Bridging the gap: scaling up investment into Africa’s infrastructure

11 April 2014 | Minutes

Sponsors: NEPAD Business Group, African Business Roundtable

Panelists: AfDB representative, Agnes Dasewicz, (Private Capital Group of Africa, USAID, Power Africa), Alfred Liu (private sector), Sipho Moyo (ONE)

CHAIR: Eloho Otobo (Former Director, United Nation Peace Building Commission),


  • how best using the existing mechanisms to fund infrastructure?
  • Sovereign wealth funds new instrument available
  • Can’t scale up infra without developing ability of governments to manage it
  • Need to increase capacity to be able to train to manage and repair infrastructure
  • Scaling up must be a deliberate effort


  • over last 7 years heavily invested in infra, private sector and PPPs, 49 projects
  • mobilised 30bn investment through 3bn
  • trying to learn, number of financial constraints
  • proposal to set up new vehicle, Africa 50, to mobiles additional investment incl crowding in non traditional sources
  • 100bn per year estimated need
  • actual investment 50bn, mostly public resources and DFIs, gap continues to grown
  • Africa’s mega projects need mega resources
  • DFIs and governments face financial constraints
  • Lack of early stage project development capital
  • Lack of prepared projects prevents investment
  • Create a new vehicle with new DNA
  • An African initiative, credible and apolitical, flexible, efficient and commercial
  • Africa 50 independent investment vehicle
  • Project development business line, providing steady deal flow of well-structured projects
  • Project finance business line
  • Funding structure – target investment vehicles, mainly from Africa, but able to leverage local capital markets
  • Collaboration platform, work through the life cycle of a project – early stage bankability, TA etc – an integrated approach
  • From idea stage to financial flow on average 7 years plus 3 years of construction
  • Incubated by AfDB
  • Attractive asset class, provides robust, safe and steady returns
  • Secured cash flows backed by contractual agreements
  • Senegal and Kenya examples, South Africa
  • Launch Q2 2014, pipeline of transformational project

Chair: Q on capacity building? How will the bank mobilise the 50bn?

  • in Senegal we realise the best way to achieve capacity building to work with the government, also work with traditional donors with projects
  • gap is huge, 50bn, trying to demonstrate to international market that you can invest in infrastructure in Africa – leverage by a factor of 10
  • 3bn still a substantial amount


  • promote economic growth in Africa
  • 5 year initiative
  • will result in private sector and gov continue to work together for longer
  • Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania focus countries
  • Hope to replicate experience in other countries
  • Whole of US government approach – many agencies in the gov who has tools to work with the private sector and governments
  • eg OPIC direct investments, USAID transaction advisers
  • support investment in Africa’s energy sector, 7bn in support over next 5 years
  • trying to coordinate to focus on these countries and power transactions
  • AfDB collaboration, crowding in additional investments
  • Also with WB and aligning work, also EU and other organisations, so that it adds value to other activities
  • Private sector bringing additional capital, over $14bn, working on over 30 transactions to accelerate progress
  • Some private sector commitments include General Electric
  • Also geothermal, eg in Ethiopia, first private sector led
  • Smart metering also in Ethiopia, on household level allowing efficiency – hope to scale up
  • Wind transactions in Kenya, helping Kenya distribution company to train capacity
  • Mini hydro 10MW in Tanzania, accelerate agricultural efficiency – gov guarantee to enable local banks lending to the project


  • representing private sector
  • you have to see the whole picture to do infrastructure
  • many African countries have no planning, they just want money, but it’s not enough
  • China becoming second largest economy
  • Noone helped Africa capitalise on natural resources
  • Bringing Chinese money to Africa, 200bn last year fr government
  • African needs help from all countries, but need strategy and planning, not just a single projects
  • Creating African – Asian – American foundation, to develop Africa


  • links agriculture and infrastructure
  • its about inclusive growth, consistent good growth for last decade, but a lot hasn’t been inclusive
  • need strong foundation of infrastructure assets
  • lack of infrastructure is a daily hardship of poor people
  • 100bn infrastructure gap
  • research last year, from investors hear set back in Africa is infrastructure, in part energy and roads
  • part of agriculture multiplier effect comes from infrastructure, also affects health, education, etc

Q: Ethiopian gov guaranteeing loans, AfDB investing money. Lot of individuals with capacity – question of high interest rates, these will be kept in profits, could be transferred to people instead.

Q: Power Africa, could create jobs in the countries.

Q: Work for organisation trying to stop child trafficking.

Q: Work force engagement, where is this?

Q: Use of direct labour as a strategy

Q: Power Africa, how is agriculture used as being part of the solution

Q: Power planning, policy environment is very important

Q: Power Africa, are you tying tariffs to the poor?

Q: Agriculture is main part of the future of Africa, what does this mean?

Q: Difference US and China in infrastructure investment?

Q: AfDB, do you have criteria to choose countries?


  • We are targeting the youth, agriculture has been neglected – part of the transformation
  • A value chain need to be developed, not everyone want to be a labourer, we get this
  • Creating better living standards, decent jobs, viable business opportunities, and economic transformation


  • Guarantee to a local entrepreneur in Tanzania, not large companies – clarification – to build small hydro
  • Trying to find the local entrepreneurs that are thinking of creative solutions
  • Distributed energy and local entrepreneurs is key
  • On work force development, very important, also links with tariffs
  • Energy is often expensive since distribution systems is efficient
  • Need trained technicians, systems, processes, to make it efficient and keeping tariffs on reasonable level
  • Policy environment, why we focus on transactions, as first step to figure out obstacles
  • Then you can prioritise them


  • interest rates being too high, they remain high on infrastructure projects, capital intensive
  • demonstrate perceived risk of infrastructure
  • project criteria, will invest in all countries in Africa – where we can work with the government and the private sector


  • I know how to get money out
  • Chinese investment, help to develop country, didn’t charge money
  • WB gives money to the state, maybe they steal some of it
  • Chinese doesn’t given money to the government, guarantee to finish the project
  • Gives the project directly to the African people