Africa’s infrastructure experts, development agencies and the business and public sector are meeting in the Senegalese Capital Dakar to find practical ways of unlocking finance, critical to the implementation of regional infrastructure projects. The first day of the two-day Dakar Financing Summit on Africa’s Infrastructure which began with technical discussions on how to attract investment to, and the implementation of sixteen high priority regional projects, was characterised by robust debate and analysis.
By close of day, they came up with tangible points which will form an action-oriented roadmap titled the Dakar Agenda for Action.
Organised by the NEPAD Agency in partnership with the Africa Development Bank, UN Economic Commission (UNECA) and other multi-sector partners the Summit is aimed at galvanising African Heads of State, Ministers in charge of Finance and Infrastructure, business leaders, Regional Economic Communities (RECs) and the private sector.
Representatives of government, private sector, financiers, international organisation and infrastructure experts in the break out session
Senegal’s Prime Minister Mrs Aminata Toure who officiated the first day of the Summit said that US$68 billion was required to implement priority projects under the PIDA (Programme for Infrastructure Development in Africa).
Senegal’s Prime Minister Mrs Aminata Toure
The format of the Summit It is designed as a business-like engagement to foster project financing with expected practical outcomes. Meetings were held in breakout sessions that focused on the Road and Railway; Ports, and Energy Projects. A number of key challenges and solutions were agreed upon.
NEPAD CEO Dr Ibrahim Mayaki cautioned that the people in Africa were eager for development results and as such, concrete action had to happen. He said the Dakar Financing summit was not just any other meeting, but a platform that would yield input for sustainable growth for Africa’s Infrastructure.
Dr John Tambi outlining the details of the Dakar- Bamako Rail Project
The Dakar- rail project, key to the host country was reviewed by experts who identified the need for a single Interlocutor with requisite technical and financial capacity to work directly with the Private Sector on behalf of the Project Sponsor. Equally important is the provision of incentives to the Private Sector, such as using a life cycle contract model, and the funding of the infrastructure - the tracks by the government, while the Private Sector funds the rolling stocks. Leveraging multilateral financing was underscored at the Summit.
It is estimated that only 38 percent of Africans have access to electricity, the special session on Energy Session-moderated by NEPAD and AUC focused three PIDA high priority projects: Nigeria- Algeria Gas Pipeline; Sambangalou Dam and transmission line; Rizzi III. They discussed the projects status. The three projects were found to be at different advanced stages of development but still facing some challenges which are being attended to at present. (The details of these can be accessed the link below)
In the centre on the picture above, NEPAD Head of Infrastructure Professor Mosad Elmissiry chairing a session on Energy projects at which the following salient points were raised:
- Government has a significant role to play in creating conducive environment for investment this includes developing policies and regulations which are transparent, consistent ,legal framework that protects both the investor and the government interests, tax framework which is fair
- For the energy sector the financial stability of the country power sector is an important factor for attracting investment
- Electricity tariff has to be cost reflective with the government attending to its social responsibility towards the citizen who may have affordability problems.
- The proper financial structuring of energy project is a prerequisite for attracting investment. No investor will risk putting his money in a project which is badly structured. Also, private sector does not normally fund project preparation .Government has to step in to fund this stage of project development or to create facility like NEPAD PPF to fund project preparation stage
- From a lender point of view ,risk sharing and optimum allocation of risk to those who can handle it is the best way for de-risking project finance
- For energy projects ,there is no one finance scheme which fits all ,there are projects which has to be financed by public sector, such as transmission lines ,others are perfect for private sector or PP. Finance is project specific
- Project Planning should not be crises driven. It has to be a long term based on will calculated energy demand and forecast.
Adama Deen Head of NEPAD Infrastructure made a joint presentation with Laetitia Habchi Head of the Infrastructure Desk at the NEPAD Business Foundation
Experts also discussed the rapid pace of information and the communications in Africa. They key outcomes include the following suggestions:
- Political will is needed to overcome Regulatory/Licencing issues that often hamper the development of cross-border broadband links.
- ICT Innovation is the backbone of the digital economy which is going to be a key driver of Africa’s growth (including youth employment) and will underpin the profitability of regional and continental infrastructure. The digital economy is therefore crucial to bankability of infrastructure projects and should be prioritised as such.
- Long term sustainability of infrastructure development will be underpinned by African Infrastructure Knowledge Practice. It is therefore critical to capture, preserve and build on the knowledge being generated in on-going successful infrastructure projects.
- Infrastructure project implementation should be approached in a holistic way covering not just the physical infrastructure but also associated benefiting industries like agriculture, fisheries and forestry.