The African Development Bank (AfDB) is taking critical steps to ensure the possibilities of closing the over $170 billion infrastructure deficit on African continent.
The bank said with an estimated financing gap of between $68billion and $108billion a year, proactive steps are required to address the gap.
The development bank is primarily looking at strengthening public private partnerships to channel more money into investment in infrastructure development in Africa.
The AfDB recently hosted discussions on how the bank can strengthen support of Public Private Partnerships (PPP) and channel greater investment towards economic and social infrastructure.
The digital workshop, ‘Designing the African Development Bank’s PPP Framework’, took place against the backdrop of an ongoing global pandemic which has caused economic slowdowns that have sharpened the already urgent need for investment into the African continent.
Five African countries account for more than half of all successful PPP activity between 2008 and 2018.
These are South Africa, Morocco, Nigeria, Egypt and Ghana. Several other African countries are in the process of developing multiple PPPs – Burkina Faso has 20 in the pipeline and Botswana has eight.
AfDB vice president, Solomon Quaynor, pointed out in his opening remarks that African infrastructure was already struggling to structure projects tailored to the private sector which balanced value for money for the public sector against affordability for the user, before COVID-19 struck.
“It is therefore imperative that hybrid solutions such as PPPs must be seen and promoted as a way of building back better, stronger, greener, by clawing back private capital to infrastructure while creating much need fiscal room for governments to address multiple other demands, including building health systems resilience,” Quayno explained.
AfDB director of infrastructure and urban development, Amadou Oumarou, presented several rationales for the bank’s effort to develop a PPP framework, including its Ten-Year Strategy (2013-2022) and a recommendation from the bank’s independent evaluation unit to scale up PPP interventions.
Private infrastructure development group CEO, Phillipe Valahu said, the Kigali Bulk Water project was a perfect example of integrated support to a PPP project which used the three pillars proposed in the AfDB’s PPP framework.
That project benefited from debt funding from PIDG alongside the AfDB, with each providing $19million of senior debt on commercial terms.