Law Nº 2/11 of January 14, 2011, Ist Series DR Nº 9
PUBLIC-PRIVATE PARTNERSHIPS LAW

Law Nº 2/11 of January 14, 2011

The Angolan Executive has been heavily engaged in a massive financial effort, involving the revamping and construction of its road, rail, airport, water and electrical energy supplies, and city sanitation infrastructures, among others, employing its own resources or having recourse to loans.

Many of the aforementioned undertakings could be developed by the private sector in close collaboration with the public sector, with the former financing the launch of projects, and even developing and completing them. The private sector could then obtain a return on investments by operating them for a specific period under concession.

The establishment of this type of relationship between the State and private enterprise ought to be undertaken in the form of a public-private partnership and, as is well-known, it has been a decisive factor in launching the development of various countries.

Our legal system accommodates some forms of relationship between the State and entrepreneurs, which could or should be addressed within the scope of a public-private partnership, but this is not the case, since no existing legislation specifically provides for it.

Considering it expedient to approve the general bases of legislation on public-private partnerships, as well as enabling the State to take better advantage of the private sector’s management capability, and to enhance the quality of public services and substantially curtail the cost of same, while generating considerable savings in the utilization of public resources and instilling the broad principles of efficiency and economy; namely, through more care being taken in assessing the possible sharing of risk and the creation of incentives in defining financially sustainable and well-managed partnerships.

The National Assembly hereby approves, by mandate of the people, within the framework of the combined provisions of paragraph b) of article 161 and of paragraph d) of Nº 2 of article 166, both enshrined in the Constitution of the Republic of Angola, the following:

PUBLIC-PRIVATE PARTNERSHIPS LAW The purpose of this law is to define general rules and regulations applicable to the intervention of the State in the determination, design, preparation, tender, adjudication, alteration, oversight, and overall monitoring of public-private partnerships

1. For the purposes of this law, public-private partnership is taken to mean, the contract or merger of contracts by which private entities, designated as private partners, undertake a long-term obligation in relation to a public partner to ensure the development of an activity aimed at meeting a collective need, and in which the financing and responsibility for the investment and its operation shall be incumbent, wholly or partially, on the private partner.
2. Public partners are:
1. The State and Local Authorities;
2. Autonomous Funds and Services;
3. Public Enterprises.
3. This law is equally applicable to all partnerships in which the equivalent to the non-public partner is a cooperative or a private non-profit institution.
4. The following, among others, constitute legal instruments for regulating collaboration relationships between public and private entities:
1. Public works concession contract;
2. Public service concession contract;
3. Ongoing supply contract;
4. Services contract;
5. Management contract;
6. Collaboration contract, whenever an existing enterprise or infrastructure is involved.
5. Public-private partnerships may involve concessions that are:
1. Wholly onerous on the State;
2. Partially onerous on the State;
3. Not onerous on the State.
6. The following are excluded from this law’s scope of application:
1. Public works contracts;
2. Public supply contracts;
3. All public-private partnerships involving an investment or contractual value of less than Kz: 500,000,000 (five hundred million kwanzas);
4. All other contracts for the supply of goods or services, covering a period equal to or less than three years, which do not involve the automatic undertaking of obligations by the public partner on termination or beyond termination of the contract.
7. Public-private partnerships promoted by public enterprises formed under corporate law must, with due adaptations, comply with the material demands and principles set down in this law. To be precise, those arising out of articles 4, 5, 6, 7, 17 and 20, with the respective monitoring and control, as exercised by the State through its shareholder role, being conducted by the relevant ministerial and regulatory departments for the sector.

1. That provided for in this law shall take precedence over any other rules and regulations relating to public-private partnerships, as defined in article 2.
2. Without prejudice to the provision in the preceding number, when the specific nature of a particular sector so justifies, special sectorial systems may be created by law to define certain guidelines that, owing to the special characteristics of the sector in question, may prove to be necessary or expedient in order to ensure the achievement of goals and compliance with general prerequisites for the setting up of public-private partnerships.
3. The special sectorial systems referred to in the preceding number may cover:
1. Economic, financial and technical principles and rules;
2. Specific procedural rules;
3. Empowerment of an entity regulating the sector to undertake the identification, preparation, preliminary appraisal, monitoring, and evaluation of the setting up of partnership projects.

