Licungo Hospital
A shot in the arm for Maputo’s healthcare system
Background
Healthcare is one of the world’s largest and fastest growing industries. There is always a global market in which demand for capital investment in healthcare facilities is increasing, due to population growth, clinical developments, technology innovations and life expectancy. Many countries have already noted near trebling of GDP health investment over the last 40 years and expectations of further major rises to 2030. Currently, demand for new and refurbished health facilities is high in the emerging economies such as the Middle East, Africa and Asia, while construction activity in most of Europe and the USA has not recovered to the pre-2008 crash levels and the consequential austerity programme.
 
ETL’s Role in delivering the Licungo Hospital:
The Licungo Hospital will be situated in Rua Garcia de Resende 407 (Main Entrance) and Rua Pedro Nunes in Summerschield, Maputo. The land has been secured under consent from the Mozambique Government for 30 years and with various lease back options after the investment tenure. The existing building will be evaluated by the team and the final structure will be based on the required services to be provided and the availability of existing space to be utilised optimally. The site is ideally situated in a relatively quiet area and therefore ideal for healthcare services, while being easily accessible to the wider community of Maputo.
ETL has been tasked by the Government of Mozambique to deliver the above project, together with its capital partners on a design, build, own/operate and transfer arrangement with the Government of Mozambique. Our role primarily revolves around the provision of professional services by participating in partnerships with commercial partners, development banks and financial institutions. Conceptual designs will include the following wards and operating infrastructure:
             I.      Medical Ward
             II.     Surgical Rooms
             III.     Maternity Ward
             IV.    Paediatrics and Trauma Units
Facts Around the Project & Financial Arrangements
The scope of work included under this project includes:
Full feasibility studies for the renovations of all existing sections, covering technical, project economics, environmental and final designs to accommodate both social/macro- economic issues as the base case for the  project. The final report will provide the client with sufficient information for decision making on the preferred alignment and the proposed funding plan of the hospital;
Preparation of detailed engineering designs, drawings, cost estimates and tender documents for the procurement and contracting stages.
1.


2.
Gross Floor Area :
Possible Gross Leasable Area :
3 846m
3 846m
2
2
Professional Fees: 
Total Funding:          

ETL’s role includes overseeing all consulting work including programme management, professional engineering services and final procurement.
Funding Strategy :
In general, the lowermost cost of capital will be achieved by combining grant finance and a consortium led fund-raising exercise. When debt to equity percent split of 33/67 is achieved, we will maximise on loans post-construction by offering a percentage equity to contractors in order to reduce cost of total capitalisation and the amortisation schedule for the project debt is not negligible. This will be done as closely as the financial markets will permit, to the cash flows of the project.

Finance Quantum : USD 21 million, own equity contribution portion will be USD 6,3 million with final debt amount of approx. USD 14,7 million to complete the funding arrangement. Construction grants of 20% can be ceded to the project and used to offer incentives to the prime contractor for an exchange of equity and guarantees swaps, which expire on the eve of the debt maturity.

Attention to quality healthcare is an increasingly important issue in a global economy, particularly in the healthcare field. Quality healthcare is an increasingly important issue particularly in the last decade, with growing demands presented by providers, payers, patients and even policymakers in the hospital environment. ETL is honoured to have been afforded the opportunity to participate in this essential sector. Our skills base coupled with our experienced professionals will ensure that the confidence placed in the company by the Government of Mozambique is justified.
Asogan Pillay
ZAR 15 114 000.00 *Professional fee of 8% of the Project value
ZAR 224 447 000.00