Tackling Poor Infrastructure in Africa

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O'Neill

The Africa Finance Corporation convenes a summit to find ways to address Africa’s infrastructural needs and investment deficit

— Mar. 24, 2014 @ 01:00 GMT

AFRICA’s infrastructural requirement and investment deficit have engaged the attention of Africa Finance Corporation which plans to hold an inaugural summit in Lagos on March 25. The Summit which takes place at the Eko Hotel and Suites, Lagos, with the theme: ‘AFC Live: Bridging the Infrastructure Divide.’ The summit is AFC’s response to the need to open a dialogue to address the scale of Africa’s infrastructural requirements and its investment deficit, which is conservatively estimated at more than $40 billion per annum over the next 10 years.

The summit will bring together African politicians, business leaders and academics for a series of lively panel discussions. Confirmed speakers include: Jim O’Neill, the economist and former chairman of Goldman Sachs Asset Management, best known for coining the ‘BRIC’ and ‘MINT’ acronyms, as well as Ngozi Okonjo-Iweala, Nigeria’s coordinating minister of finance and economy, Chinedu Nebo, minister of power, Patrick Achi, minister of economic infrastructure, Côte d’Ivoire, Cristina Duarte, minister of finance, Cape Verde;

Duarte
Duarte

Others are Jim Yong Cai, executive vice president and CEO, International Finance Corporation, Tony Elumelu, chairman Heirs Holdings, Diana Layfield, CEO Africa, Standard Chartered Bank, Nkosana Moyo, Mandela Institute for Development Studies; and Funke Opeke, CEO Main One.

According to AFC, the summit is a must- attend event for audiences interested in Africa’s infrastructure challenges. It will discuss issues such as Africa’s need to take the lead in bridging the investment divide whilst also accessing international capital as part of a joined up and holistic approach.

Speaking on the forthcoming summit, Bayo Ogunlesi, chairman of AFC, said: “The summit is a key opportunity for a broad range of stakeholders, from national governments to the indigenous and international private sector and donor partners, to contribute to the development of constructive solutions to the deficit in infrastructure investment in Africa which continues to hold back economic growth on the continent. The Africa Finance Corporation is committed to serving as a catalyst for growth in infrastructure development in Africa, by focusing on investments in the sectors that are critical to economic growth on the continent and attracting new investment partners and country members.”

O’Neill said he was “delighted to be participating in the AFC’s inaugural summit which promises to address an important agenda. If Africa is to reach its potential as the home to some of the fastest-growing economies in the world, then infrastructure will play a vital role in making that happen. This conference provides an excellent opportunity to gather some of the most important figures in the region in order to discuss how this can be achieved. The AFC plays not just a vital role in brokering these discussions but also in financing and advising some of the most transformative infrastructure projects on the continent.”

Key sessions at the Summit will include: ‘Building the New Africa – action plan for the next decade’ There will be panel discussions on different sectors such as power, transport, and natural resources

The World Bank estimates Africa’s infrastructural deficit at $38 billion of investment per year, with a further $37 billion per year required in operations and maintenance. This represents 12 per cent of Africa’s current GDP.

AFC is an African-led multilateral development financial institution, established in 2007, whose mission is to improve African economies by proactively developing and financing infrastructure, industrial and financial assets.  It is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa. AFC’s current authorised share capital is $2.0 billion with shareholders’ funds of $1.24 billion and a 2013 funding programme of $700 million.

Okonjo-Iweala
Okonjo-Iweala

AFC is the second highest investment grade-rated multilateral financial institution on the African continent, with an A3 (long term) /P2 (short term) foreign currency debt rating by Moody’s Investors Service. It is the lead investor in the award winning Cabeolica project, a $90 million, 26MW landmark renewable energy wind power project in Cape Verde.

It is also the technical adviser to the Central Bank of Nigeria, CBN, on the $2.0 billion Power and Aviation Intervention Fund, PAIF. AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets, and a lead financier in the acquisitions of the Kainji and Ughelli power generation plants in the current Nigerian Government power sector privatisation round.

In Nigeria, AFC has made investments to support marginal field operators in the up and mid-stream oil and gas sector companies such as Neconde, FHN and Seven Energy. It is also the lead investor in Cenpower Generation Company Limited, Cenpower, which is implementing the Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana.

AFC is also the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity. The corporation provided a $50 million convertible debt investment in ARM Cement Limited, ARM, the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and the expansion of ARM’s cement capacity in Kenya. The transaction marked AFC’s first bilateral investment in Kenya. AFC also provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline, invested in the Bakwena toll road project in South Africa, and in the EURO 270 million Konan Bedie Toll Bridge in Côte d’Ivoire; the signature Transport PPP project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent.

It launched a landmark $15 million project development facility with the Dutch Development Bank FMO in January 2013, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa. The AFC has established partnerships with national, regional and international organisations and with sponsors that are active in the infrastructure space in Africa.

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