The essential goals of public-private partnerships are to improve efficiency in the allocation of public resources, increase the State’s capability to carry out investments, and achieve a qualitative and quantitative improvement in service, brought about by effective controls that enable an ongoing assessment by potential users and the public partner. In public-private partnerships, the public partner’s role is to monitor and control the execution of the partnership’s mission, in order to guarantee that the underlying purposes of public interest are achieved, with, preferentially, the private partner having to finance, as well as operate and manage, the activity contracted.

1. The incorporation of a public-private partnership shall comply with the following:
1. Public-private partnerships to be approved must appear in the Public-Private Partnerships Master Plan (PGPPP), a plurianual and multisectorial document, which defines strategy as regards public-private partnerships, prepared with the collaboration of all ministerial departments, which must be approved by the Executive. Notwithstanding that however, exceptionally and for duly-established reasons, public-private partnerships not appearing in the Public-Private Partnerships Master Plan (PGPPP) may be approved;
2. Compliance, when such is the case, with rules relating to financial scheduling established in the General State Budget Law;
3. Clear presentation of partnership goals, with anticipated results defined to enable an appropriate assignment of responsibilities to the parties;
4. Configuration of a partnership model that presents, for the public partner, advantages in relation to alternative forms of achieving the same ends, i.e., by way of the traditional public procurement model, appraised in the same terms as provided for in the General State Budget Law, and one which simultaneously presents, for the private partners, the expectation of obtaining an adequate return vis-à-vis amounts invested and the degree of risk incurred and, likewise, forecast timing for execution of the contracts concerned;
5. Prior adjustment to legal regulations and other regulatory instruments, as well as obtaining the necessary administrative authorizations and opinions underpinning the project’s development, such as, among others, those of an environmental and urban planning nature, so that risks may be suitably assigned to those partners better placed to bear them;
6. Design of partnerships models that avoid or minimize, whenever possible and, excepting on the basis of adequate grounds, the probability of unilateral amendments being made to contracts, imposed by the public partner or any other facts or circumstances generating or potentially enabling restoration of the financial equilibrium obligation; i.e., non-defining of contractual installments, unpredictability of subject-matter, scope or uncertainty as to duration of commitment, as well as the undertaking of the terms and conditions in restoring that equilibrium or other compensatory systems that are excessive, unduly onerous or inadequate in light of the partnership’s actual risk profile;
7. Undertake preliminary tasks and establish requirements, in the pre-procurement phase, considered adequate to achieving an economically or socially competitive negotiation;
8. Express identification of public entity responsible for bearing costs arising out of payments to be made to the private partner, whenever it is foreseen that such will occur, as well as identification of source of respective funds.
2. Technical, economic and financial studies for public-private partnership proposals must contain a degree of detail compatible with the financial magnitude of the contract, with the ministerial department being responsible for publishing and formatting the respective schedules or manuals for the preparation and presentation of the partnership proposal, as well as disclosing the macroeconomic parameters to be adopted.
3. The partnership project must be checked with the greatest possible degree of accuracy in relation to the actual phase under review, in order to ensure that it complies with the prerequisites referred to in N° 1.
4. Environmental licensing, in particular, when required according to applicable law, must be obtained prior to launching the partnership.
5. In those cases in which proposals are presented with variants underpinned by prerequisites differing from those that served as the basis for the environmental licensing, the risks inherent to any such variant shall be borne exclusively by the private partner.

The sharing of risk between public and private entities must be clearly identified contractually and shall comply with the principle that the different risks inherent to the partnership ought to be distributed between the parties in accordance with their capability to manage those same risks at the lowest cost to projects.

