Angola annuls USD1.5b port deal with Dos Santos linked firm

Isabel dos Santos

A company with ties to Africa’s richest woman, Isabel dos Santos, is threatening to seek compensation from the Angolan government after losing concession rights to build a USD1.5 billion port near the capital, Luanda.

The decision to withdraw the contract to build and operate the Barra do Dande port appears to be yet another step by President Joao Lourenco to ease the grip of his predecessor’s family on the nation’s economy. Lourenco dismissed 45-year-old Isabel dos Santos as chairwoman of state oil producer Sonangol last year before firing her brother, Jose Filomeno, as head of Angola’s $5 billion sovereign wealth fund.

Atlantic Ventures SA obtained the contract a week before Isabel’s father, Jose Eduardo dos Santos, stepped down as president in September after ruling for 38 years. The company said the project was to be funded entirely through private investors and would take 24 months to complete.

“The revocation of the concession has the characteristics of an expropriation under Angolan and international law,” Atlantic Ventures said in an emailed statement sent Monday by Isabel dos Santos’s spokesman in Lisbon. “With this unfounded decision, the Angolan state is exposed to the payment of compensations as per Angolan and foreign law.”

Isabel dos Santos owns a direct stake in Atlantic Ventures, Job Constantino, a Port of Luanda official, said in comments broadcast on Luanda-based MFM Radio yesterday. Her spokesman declined to comment on the size of her stake.

Lourenco is one of several African leaders who have pledged to fight graft and dismantle corrupt business networks that have undermined state revenue. He said earlier this year that his government would review the deal. “A project this big, that involves billions, with sovereign guarantees, can’t be handed on a platter,” he told reporters in January.

Atlantic Ventures said it hadn’t been notified of the decision to revoke the contract and had already held meetings with private investors and government officials, and organized a road show with international banks to promote the project.

“Atlantic Ventures now awaits the necessary information from the Angolan executive regarding the consequences of its decisions, after which it will make the necessary decisions to protect its interests,” it said in the statement.

Last week, Angola published a presidential decree awarding Wuhan- based Ghezouba Group Company Ltd. the sole rights to build a hydroelectric power plant estimated at $4.5 billion, a project backed by the Industrial and Commercial Bank of China. The decree means that two other companies believed to have links to Isabel dos Santos, CGGC & Niara Holding Limitada and Boreal Investment Ltd., have been removed from the project. Henrique Almeida, Bloomberg