The World Bank has concluded plans to provide a $200 million seed fund to set up a Financial Intermediary Loan (FIL) scheme under the Public Private Partnership (PPP) initiative, as part of measures to address infrastructure deficit in the country.
According to the Head, Legal and Governance, Infrastructure Concession Regulatory Commission (ICRC), Mr. Joe Ohiani, some other development finance organisations have also agreed to contribute to the scheme.
Speaking at the inaugural ESQ Project Finance Summit, held in Lagos, Ohiani said eligible participating financial intermediaries, particularly commercial banks with Africa Finance Corporation (AFC) as the lead, would on-lend to qualifying private sector partners in a Public Private Partnership (PPP) project at the financial intermediaries’ risk.
He explained that the scheme is meant to provide long-term funding for infrastructure development in the country, stressing that in selecting the eligible projects, priority would be given to public investment programmes which are in accord with the National Policy on PPP and captured in the FGN’s Medium Term Sector Strategies and the National Infrastructure Plan of the National Vision 20:20:20.
In a paper entitled: ‘Governmental Promotion of Infrastructure Development,’ presented at the event, Ohiani lamented the deplorable state of infrastructure in the continent as revealed by a recent report of the World Economic Forum that though annual investment in infrastructure in Africa doubled from $17 billion to $35 billion, between 2001 and 2009, the overall infrastructure spending needs for sub-Saharan Africa is estimated at $93 billion annually over the next decade.
He noted that the annual infrastructure investment gap of $31 billion offers huge opportunities for private sector finance in infrastructure developments in Africa.
“Governments in Africa are taking active steps towards addressing the state of infrastructure in the region. The Programme for Infrastructure Development in Africa (PIDA), an initiative of the African Union, the Africa Development Bank (ADB) and the new partnership for Africa’s Development, is dedicated to facilitating continental integration through improved regional infrastructure,” he said.