AfDB sets to bridge infrastructure gap

The African Development Bank Group (www.AfDB.org) has taken a crucial step to further address the infrastructure gap in African countries, with the approval of its first strategic framework for the development of public-private partnerships. This follows approval by the Bank Group’s Board of Directors on January 19, 2022.

Africa’s infrastructure investment gap is estimated at more than $100 billion per year, affecting the living conditions of Africans and the continent’s global competitiveness. Bank experts say public-private partnerships offer an additional approach to increasing private sector investment and higher levels of efficiency in the development and operation of infrastructure assets in Africa.

Bank Group President Akinwumi A. Adesina said the new framework would form the basis for the Bank’s commitments in the infrastructure sector. “This long-awaited strategic framework will go a long way in enabling the Bank to provide the necessary assistance for the development and implementation of public-private partnerships in our regional member countries, and we look forward to its success.”

Public-private partnerships are already a key feature of the infrastructure projects supported by the Bank, including several projects in the transportation and energy sector in all regions of the continent.

To achieve its development ambitions, the Bank’s Strategic Framework for Public-Private Partnerships is based on three pillars that will provide a comprehensive solution to member countries, from start to finish. Pillar one covers start-up support, more specifically to ensure an enabling environment and capacity in member countries. The second pillar will provide intermediate support, including project preparation and transaction advisory services to help structure projects to achieve financial closure. The last pillar involves downstream support to finance the implementation of investment projects.

To assist pillars one and two, the Bank will establish a special dedicated instrument, to be known as the Africa Public-Private Partnership Development Fund.

The strategic framework streamlines Bank-wide public-private partnership efforts across various departments and provides guidance on financial instruments and resources. It recommends a selective approach to operations and markets, based on the Bank’s comparative advantage in Africa’s infrastructure sector, its convening power on the continent, and the level of maturity of the different markets, respectively.

The Bank’s Private Sector, Infrastructure and Industrialization Complex will coordinate the implementation of the framework over a 10-year period, beginning in 2022. Complex Vice President Solomon Quaynor said the framework would allow African countries to increase sector investment private in the economic sector, including transport, energy and ICT, and the social sector, including health and education. It would also ensure better sustainability and debt management, innovation and efficiency, and improve the competitiveness of their economies.

“The current global and African context, the widening infrastructure gap and limited fiscal space, due to the Covid-19 pandemic, among other factors, create a strong case for the Bank to increase its support for public-private partnerships. to attract more private sector investment in economic and social infrastructure, and provides a foundation for the Bank to become a leading voice and financier of public-private projects in Africa.”

In implementing the strategic framework, the Bank will engage clients and partners and begin a dialogue with member countries to identify priority areas.