1. In line with political priorities and sectorial investments, sectorial partnership programs, involving a set of linked projects, may be developed with recourse to private management and financing, in accordance with the General State Budget Law.
2. The sectorial regulatory minister may assign the coordination and technical support needed in preparing projects - whether included or to be included in sectorial programs - to specialized technical units or structures, which shall be responsible for presenting the respective preliminary study.
3. The study provided for in the preceding number must demonstrate the project’s aptitude to attract the private sector, preferentially Angolan, as potentially interested parties, but also highlight existing market conditions. The private partner may be permitted to prepare that study, provided that express authorization has been obtained from the regulatory department of the ministry concerned.

1. Before being conveyed to the Holder of Executive Power, public-private partnership projects must be appraised by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP), which is empowered to:
1. Appraise and deliberate on the procedure manual for selection and procurement vis-à-vis the State’s participation in investments and the capital stock of joint ventures with private shareholders, to be approved by executive order of the regulatory minister;
2. Appraise and deliberate on the proposal for the Public-Private Partnerships Master Plan (PGPPP);
3. Approve proposals for public-private partnership projects, presented by sectors, with a prior opinion from the regulatory ministry concerned;
4. Steer the contracting process, after consultation with the Court of Auditors, on its legal compliance and approval by the Holder of Executive Power;
5. Appraise and deliberate on contract progress reports, presented by the regulatory departments of the ministries concerned and prepared by oversight bodies.
2. The Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) shall be composed as follows:
1. Minister of Economy - coordinator;
2. Minister of Finance;
3. Minister of Planning.
3. The regulatory minister for the sector, as well as the local territorial governor, may participate in meetings held by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) to examine public-private partnership projects, when deciding where a project under review should be developed.
4. In the performance of its work, the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) shall have the support of the regulatory department of the ministry concerned, which may request specialized technical support from ministries and other State bodies, as well as hiring outside consultants.
5. The regulatory ministry concerned shall be responsible for coordinating, promoting, and publicizing the Public-Private Partnerships Master Plan (PGPPP).

1. Sectorial regulatory ministers planning to initiate public-private partnership processes, which should preferentially figure in the Public-Private Partnerships Master Plan (PGPPP), must notify the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP). They must also advise the date on which the project studies and documentation should be forwarded, according to the manuals to be created by the regulatory department of the ministry concerned, prepared in accordance with Nº 2 of article 6 of this law.
2. The study and preparation of the partnership must take into consideration the expediency of first ascertaining the private sector’s positioning in relation to the type of partnership, in light of, namely, the identification of potentially interested parties and research on existing market conditions, and, whenever applicable, updating the preliminary study referred to in Nº 2 of article 6 of this law.
3. It is incumbent on the regulatory department of the ministry concerned to appraise the prerequisites applying to the study submitted, requesting, if necessary, clarifications and additional analyses, with a view to assessing whether the partnership proposal is compatible with the Executive's goals, and to maximize its positive impact on the economy, as well as, specifically:
1. Promote effective coordination between the entities involved, with a view to imparting speed and efficiency to the respective action;
2. Propose solutions and measures to the Executive that it considers more in line with defending public interest;
3. Propose adequate legal instruments to launch and execute the partnership project;
4. Present, when requested, a justification as to the strategic motivation of the partnership, and model to be adopted, while demonstrating the inexistence of comparable alternatives boasting greater technical and operational efficiency or greater financial rationality;
5. Demonstrate the budgetary affordability of the partnership;
6. Collaborate with the entities assigned to oversee and carry out the overall monitoring of public-private partnerships.

1. The dossier to be sent to the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) must consist of the following:
1. Adjudication procedure program applicable;
2. General contract specifications;
3. Analysis of options that determined the project’s configuration;
4. Description of project and its financing model;
5. Indication of its public interest;
6. Justification for partnership model selected;
7. Statement of affordability of partnership-related costs and risks in relation to the public administrative sector’s plurianual financial scheduling;
8. Environmental licensing, when required, in accordance with applicable law;
9. Draft contract.
2. When the partnership proposal is received by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP), in accordance with Nº 1 of article 10 of this law, it must be forwarded by the regulatory department of the ministry concerned for appraisal, which shall advise the date on which its report will be submitted to the CMAPPP, taking into consideration the technical and economic dimension of the project.
3. The regulatory ministry’s report shall, in particular, look at whether the:
1. Final partnership model proposed by the sector’s regulatory ministry complies with the provisions in Nº 1 of article 6 and in article 7 of this law;
2. Obligations and rights of both private partner and public partner are adequately set out;
3. Partnership risks (Risk Matrix) are adequately quantified and assigned, as well as their potential impact on the public partner.

