AfDB To Develop PPP Framework For Infrastructure Development In Africa
9 November 2020
he African Development Bank (AfDB), has begun developing a Public-Private Partnership (PPP) framework to strengthen support for PPPs and enhance economic and social infrastructure development in the continent.
According to a statement from AfDB, representatives of the bank, Development Finance Institutions (DFIs), private sector, and professional associations made this known in a virtual meeting hosted by the bank. The event titled: “Designing the African Development Bank’s PPP Framework’’, was organised amid the on-going COVID-19 pandemic which, had prompted an urgent need for investment.
The statement said that five African countries accounted for more than 50 per cent of all successful PPP activities from 2008 to 2018. They are Nigeria, South Africa, Morocco, Egypt, and Ghana. Meanwhile, several other countries had multiple PPPs in the pipeline.
Vice President of the bank, Solomon Quaynor said: “Before the COVID-19 pandemic, African infrastructure was already struggling to structure projects tailored for the private sector and at the same time, achieving value for money for the public sector including affordability for users. “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 needed fiscal room for governments to address multiple other demands including building health systems’ resiliency. “The African Development Bank has unparalleled trust relationships with African governments, and we need to take advantage of that to speed up implementation of PPPs,” Quaynor said.
Mr Amadou Oumarou, the Director for the bank’s Infrastructure and Urban Development Department, presented several rationales for the bank’s effort to develop a PPP framework. Oumarou’s presentation included the bank’s Ten-Year Strategy, 2013 to 2022, and a recommendation from the bank’s Independent (IDEV) evaluation unit to scale up PPP interventions.
Participants also expressed a desire for the bank to play an expanded role in supporting PPP development in Africa by strengthening policy and regulatory frameworks and building government capacity. They further urged the bank to project structuring and advisory services, and the provision of financing instruments such as de-risking, guarantees, credit enhancements, and local currency financing.
A participant, Mr Shoubhik Ganguly said: “countries need to learn from each other’s achievements and mistakes, they need to have standard documents and checklists that will guide institutions in these countries through the PPP lifecycle.” Ganguly was representing Rebel Group International, which is partnering with the bank to develop the framework. Mike Salawou, the Division Manager, Infrastructure Partnerships, said: “Policy dialogue is something the bank places a lot of premium on, and that has proven to be very efficient in informing decision making.”
Michael Opagi, Division Manager for Sub-Saharan Africa, International Finance Corporation said: “One of the challenges regional member countries are faced with is selecting the right project for implementation. “Therefore support should start from there, then going through to actual project preparation makes it a lot easier,” Opagi added. Private sector participants commended DFIs and described them as indispensable in securing financing for PPP projects in Africa. According to Phillipe Valahu, Chief Executive Officer, Private Infrastructure Development Group (PIDG), the Kigali Water project, is an example of having integrated support to a PPP project, by using the three pillars proposed in the bank’s PPP framework. The project benefited from debt funding from PIDG alongside the AfDB which each provided 19 million dollars of senior debt on commercial terms.