Risk Management in Transport PPP Projects
In the Islamic Countries
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Economic and fiscal incentives are in place in Mozambique to attract foreign investors, which
are however not specific to PPPs, specified that they may be applied to PPPs if foreseen by the
investment law and related implementing regulation. In order to facilitate the bankability of a
PPP special conditions and incentives may be adopted in addition to the ones applicable
according to the investment law, which may relate for instance to compensation and subsidies
and facilitation of credit access or reduction of special taxes as for instance the ones applied to
the Nacala Corridor and the Maputo Port concessions (see CIP, 2013). In order to be applied to
a specific project these are however appropriately required by law to be evaluated and
monitored within the scope of the state budget accounting and reporting system.
Concerning the use of Islamic finance solutions, according to the International Comparative
Legal Guides – ICLG Project Finance 2019 report, this is not in use at present in Mozambique
and no finance solutions seem to be structured specifically according to Istina’a, Ijarah, Wakala
and Murabaha instruments.
5.3.3. Pre-tendering decision process
Screening for PPP suitability
As commented above, notwithstanding the fact that the relevant development plans may
provide some indications on the sectors or projects candidate for implementation under the PPP
model, the identification of PPP suitable projects and the decision about their
implementation under the PPP model is postponed to subsequent phases of project
development. In line with current legal provisions and practices, every single initiative to be
possibly implemented as a PPP shall undergo a specific screening procedure summarized as
follow:
 Public and/or private entities can submit to the competent line Ministries ideas
and/or feasibility studies for projects that may be implemented as PPPs . Once
finalized, these feasibility studies are submitted to the line Ministries and to the Ministry
of Economy and Finance. Line Ministries can also elaborate feasibility studies for potential
PPP projects. The costs for the elaboration of such studies are borne by the promoting
entity (either public or private). These analyses represent the basis for the promotion
of the initiative to the public and for the launching of a public tender procedure for the
selection of the contractor that will be responsible for the implementation of the
project as a PPP initiative. Accordingly, the PPP legislation attributes responsibility on
the quality and eventually integration of the feasibility studies to the line Ministry under
the supervision and support of the Ministry of Economy and Finance. The latter is
particularly responsible of providing the budgetary framework for the initiative and
decide on the granting of state guarantees, compensations and subsidies if applicable,
supervise the draft of the feasibility studies and risk/benefit sharing assessment included
in this preliminary analyses. This Ministry has ultimate responsibility in the assessment of
the financial exposure by the state in terms of long termmultiannual commitments related
to the project;
 As a result of the public tendering process a preferred bidder is identified whose proposal
is negotiated by the line Ministry with the support of the Ministry of Economy and Finance