1. It is incumbent on the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) to pass the final resolution as to the launch of a partnership and its respective conditions, submitting its opinion to the regulatory ministry responsible for carrying out the partnership’s selection procedures and negotiating its terms.
2. The launch of the partnership shall be conducted according to applicable adjudication procedure, previously approved by the Court of Auditors, in accordance with public procurement legislation.
3. The private partner selection process may be interrupted or annulled at any time by a resolution passed by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP), as proposed by the sector’s regulatory ministry, without any compensatory right being attributed. This shall occur whenever, in accordance with appraisals of the goals to be pursued, the results of analyses and evaluations conducted up until then, and those of negotiations with candidates, do not satisfactorily correspond to the underlying purposes of public interest in setting up the partnership, including the respective affordability of the overall forecast costs.
4. Interruption of the partnership’s incorporation procedure is mandatory whenever only one candidate enters a bid for the respective tender; excepting an express and duly-based decision by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP).

1. Before signing the contract with the successful bidder, a special purpose company must be incorporated to undertake the implementation and management of the partnership’s purpose. It may adopt any of the corporate forms provided for under current legislation, excepting those cases in which, according to a duly-based criterion of the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP), other forms of companies may be permitted.
2. Transfer of the control of the special purpose company shall be conditioned to express Public Administration authorization, in accordance with the public notice and the contract, failing which the Public-Private Partnership contract shall expire.
3. A special purpose company whose annual income exceeds the figure defined by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) may only be incorporated as a public limited company, with it being able to issue securities traded on the national or international market.
4. A special purpose company whose annual income exceeds the figure defined by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) must comply with internationally-established corporate management practices and, aside from the publication of financial statements according to current legislation in Angola, it must adopt internationally-accepted accounting standards and prepare standardized financial statements, according to International Financial Reporting Standards (IFRS) rules.
5. Public Administration is prohibited from being the majority holder of the voting capital in the companies addressed in this chapter.
6. The impediment provided for in the preceding number shall not apply to the eventual acquisition of the majority holding of the voting capital in a special purpose company by a financial institution controlled by a public authority in the event of a default on financing contracts.

1. Subsequent to the successful bidder being selected and the procurement process being approved by the Court of Auditors, the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) shall submit the partnership’s project dossier, together with the draft contract, to the Holder of Executive Power for approval.
2. Subsequent to the approval referred to in the preceding number, the contract must be signed on behalf of the State by the ministerial departments of Economy, of Finance and of sectorial regulation.

Oversight and control of the execution of partnerships shall be conducted by the entities or services identified in the contracts.

1. It is incumbent on the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) and the sector’s regulatory ministry to monitor partnerships, with a view to assessing their costs and risks and to enhance the incorporating of new partnerships.
2. The regulatory department of the ministry concerned shall provide technical support for the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) in conducting the oversight, negotiation, and execution of the partnership process by:
1. Issuing opinions, gathering and making information available on costs, risks and financial impact of partnerships;
2. Receiving communications, provided for in this law, on behalf of the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP);
3. Monitoring processes underway in arbitration tribunals, providing technical support for the public partner, when such is determined by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP);
4. Filing and recording partnership-related information.
3. State services and organizations and those entities indicated in Nº 2 of article 2 of this law must provide the regulatory department of the ministry concerned with all collaboration deemed necessary, i.e., supply any information relating to partnership processes requested of them.
4. Without prejudice to the provision in the preceding numbers, when justified because of the complexity, value or public interest of a partnership, the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP), together with the ministerial departments for sectorial regulation, may appoint an extraordinary monitoring committee for the initial phase of the execution of the contract in question, by issuing a joint executive order, setting the scope of the mission assigned to the respective committee.
5. The Holder of Executive Power shall forward annual progress reports on public-private partnership contracts to the National Assembly and the Court of Auditors, which, excepting information classified as confidential, must be made publicly available via a public data-transmission network.

