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.
South Africa has an important experience in PPP projects, involving about 300 such projects on the national and provincial levels since 1994. The South African National Treasury, the body that deals with PPP projects, developed a PPP Manual to guide projects of this nature. The manual defines a PPP to be a contract between a public sector institution and a private party, in which the private party assumes substantial financial, technical and operational risk in the design, financing, building and operation of a project.
The case study describes the N4 Toll Road Project, a brownfield toll road concession of 630 km running from Pretoria, South Africa’s administrative capital, to Maputo, the capital of Mozambique and a deep-sea port on the Indian Ocean. The project was structured as a public-private partnership (PPP) between the governments of South Africa and Mozambique and a private consortium for a 30-year period. The project is the first cross-border transport PPP project in Sub-Saharan Africa and the first brownfield PPP of this scale in South Africa.
The focus of the AICD country reports is on benchmarking sector performance and quantifying the main financing and efficiency gaps at the country level. These reports are particularly relevant to national policy makers and development partners working on specific countries.
In November 2004, IFC advised the government of Mozambique on selecting a devel- oper for the Moatize coal deposit in the Zambezi Valley. The project was intended to serve as anchor project to develop the Zambezi Valley, increase economic activity, and improve local social conditions while also contributing to the country’s income.
When the prolonged civil war in Mozambique ended in 1992, water supply infrastructure had deteriorated. In 1998, the Government adopted a comprehensive institutional reform for the development, delivery and regulation of urban water supply services in large cities. The new framework, known as the Delegated Management Framework (DMF), was inaugurated with the creation of two autonomous public bodies: an asset management agency (FIPAG) and an independent regulator (CRA).
PPIAF. 2009. Toolkit for Public-Private Partnerships in Roads and Highways: N4 Toll Road from South Africa to Mozambique. Washington, DC: Public-Private Infrastructure Advisory Facility. [#4531]
Procuring Infrastructure Public-Private Partnerships 2020 is designed to help governments improve their PPP regulatory quality. By benchmarking the regulatory frameworks of economies around the world against internationally recognized good practices in procuring PPPs, this assessment identifies areas for improvement in the preparation, procurement, and management of PPPs.
This report was produced by Cambridge Economic Policy Associates (CEPA) as part of a wide-ranging research programme funded by the UK Department for International Development (DFID) that explores the factors constraining the provision of private finance to support infrastructure investment in DFID’s focus countries.
Law 15/2011 established the guidelines for the process of hiring, implementing and monitoring public-private partnerships, large-scale projects and business concessions. Decree 69/2013 approved the regulation of public-private partnerships and small business concessions.