Task Force Training for PIDA Priority Action Plan (PAP2)

Task Force Training for PIDA Priority Action Plan (PAP2)

Addis Ababa, Ethiopia, 4th February 2020 – The African Union Commission (AUC) launched a three-day workshop from 29th – 31st January 2020 to train task force nominees on the project selection criteria in pursuit of “inclusive, sustainable world-class infrastructure” carved out by Agenda 2063.  Expert representatives from infrastructure sectors: energy, transport, ICT, and transboundary water resources were selected from the African Union Commission (AUC), the African Development Bank (AfDB), the African Union Development Agency (AUDA-NEPAD), and the United Nations Economic Commission for Africa (UNECA) to take part in the workshop for a better understanding on the application of the Integrated Corridor Approach in the PIDA PAP2 project selection process so that they would, in turn, guide representatives from the Member States and Regional Economic Communities (RECs) in identifying priority infrastructure projects in line with the AU vision under Agenda 2063.

In his opening remarks, the Head of Information Society Division at the AUC, Mr. Moctar Yedaly thanked the participants for attending this vital workshop and emphasized the need for unceasing commitment to see the PIDA PAP2 through the STC approval in October 2020 and its adoption by the Heads of State in January 2021. “We have new projects to select taking into consideration what has been achieved and what we have yet to do,” he highlighted. The task force intends to build upon the experiences and lessons learned from PIDA PAP1 projects to lay the groundwork for PIDA PAP2.

Moving into the second phase of PIDA, the Member States and RECs must first identify priority projects so that ultimately the projects reflect the needs of the main stakeholders. The Members States will propose their projects to RECs, who are required to fill out specific forms requesting key information to screen projects with the guidance of the task force before submitting it for review. Once the project identification is complete, the task force will analyze, score and prioritize the proposed projects according to the eligibility and project selection criteria. While the eligibility criteria focus on regional integration, the project selection criteria concentrate on inclusiveness and sustainability with regard to gender sensitivity, rural connectivity, and environmental friendliness. The project selection criteria also weigh the economic and financial impact of projects in terms of job creation, economic impact, bankability, smart/innovative approaches, and corridor planning.

Fifty total projects will be picked by the end of the process, ten projects per region and at least one project by sector. The screening tool, based on inputs by the taskforce, will generate a weighted overall score to measure a project’s ability to respond to the Integrated Corridor Approach for the selection. This task force training was launched with support from GIZ with the objective of PIDA PAP2 adoption by Heads of State in 2021.

About PIDA PAP

The Programme for Infrastructure Development in Africa (PIDA), an African Union Commission (AUC) initiative, in partnership with the NEPAD Planning and Coordinating Agency (NPCA) the African Development Bank and the United Nations Economic Commission for Africa, aims to accelerate infrastructure development across the continent.

PIDA as a strategic framework will run through 2040 in order to develop continental (cross-border) infrastructure (Energy, Transport, Information and Communication Technologies (ICT) and Trans-boundary Water Resources). PIDA’s main purpose is to strengthen the consensus and ownership of large cross-border infrastructure projects that integrate energy, transportation, and water development on a continental scale.

The PIDA Priority Action Plan (PIDA-PAP), which extends to 2020, comprises 51 programmes and projects divided into 433 projects covering transport, energy, information, and communication technology (ICT) and trans-boundary water sectors. PIDA will allow countries to meet forecast demand for infrastructure services and boost competitiveness by: (i) Increasing efficiencies; (ii) Accelerating growth; (iii) Facilitating integration in the world economy; (iv) Improving living standards and; (v) Unleashing intra-African trade.

While it is difficult to accurately project the capital cost of PIDA’s long-term implementation through 2040 (currently estimated at more than $360 billion), the overall capital cost of delivering the PAP from 2012 through 2020 is expected to be nearly US$68 billion, or about $7.5 billion annually for the next nine years. Energy and transport projects and programmes represent around 95% of the total cost, demonstrating the critical need for transformative investments in these sectors to support African trade, promote growth and create jobs. Investment needs for ICT and water represent lower percentages.

Why is the proper structuring of major infrastructure projects in Africa a priority?

Why is the proper structuring of major infrastructure projects in Africa a priority?

Financing projects upstream, building partnerships between public and private operators,
AUDA-NEPAD accelerates its efforts to advance the continent’s development. 