1. Subsequent to selection of the private partner or while respective contract is in effect, any amendments planned to be made to the terms of a partnership or to current or future commitments undertaken by the parties, either by mutual accord or on the initiative of one of the parties, in accordance with any legal or contractually applicable provision, shall be subject to the provision in the following number.
2. Whenever a State service or organization or one of the entities indicated in Nº 2 of article 2 of this law plans to study and prepare any amendment to the terms and conditions of an existing partnership contract, it must forward the dossier to the regulatory department of the ministry concerned. The latter shall then issue an opinion to be appraised by the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP), together with the dossier forwarded by the ministerial department for sectorial regulation.

1. It may be possible to restore the financial equilibrium of the respective contract should a major change occur in the partnership’s financial conditions, i.e., in the event of a unilateral amendment being imposed by the public partner on the private partner’s contractual obligations or the partnership’s essential development conditions.
2. The public partner shall be entitled to an equitable share, with the private partner, of the financial benefits arising for the latter from the development of the partnership, i.e., whenever the partnership’s financing conditions improve by way of renegotiating or substituting financing contracts.
3. The relevant adjudicatory procedural documentation or contractual title must expressly contain the prerequisites that allow for financial equilibrium to be restored in the private partner's favor or of sharing in favor of the public partner of financial benefits stemming from the partnership’s development.
4. The gauging of the partnership’s financial equilibrium must take into account the financial model constituting the respective base case, which must be appended to the partnership contract and include all income obtained by the private partner as a result of the partnership’s development, including that received from third parties under the terms of subconcession contracts or the onerous concession of space or equipment for commercial purposes.
5. Restoration of the financial equilibrium in favor of the private partner or of sharing in favor of the public partner of financial benefits shall be made in the following forms:
1. Amendment to duration of partnership;
2. Increase or reduction in financial obligations;
3. Allocation of direct compensation;
4. Combination of preceding forms or any other form that may be agreed upon by the parties.
6. Should restoration of the contract’s financial equilibrium or sharing of benefits between the public and private partner take place, the partnership amendment procedure provided for in article 17 of this law, with necessary adaptations, shall apply.
7. Whenever the private partner plans on engaging in activities not expressly provided for in the partnership contract, and should the proposals not contain the respective economic and financial forecasts, as well as an indication of share in the corresponding income, under no circumstances whatsoever shall authorization be issued by the entities which approved the signing of the partnership contract.

1. Without prejudice to compliance with legal regulations governing the realization of public expenditure, a prior joint executive order of accord is required from the Ministers of Economy, of Finance, and the sectorial regulator for the implementation of, reduction in or alteration to works not forecast or for any other decision liable, within the scope of the execution of the respective contract and the conditions defined therein, to generate an increase in forecast costs vis-à-vis the public partner or the State, excepting if the respective value does not exceed, in annual terms, Kz: 200,000,000 (two hundred million Kwanzas). The said executive order must be issued within a period of sixty (60) days, at the end of which time it shall be tacitly presumed as having been issued.
2. For the purposes of the provision in the preceding number, the request presented by the service or entity representing the public partner in the execution of the contract in question must be accompanied by respective documents stating grounds for same, and budget presented by the private partner, along with execution and payment terms and conditions.
3. In the event of the ministers referred to in Nº 1 of this article rejecting the budget presented, as well as any changes that may eventually occur in relation to a negotiating process, while having obtained the executive order of rejection from those ministers to be issued within a period of sixty (60) days, at the end of which time it shall be tacitly presumed as issued, the public partner may unilaterally, and in accordance with the terms of the contract or by law, take a decision that best safeguards public interest.
4. Should the service or entity representing the public partner in the execution of the partnership contract become aware of situations liable to generate additional costs for the public partner or the State, such as those arising out delays attributable to the public entities involved in developing the process, they must immediately communicate such facts to the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) and to the minister regulating the sector, with indications, whenever possible, of the estimated values involved.

