The team led by FEI Consulting has been chosen to develop innovative fit-for-purpose arrangements to engage the private sector as partners for four regional water utilities in Mozambique, as part of the World Bank funded project. The objective is to contract with the private sector to support the required investments, improve coverage, and other key variables that build on the operational experience of the utilities and ensure the financial sustainability of the utilities and an improved level of water supply service to customers. The final output of this assignment is to reach commercial and financial close of up to four contracts in the four utilities.
The project is divided into two phases. The Phase 1 activities include the preparation of a comprehensive due diligence assessment of each of the four regional utilities followed by the preparation of a transaction structure report which provides the financial projections for the utilities following potential scenarios. Phase 2 of the project involves the preparation of the bidding documents based on the approved structure of each transaction, and support to the utilities to evaluate the proposals, negotiate with the successful bidder and concluding a contract.
The team is currently conducting a comprehensive and multi-disciplinary due diligence assessment of the current operations of the four utilities, their investment requirements, institutional organization, and their respective legal frameworks. Based on the findings of the due diligence assessments, a financial model is developed to calculate the net present value of the transaction to ensure that the proposed project is economically beneficial for the Government. The next step would be to develop the financial results of various scenarios to determine the financial viability of the transactions to ensure that private sector partners will be attracted to the opportunity. Once the economic and financial viability has been assured, the team will then proceed to design potential contractual structures to attract the private sector.
The second phase of the project will involve developing the bidding documents needed to procure the private sector entities and to support the utilities in the evaluation of the proposals and the contract negotiations with the selected firm.
The project is funded by the World Bank.
The project is implemented in partnership with R.J. Burnside International (Canada).