Mayer Brown partner Kwadwo Sarkodie and trainee Lauren Howells look at the role of lawyers in Africa's ongoing infrastructure boom.
We are a month away from Africa Climate Summit 2023, to be hosted in Nairobi, Kenya. As the consequences of climate change increasingly make themselves felt, addressing these effects, and taking steps to prevent them from worsening, rises up Africa's already long list of pressing priorities. Objectives which remain similarly urgent include managing the needs of a rapidly urbanising population, and the resulting growing demands for housing, infrastructure and power.
Given the pressing nature of these needs, large-scale projects are likely to provide part of the solution. The challenge, however, is to ensure that such projects have the resilience to cope with the consequences of an increasingly unpredictable climate, while limiting the environmental effects that projects themselves have. Projects on a massive scale can have a similarly massive environmental impact, creating real tensions with the requirements and principles of sustainable development. Resolving these tensions requires flexibility and innovation not only on the part of those conceiving, designing and constructing the projects, but also on the part of legal advisers, whose role is crucial to ensuring successful project funding, procurement and delivery.
Some of these considerations are illustrated by the development of the Eko Atlantic City project in Lagos, Nigeria. As Africa's largest city, Lagos faces particularly urgent needs for increased infrastructure, accommodation and civic amenities. Lagos's estimated population in excess of 25 million reflects a vast expansion over recent decades and continues to grow rapidly. Such growth has placed the city's existing and ageing infrastructure under considerable strain. At the same time, Lagos's coastal location restricts space for expansion.
The Eko Atlantic City project addresses this by reclaiming land from the Atlantic Ocean, to carve out space for the construction of an entirely new city district. This is planned to serve as a new business hub for the city, while also accommodating up to 250,000 people, served by dedicated power, water supply, sewerage and communications infrastructure. In this way it has the potential to support and promote the development of commercial activity in Lagos, while at the same time easing pressure on other districts of the city.
In devising and developing a project of this nature, considerations around the impact of climate and weather action, both now and in future, are clearly key. The reclaimed land on which the project is sited is protected from the Atlantic Ocean by a sea wall, the design and construction of which needs not only to support and protect the project during construction, but also to provide long-term resilience against changing and unpredictable weather patterns and rising sea levels. The project power, water and communications infrastructure similarly need to be designed and implemented with adaptability and sustainability in mind.
An example from elsewhere on the continent, which has so far proceeded with less success, is the Grand Inga hydropower project, for a series of dams on the Congo river in the Democratic Republic of Congo. This is a project envisaged on an immense scale – indeed if completed it would be the world's largest hydropower scheme. Its expected cost is some US$ 80 billion. The current status of this project is nonetheless uncertain. The World Bank cancelled its support in 2016, and despite a number of false starts replacement financing has yet to be secured.
Like the Eko Atlantic City project, the Grand Inga dam project is closely entwined with a range of environmental issues. If it were to be undertaken the project would generate huge quantities of zero-carbon electricity which could be distributed to meet energy across a range of neighbouring countries. However, the project would also have considerable environmental impacts of its own, including the alteration of water flows, the inundation of large areas (with the consequent need to relocated residents) and impacts on fisheries and agriculture.
It is clear that funding and successfully delivering the large scale projects presents great challenges. This is only enhanced by the need to ensure that such projects meet urgent development objectives while at the same time managing and mitigating environmental impact and ensuring resilience. Local regulations with regard to environmental impact must be understood and navigated, and bilateral and multilateral funders routinely impose environmental stipulations of their own. Further, with continually growing levels of public concern regarding environmental and climate impact, stakeholder engagement is ever more important. The need to strike a difficult balance becomes increasingly stark.
Yet a further complicating factor is the need to employ innovative techniques and technologies, to meet challenging environmental objectives. This may include the utilisation of sustainable materials, 'green' building practices and the deployment of advanced engineering solutions, such as sub-sea construction, 3D printing and modular construction. Each such innovation introduces potential complexities. Lawyers must engage with, and consider how best to allocate and manage, risks as to matters including intellectual property rights, regulatory frameworks and design liability.
In addition, the usual risks of delay, disruption, cost overruns and labour shortages must be allocated, mitigated and managed within the governing contract documentation. These are enhanced when the expectation of sustainable development pressures companies to commit to new and unfamiliar techniques without a real understanding of the potential teething problems that may be faced. When unexpected issues render disputes unavoidable, clear provisions governing the notification and assessment of claims, and the efficient resolution of disputes are also necessary.
As Africa's development progresses, major engineering projects paradoxically both offer a key part of the solution and present their own complications. Legal advisers are at the forefront of addressing challenges brought on by the innovative and large scale engineering necessary to deliver projects, such as Eko Atlantic City, aimed at meeting the needs of a growing and increasingly urbanising population. In understanding and managing risks around environmental concerns and considerations, effectively allocating risk and structuring appropriate dispute resolution mechanisms, lawyers have a central role in working to ensure that major engineering projects achieve their objectives while promoting sustainable and inclusive development across the continent.
Originally published in African Law & Business on 3 August 2023
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