Since the Dakar Financing Summit in June 2014 and President Macky Sall’s push to advance high-impact projects across the continent, including those of integrated corridors with a regional dimension, ambitious national and transnational projects have been presented each year. According to the last figures released by the Infrastructure Consortium for Africa (ICA) in 2018, the level of Africa’s infrastructure commitments have exceeded US$ 100 billion, for the first time, a 24% increase compared to 2017. African governments were the main source of infrastructure financing, with US$ 37.5 billion dollars (37% of total commitments), followed by China, which committed 25.7 billion dollars (25% of total commitments). For its part, the private sector only contributed by US$ 11.8 billion (12% of total commitments). Given the high potential for significantly heifer private sector investment, our efforts must be concentrated in structuring infrastructure to meet investment requirements.

The time required to properly develop and structure infrastructure projects is long, in the best case usually between taking between three to seven years before reaching financial close. Moreover, according to an Okan / CEO Forum report, 83% of African Public-Private Partnerships are abandoned, not because of lack of funding, but because they are poorly designed or not commercially viable. Project development costs for large-scale PPP infrastructure projects can account for 5% to 10% of the total project investment.

To avoid this loss of time and money, AUDA-NEPAD and its partners have developed a series of tools to support the preparation and financing upstream of Africa’s regional and national infrastructure projects to enable more effective definition and structuring aligned with investor requirements. Related funding mechanisms are required to cover the costs of project development including project management, transactions advisory, technical studies (pre-feasibility, engineering, feasibility, socioeconomic development, environmental), business plans, financial models, among others.

The high level of technical challenges, from the complexity of the different environments to the the transnational nature of certain infrastructure projects – such as the 330 KV transmission project of Niort Core crossing four countries (Nigeria, Niger, Benin, Burkina Faso) – require a very high level of expertise and the mobilization of many international operators, therefore resulting in additional costs.

Thanks to specific technical assistance mechanisms, such as the SDM (Service Delivery Mechanism), the preparatory studies for the construction of the 1,000 km section between Abidjan and Lagos have mobilized joint financing of US $ 22.7 million from the AfDB and the European Union. A team of experts worked for 18 months during the preparatory phase in Lagos to enable the establishment of the Abidjan-Lagos corridor. This project has led, within ECOWAS, to the signing of a multilateral treaty between the Heads of State and Government of Benin, Côte d’Ivoire, Ghana, Nigeria and Togo, creating a supranational authority, the Abidjan-Lagos Corridor Management Authority (ALCoMA), a first in Africa. ALCoMA will facilitate the management and coordination of the entire project cycle, from preparation to construction, including operation and maintenance.

Following the same inclusive and integrative logical thinking, the LAPSSET megaproject in East Africa, estimated to cost in total US$ 25 billion, is an example of a significant government initiative aimed at establishing transnational partnerships between public and private institutions. Projects in development include Lamu Port in Kenya, a normal gauge railway line linking Juba to southern Sudan and Addis Ababa in Ethiopia, the development of a broad road network, two pipelines in southern Sudan and Ethiopia, an oil refinery in Bargoni, Kenya, three airports, among other projects. This ambitious series of projects involve a cross-section of national and international investors, both debt and equity.

In order to facilitate and deepen the  public-private dialogues required to remove one of the main obstacles to infrastructure development on the continent — the lack of consideration of private sector constraints in the implementation of major projects — the Continental Business Network (CBN) was launched on the sidelines of the World Economic Forum in Cape Town, South Africa, in June 2015. Private sector leaders are systemically invited to share their advice and capacity in order to advance the critical infrastructure projects being advised by AUDA-NEPAD.

It is crucial that we work actively to fill our infrastructure gaps – by addressing the broader issue of integrated approaches to infrastructure development while building partnerships with key stakeholders: the private sector, institutional investors, African governments and willing development partners.

We need to engage together across the public and private sectors in collaborative frameworks to further the development of initiatives such as the 5% Agenda to mobilize funding from African pension funds and the Africa Infrastructure Guarantee Facility to scale guarantees, creating the enabling environments required to attract more private capital to Africa’s infrastructure.

Stakeholder Validation Workshop to harmonize African Fuel Standards

Stakeholder Validation Workshop to harmonize African Fuel Standards

The African Union Commission (AUC) in collaboration with the African Refiners and Distributors Association (ARA) hosted a two-day workshop, from 10th to 11th December 2019 – to validate “The Benefits of Adopting AFRI Fuel Specifications Roadmap” which aims to ensure superior fuel quality and significant emissions reduction for achieving clean air in Africa. The harmonized regional and continental fuel specifications are believed to make a positive and lasting impact on economies, air quality, health, and climate.

The purpose of the workshop is to meet with the stakeholders and discuss a draft of the study on the socio-economic benefits of these harmonized specifications to develop a final report to be presented to the AU for its adoption.

