SPECIAL REPORT
platform that will help Africa mobilise resources from
global and regional pension funds and institutional
investors to close the infrastructure deficit of the
continent.
The Bank is improving the access of African countries
to infrastructure fi nancing via its fi nancial instruments and
private fi nance catalysis, directed by its High 5 strategies.
These include its Private Sector Credit Enhancement
Facility (PSF) which can support up
to $500m investments through Risk
Participation Agreements (RPAs). There
is also a $500m Private Equity Fund for
the acceleration of energy access in Africa,
and climate fi nance support to energy and
climate mitigation projects.
Other instruments include bi-lateral
co-fi nancing programs and Trust Funds,
for example, the Africa Growing Together
Fund – an initial $2bn 10-year co-fi nancing
partnership with the People’s Republic of
China, and a $3bn 3-year co-financing
partnership with the Government of Japan.
The Bank also offers credit enhancement/
risk mitigation products for large-scale
projects, such as at the Lake Turkana
project in Kenya, and strategic partnerships
in venture capital, the Africa CEO Forum,
and the Action Plan for Agricultural
Transformation.
There are already several regional
initiatives aimed at improving the stock
and quality of regional infrastructure and at
leveraging the benefi ts of fi nancial markets
integration in Africa. Recent efforts also
include supporting fi nancial integration.
Through the African Financial Market
Initiative (AFMI), we are stimulating the
development of domestic bond markets,
regional stock exchanges, and regional
commodity markets in the continent.
In the last five years, the Bank’s
commitments to infrastructure have totalled more than $12
billion, mostly in cross-border transport, energy, fi nance,
and ICT connectivity.
We have worked closely with our partners to identify
and undertake regional infrastructure projects under the
Programme for Infrastructure Development in Africa
(PIDA) with a $10 million grant and to accelerate trade
facilitation, the Bank has invested more than $20 million
over the past fi ve years in trade agreement support and
cross-border transport and energy soft infrastructure.
The Bank fi nanced $4.2 billion for infrastructure last
year, especially in electricity and transport. To further
boost support for infrastructure, the Bank helped to set up,
together with African countries, the Africa 50 investment
vehicle. Today, 23 African countries have invested in
Africa 50 with $830 million and we expect that the fund
will be fi nally capitalised at $1 billion.
Highlights of truly transformative projects involving
the African Development Bank’s active
assistance include the $245 million loan
approval to the Governments of Uganda
and Rwanda for the Kibuye-Busega road
construction. The two landlocked countries
have placed transport infrastructure as key
development priorities. This multinational
road project is expected to positively
impact both regional trade in East Africa
and road interconnections in the Great
Lake regions.
For the future, the African Aviation
industry needs urgent attention, with an
estimated $150 billion needed to fi nance
aircraft acquisition alone in the next 20
years. In the past decade, over $1 billion
has been invested in the construction and
expansion of airport terminals, as well as
aviation safety and aircraft fi nancing. For
an integrated Africa, and all the benefi ts that
this will bring, it is critical, today, to attract
private sector capital in the high yield
aviation sector; the Bank is determined
to play a leading role to help close this
fi nancing gap.
The African
Development Bank
is doing a lot to
support young
people across
the continent
to achieve their
dreams and create
the next generation
of full employed
working people,
not to mention, a
selection of young
and enterprising
billionaires.
Increasing debt in many African
countries is a cause for worry. In what
ways can African countries be assisted
in overcoming this challenge?
African countries should be supported
in three main areas; strengthening debt
management capacity and governance;
expanding the domestic resource base; and improving the
effi ciency of funds raised on domestic and international
markets.
Getting accurate data on debt in a timely and
transparent manner is critical in improving accountability
in debt management. In some instances, debt contracting
and reporting are not consolidated in a central debt
management offi ce. This makes it diffi cult to track the total
debt. Central consolidation will reduce the risks associated
with contingent liabilities.
COMESA• 2018 8 • 15