Preparing to negotiate
For negotiations, governments should consider the following points related to negotiation and our potential support services.
- Due Diligence on companies / Know the company
Does the company have a policy on following environmental and social standards (and is it followed)? Does it have enough cash or access to credit for the project? How are the company’s public commitments translated to the negotiating table.
- Know your goals
Which is more of a priority, jobs or early revenues for the domestic investments? Or creating the right legal and policy framework for maximizing local content?
- Define a strategy
How will the government approach the negotiation with the company?
- Map your government’s capacity
Some transaction teams may be strong in legal, environmental and technical, but lack a financial modeler. Understanding where the gaps are can help focus where the negotiation support is best used.
- Inter-ministerial coordination
One ministry may take the lead, but others, such as the justice, environment and finance ministries need to be closely involved, in addition to various levels of government – national, regional and local.
- Plan ahead
Sourcing the right expert for a government takes time, usually 2-3 months.
- High level ownership
Negotiation support is not a “nice to have” or sits on the sidelines. It should play an integral role in supporting the government and thus have senior members of the government owning it. CONNEX’s experts have significant international experience and have assisted across a range of jurisdictions – tap into that expertise to get the best deal possible for the country and its citizens.
After initial discussions, then the requesting government sends an official letter of request to the Board for consideration.