The importance of a continental approach in developing the right fuel specifications, and vehicle standards with ambition, yet achievable roadmap said the director of Infrastructure and Energy at African Union Commission, Mr. Cheikh Bedda. “In the context of regional and continental integration, a common approach is ideal for enabling the continent to move together in the same direction. It is even more critical in the new dispensation of operationalizing the African Continental Free Trade Area.” Intra-African trade is expected to rise as access to larger regional markets increase and shared specifications and discourage illegal activity such as smuggling, tampering with product quality. The Harmonized fuel specifications would potentially boost the Intra-African trade therefore, the key to sustainable economic development throughout the continent.

As Africa moves towards cleaner air, the reduction of harmful particles such as particulate matter (PM2.5) emitted from substandard vehicles reduces the concentration of PM2.5 in the atmosphere. The study points out PM2.5 is one of the factors in causing premature deaths, thereby linking its reduction to an increase in the avoidance of the deaths.

As the population grows and urbanization increases, there is an immediate need to develop policies regulating vehicle exhaust emissions and fuel specifications across the continent.  However, as emphasized during the workshop, it is important to consider and continue to address issues regarding the cost and viability of African refiners to secure the support of the member states. Furthermore, the challenges outlined by stakeholders included vehicular control mechanisms, timeframe for quality adjustments for refineries, and cost-effective methods for production and/or import of fuel with higher specifications. 19 stakeholders were in attendance at this workshop representing the ARA and supporting institutions. The Feedback obtained from this fruitful discussion will serve the consultants and the ARA in finalizing the report in support of the application for AFRI specifications once adopted by the AU Policy Organs.  A pan African approach with the backing of the AU would be valuable in facilitating a coordinated and structured implementation of this roadmap to achieving cleaner air. The roadmap for reaching full compliance to AFRI specifications is expected to be presented to the AU in 2020 and its adoption, 2021.

PIDA Week: Private and public sector partnerships key to unlocking Africa’s infrastructure funding

PIDA Week: Private and public sector partnerships key to unlocking Africa’s infrastructure funding

The 2019 Programme for Infrastructure Development in Africa (PIDA) Week opened in Cairo, Egypt, Monday with a clarion call from key players in the infrastructure sector for enhanced partnerships between the public and private sectors to  develop the continent’s infrastructure to spur industrial growth and employment creation.

They agreed that greater economic activity, enhanced efficiency and increased competitiveness on the continent were continually being hampered by inadequate transport, communication, water and power infrastructure.

The lack of infrastructure in Africa is an obstruction to economic growth, hence  the need to expedite infrastructure development projects to achieve the 2063 development agenda,” said  Ambassador Khaled Emara, Assistant Foreign Minister for African Organizations and Communities and Egyptian President’s Representative to the African Union Development Agency (AUDA-NEPAD).

Ambassador Emara further noted that the world, is eager to do business with Africa, but finds it difficult to access the continent due to poor infrastructure.

In his opening remarks, Dr. Ibrahim Assane Mayaki, CEO of the African Union Development Agency (AUDA-NEPAD) spoke on the rationale behind PIDA Week and its objective, highlighted the African Union Development Agency-NEPAD’s strategy in PIDA implementation and reminded delegates of the importance of accountability and political will in order to transform Africa’s Infrastructure.

This is not another conference, not another ordinary week. This is for you, stakeholders in the Infrastructure development space, to own and significantly contribute to change the lives of millions Africans!.As this responsibility has been bestowed upon us, we shouldn’t take this lightly when we engage in the various sessions throughout the week” said Mayaki

“And to quote President Paul Kagame’s report on the African Union reforms, “We have everything needed to succeed. To fail Africa again would be unforgiveable.” he concluded.

African Union Commissioner for Infrastructure and Energy, Dr. Amani Abou-Zeid, said PIDA Week was an important platform to evaluate achievements and challenges the continent is facing in infrastructure development and to plan for the future.

The Commissioner said there was need for Africa to attract private investments and utilize pension and sovereign funds to develop the much-needed infrastructure on the continent.

“We should learn from our mistakes and focus on the projects that we are going to implement in the next ten years. We should learn how we can be more attractive to investment. We should re-draft how we present bankable projects so as to be able to involve stakeholders from the public and private sectors,” she added.

For his part, H.E Dr. Mostafa Madbouly, Prime Minister of the Arab Republic of Egypt, in his keynote speech delivered by Dr. Mohamed Shaker El-Markab, the Minister of Electricity and Renewable Energy, said;

“The implementation of the African development plan, Agenda 2063, is based on providing an advanced infrastructure with sustainable services in light of its commitment to attract investment and promote intra-African trade to achieve the regional and economic integration that our countries and people aspire to.

