AFRICA – Greater private sector involvement in infrastructure projects is key in closing the infrastructure financing gap in Africa, however more has to be done to make Africa projects more attractive, the African Development Bank (AfDB) has said.
According to AfDB, private sector investors develop cold feet when it comes to investing in infrastructure projects in Africa because of the high risk that come with investing in such projects.
The continent’s largest development finance institutions have however reaffirmed their commitment in boosting the number of bankable projects that will attract investor interest and contribute to closing the infrastructure finance gap in Africa.
Speaking at a conference organized by U.S. International Development Finance Corporation (DFC) and the Atlantic Council on investing in Africa’s futures, leaders from these institutions emphasized on the importance of private sector involvement in Africa’s infrastructure.
To highlight the importance of large infrastructure projects on the continent, Samaila Zubairu President & Chief Executive Officer of the Africa Finance Corporation (AFC) spoke of the AFC’s Kigali Innovation City (KIC) technology hub project.
According to Zubairu, the iconic complex in Rwanda is already changing the narrative about Africans only consuming technology rather than being developers.
His comments were echoed by Admassu Tadesse, President & Chief Executive Officer of the Eastern and Southern African Trade and Development Bank, who said the “blended” returns of dividends and the development impact of some of these projects made any risks worthwhile.
For Alain Ebobissé, Africa 50’s unique niche ensures a healthy supply of bankable projects through the mainstreaming of project preparation activities.
“We develop very close relationships with our government shareholders and as a result project implementation is speeded up – especially in the context of the COVID-19 pandemic,” Ebobissé said.
Most of the participating institutions offer a wide variety of financial instruments and products to help de-risk such investments.
For instance, the U.S. International Development Finance Corporation (DFC) which was launched in 2019, expressed its commitment towards Africa’s infrastructure.
The DFC has an investment cap of $60 billion and has selected Africa as a priority region for future investments.
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