Mozambique has seen rapid economic development in the last 15 years. High quality infrastructure services, including improved water supply and sanitation services are recognized by the government as an important part of a sustainable development strategy. Still only approximately 47% of the Mozambican population has access to an improved water source, and only 17% has access to adequate sanitation. Consequences on living conditions are multiple, ranging from poor health to lower productivity due to the time needed to fetch water.
Two public Asset Holding Companies – FIPAG (“Fundo de Investimento e Património de Abastecimento de Água”) in the 13 largest cities, and AIAS (“Administração de Infraestruturas de Abastecimento de Água e Saneamento“) in secondary towns, owns the water and sewerage assets. Besides them, informal small-scale independent water providers own and operate local piped water systems in urban areas without a formal license. In Maputo alone, there are 450 such operators that provide water to 350,000 people. In rural areas, community-based organizations are in charge of maintenance of water infrastructure.
The Mozambique government is challenged with the creation opportunities for the domestic private sector in water infrastructure as well as reinvigorating the role of the private sector in regional water operations outside Maputo. FIPAG retained IFC (“International Finance Corporation”) a member of the World Bank Group, which is the largest global development institution focused exclusively on the private sector in developing countries, to advise on viable strategic options for enhanced private sector involvement and to assist in the implementation of downstream transactions.
Burnside was hired to oversee a consulting team to assist IFC in providing the government with practical guidance to the options available for private sector involvement under the current delegated management model for regional operations and for the Greater Maputo area, after the expiry of the current lease contract, both with a special focus on domestic industry participation. Starting with an assessment of FIPAG current operations which included visits to each of the regions, a review of current and past data and a review of water treatment and distribution facilities.
The consultant team met with domestic and international private sector companies to understand concerns as they relate to long-term engagement in the Mozambique water operations industry. Burnside directed and worked with the consultant team to undertake an appraisal of business plans, financial projections and investment programs of the three regional utilities, identify suitable risk allocation models as well as viable strategic options for private sector involvement for Maputo, the three regions and a new bulk water supply scheme from the Corumane Dam.
An assessment document was completed containing an analysis and overall development of options for consideration by the Government of Mozambique for public-private partnerships in Maputo, and Northern, Southern and Central Regional operations of FIPAG.
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