Since its inception in 2015, PIDA Week has evolved and grown to become the flagship advocacy and marketing event for PIDA, which was formed to drive Africa’s aspirations for infrastructure development in line with Agenda 2063.

More than 700 delegates from across the continent and beyond are attending this year’s PIDA Week which is held under the theme  “Positioning Africa to deliver on Agenda 2063 and economic integration through multi-sectoral approaches to infrastructure development”.

PIDA week kicks off with call for enhanced partnership between public and private sector

PIDA week kicks off with call for enhanced partnership between public and private sector

Africa’s high profile authorities made a call for enhanced partnership between public and private sector in developing the continent’s infrastructure at the opening of the 5th PIDA Week on Monday November5, 2019 in Cairo, Egypt.

Speaking during the occasion Dr. Ibrahim Assane Mayaki, CEO AUDA-NEPAD, pointed out that 80 percent of the infrastructure projects’ costs were funded by public funds adding that there was a huge gap to implement the PIDA regional projects. Dr. Mayaki stressed the need to attract the private sector to the development of regional projects. According to him, CBN was created to serve as an instrument to channel funding.

Dr. Mayaki touched on the need to conduct a deep study on the challenges of accessing financing. He also stressed the need to work on de-risking and guarantee mechanisms.

H.E. Amani Abou-Zeid, AU Commissioner for Infrastructure and Energy, said that the PIDA Week is an important plat form to evaluate the achievements and challenges the continent is facing in infrastructure development and the plan for the future. Abou-Zeid said the African heads of states have demonstrated a strong commitment towards the realization of flagship projects of the Agenda 2063. She said that five regional infrastructure projects from each region were selected adding that a project selection criteria was prepared with a participatory approach to be adopted during the week. She touched on the need to attract private investments and utilizing pension and sovereign funds. “We should learn from our errors and focus on the projects that we are going to implement in the next ten years. We should learn how we can be more attractive to investment. We should re-draft how we present bankable projects so as to be able to bring stakeholders from the public and private,” she added.

The 50 projects selected from the five regions are expected to change the shape of Africa.

Ms. Barbara Schaefer, representative of Germany, noted that Germany was supporting infrastructure development projects in Africa as it understands the need for regional economic integration and overcoming borders. Germany supported various instruments including job creation tool kit and network of women in infrastructure. “We focus on private sector involvement and de-risking mechanisms,” she said.

Mr. Mamady Souare, Manager, Regional Integration Operations Division, AfDB, said the role of the private sector in infrastructure development was fundamental. Souare stressed the need to integrate international and national fundings. With regards to risk Souare said AfDB assists the private sector in doing risk assessment.

Mr. Robert Lisinge, Chief of Energy, Infrastructure and Services Section, UNECA, highlighted the political and regulatory risk the private sector faces. “Different countries have different investment climates. There is lack of capacity to prepare bankable projects,” he said. He also noted most African countries lack the capacity to negotiate with the private sector. The UNECA has created a division that works on these issues. Currency stability was the other challenge Lisinge cited.

A representative of the African Import Export Bank noted that the bank has been working on capacity building, and derisking mechanism, which are key to unlocking capital. The bank is working with 51 out of the 54 member states. The representative highlighted the need to work on inter-state guarantee to allow the flow of goods between countries. “Access to information is a huge gap and we created a trade information portal,” she said. She also indicated that access to foreign currency is a challenge.

Representative of the EU Mrs. Carla Montesi, reaffirmed the commitment of the EU in supporting Africa’s regional economic integration. According to Motensi, the EU has provided one billion euro for energy, transport and ICT development projects in the past seven years.  The need for infrastructure financing is very high. It has never been enough and this calls for the involvement of the private sector. Last week the EU pledged to extend 1.6 billion euro grant at the African Investment Forum.

H.E. Ambassador Khaled Emara, Assistant Foreign Minister for African Organizations and Communities and Personal representative of the President of the Arab Republic of Egypt to AUDA-NEPAD, stated that weak infrastructure in Africa was obstructing economic growth.  Ambassador Emara stressed the need to expedite infrastructure development projects to achieve the 2063 development agenda.

Since its inception in 2015 PIDA Week has evolved and grown to become the flagship advocacy and marketing event for the PIDA program and specifically projects in need of financing. The format of the event provides an opportunity to engage and exchange information on PIDA in particular and infrastructure development in general.

More than 700 delegates are participating in the PIDA Week 2019, which is being held under the theme “Positioning Africa to deliver on Agenda 2063 through multi-sectoral approaches to infrastructure development.”

By Kaleyesus Bekele – PIDA Journalist Network