PPP – N4 Toll Concession
The N4 toll road is a high-profile infrastructure PPP between the governments of Mozambique and South Africa, and a private company, Trans African Concessions. The main focus is the N4 toll road from Witbank in South Africa to Maputo, the capital city of Mozambique. The term of the concession is 30 years, after which the ownership of the infrastructure asset reverts back to the two governments. The value of the project was approximately $466m.
The N4 was financed through a combination of equity finance by the private partner, plus loan finance from a range of the major financial houses in the sub-continent – primarily from South Africa. A percentage of the finance was also provided by the Development Bank of South Africa and a mine workers pension fund. Both governments agreed to underwrite or guarantee the debt in case of TRAC’s inability to service the loan.
Being the shortest link to an export harbour for South Africa’s industrial heartland, the N4 corridor has quite rapidly evolved into a major intersection for Southern Africa’s linkages with the world economy from an outward focus. From an inward focus, hundreds of thousands of Mozambicans use the road to access work and opportunities in South Africa.
The construction was handled by the private partner, which was a consortium that included three construction companies. Labour and sub-contractors were sourced from both South Africa and Mozambique.
