The Special Economic Zones Authority (SEZA) has announced the appointment of Maritime & Transport Business Solutions as its transaction advisor in the identification of suitable public private partnership (PPP) models for infrastructure development at its eight Special Economic Zones (SEZ).
According to SEZA Chief Executive Officer (CEO) Lonely Mogara, the transaction advisor has been mandated to determine, guide and thereafter bring to financial close viable and affordable PPP deals for the Authority. He added that SEZA will explore opportunities of collaborating with the private sector to develop primary infrastructure within its SEZs, as a way of ensuring that they are investment ready.
“PPPs can ease government off the burden of financing infrastructure development projects for both social and economic activities by exploiting the resources and expertise of the private sector. The transaction advisor will enable us to seek support and collaboration from the private sector, boost private sector participation in the national economy and foster economic growth by developing new opportunities for citizen and foreign investors,” said Mogara.
The transaction advisor will be responsible for undertaking comprehensive feasibility studies for all PPP projects, advising SEZA on the procurement of appropriate PPP services, and facilitating skills transfer through training and capacity building to enhance the competencies of SEZA staff responsible for implementing the PPP projects. Mogara explained that SEZA deemed it important to ensure that that all due diligence in respect to institutional, legal, financial and technical requirements were interrogated to determine and establish a conducive environment for private sector participation at its SEZs.
PPPs are typically long-term contracts between a private party and a government entity for the provision of public assets or services, in which the private party bears significant risk and management responsibility than the government entity. Faced with competing budgetary demands, SEZA has an opportunity to explore PPPs as a way of developing new infrastructure and upgrading existing resources to deliver on its mandate of establishing, developing, managing and regulating SEZs.
Said Mogara: “The SEZA mandate is perfectly aligned with key development strategies like Vision 2036, Economic Recovery and Transformation Plan (ERTP) and the RESET Agenda. When identifying our SEZs, we also considered the dominant economic activities in the target areas and their comparative advantages like availability of natural resources and infrastructure.”
Justifying the need for a transaction advisor, Mogara explained that successful PPP projects around the world were predicated on well-designed contracts, a stable economy, good governance, sound regulations and proper institutional capacity. The Government of Botswana has shown commitment to promoting PPPs by adopting the Privatisation Policy as well as the PPP Policy and Implementation Framework as a way of creating a conducive environment for private investors to play a greater role in procuring and financing of infrastructure projects. Government also established a PPP Unit in 2016 within the Ministry of Finance and Economic Development.