1. Any disputes arising out of relationships established within the scope of public-private partnerships may be submitted to arbitration, in accordance with current Voluntary Arbitration Law.
2. Whenever, under the terms of an existing partnership contract, the setting up of an arbitrational tribunal is requested to resolve any dispute between the parties, the service or entity representing the public partner in the partnership contract must immediately communicate that occurrence to the heads of the ministerial departments of Economy and of sectorial regulation, while supplying all information deemed useful in monitoring the case.
3. With a view to monitoring arbitration cases, the heads of the ministerial departments of Economy and of sectorial regulation may determine, by way of a joint executive order, the setting up of a negotiating committee.
4. Periodically, the entity directly assigned to monitor the respective arbitration proceedings must be sent a copy of any case-related documents concerning the parties and the tribunal, as well as technical and legal opinions and any other relevant details for an understanding of the case, its development, or verdict.

1. The financial execution of public-private partnerships shall be guaranteed by a special public fund, called the Public-Private Partnerships Guarantee Fund (FGPPP), to be created by the Executive. The purpose of this fund shall be to provide for financial obligations eventually undertaken by the State vis-à-vis public-private partnerships that, due to issues or facts of an extraordinary economic nature, cannot be met by the special resources allocated by the State when implementing a specific public-private partnership.
2. The process of designing, structuring, and implementing the Public-Private Partnerships Guarantee Fund (FGPPP) must be conducted by the Ministry of Finance.
3. Subsequent to the setting up of the Public-Private Partnerships Guarantee Fund (FGPPP), and when it is fully operative, the Ministry of Finance must inform the Ministerial Evaluation Committee for Public-Private Partnerships (CMAPPP) on the availability of funds and any eventual disbursements to be made by same.

1. Without prejudice to compliance with legal regulations governing the realization of public expenditure, the decision to hire consultants to provide support for public-private partnerships must identify or indicate:
1. Objective reasons, set out in clear and precise terms, justifying the recruitment of consultants and corresponding restrictions on the scope of their assignment;
2. Costs incurred for the public partner or State, predictably arising out of such recruitment and its budgetary classification;
3. Procedure to be adopted in selecting outside consultants, in accordance with law.
2. Any outside consultant eventually providing consultancy services to the public partner in the preparation, evaluation, monitoring, renegotiation or other matters regarding a specific public-private partnership and who, in that capacity gains access to information not publicly available, shall be prohibited from acting as a consultant to the private partner or any entity presenting itself as a competitor within the scope of that partnership.
3. Failure to comply with the provision in preceding number shall be cause for the exclusion of the candidate from any procedure appertaining to the adjudication of the partnership or early termination of same, for reasons attributable to the private partner, without prejudice to any compensation to which the public partner may be entitled, in accordance with applicable legal or contractual terms.

Excepting provisions to the contrary, all monetary values stated herein in national currency shall be updated annually in accordance with the value of the Fiscal Correction Unit, approved by the Minister of Finance.

1. This law shall apply to:
1. All public-private partnerships which, up to the present date, have not yet been the subject of an executive order of authorization from the Holder of Executive Power;
2. Renegotiations, provided for contractually or agreed upon between the parties, of existing partnerships, within legally-permitted negotiating availability limits.

This law must be regulated, within the period of sixty (60) days. This law shall come into effect sixty (60) days subsequent to the date of its publication. Any doubts and omissions arising out of the application and interpretation of this law shall be resolved by the National Assembly.


Seen and approved by the National Assembly, Luanda, November 18, 2010.

The Speaker of the National Assembly,
António Paulo Kassoma.

Promulgated on December 20, 2010.

Let it be published.
The President of the Republic.
JOSÉ EDUARDO DOS SANTOS.