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

PIDA 2019 need for financial resources

PIDA 2019 need for financial resources

While the infrastructure and infrastructure services gap in Africa remains high, there is increasing activity and investment efforts on the continent against a background of an ambitious long-term plan for closing Africa’s infrastructure gap, called the Programme for Infrastructure Development in Africa (PIDA), that African heads of state and government endorsed in 2012.

PIDA PAP1 consisted of over 400 projects, including 54 energy projects (hydropower plants and interconnectors), 236 transport projects,114 for ICT sector and 9 transbundary water projects. These sectors are sensitive to the adverse impacts of climate change, such as droughts, heat waves, and more frequent and intense floods and especially water and energy sectors.

The energy projects include 10 hydropower plants of over 22 gigawatts capacity, notably the Inga-3,which is under negotiation for financing  and the Grand Ethiopian Renaissance Dam it is under construction.

The infrastructure projects identified in PIDA require investments in the order of $360 billion by 2040.

Of the $81.6 billion invested, 42.1 percent came from national governments, 23.8 percent came from China, and 24.1 percent came from bilateral donors, multilateral agencies and African institutions. By contrast, the private sector accounted for just 2.8 percent.

All this shows theres a need for more financing from private sector.To that effect efforts have been made to provide a legal framework for private sector investment infrastructure.

Most of the investments were in transport (41.7 percent), energy (30.4 percent) and water (16.2 percent) all sectors that are sensitive to the adverse impacts of climate change.

Closing the Gap

Africa’s infrastructure and the huge investments needed to close the gap are very much at risk from climate change. There is thus an urgent need to ensure that climate resilience is integrated into the planning and implementation of infrastructure investments on the continent.

Furthermore, major investments will have to come from the private sector, so there is growing demand for institutions to declare climate risk exposure of their investments. This presents a great opportunity for Africa.

Based on best practices and experience from all the continent As an infrastructure development latecomer, Africa can take advantage of advances of lesson learn and new technology, the falling costs of low-carbon technologies, and the need to diversify and strengthen the macroeconomic basis of economies.

It can also learn from the experiences of other global regions in order to leapfrog and build infrastructure that is, from the outset, robust, resource-efficient, and able to perform both today and in tomorrow’s uncertain climate.

This year PIDA week is being held in Cairo, Egypt under the theme Positioning Africa to deliver on Agenda 2063 and economic integration through multi-sectorial approaches to infrastructure development.

It is worth mentioning  that AUC and NEPAD are preparing the next phase of PIDA

In his opening remarks AUDA-NEPAD CEO Dr Ibrahim Mayaki said Infrastructure is clearly inscribed in Agenda 2063 which recognizes the role of infrastructural development as a means to accelerate development, maintain or improve current growth rates.

He added that World Class Infrastructure Criss-crosses Africa One of the intended outcomes of PIDA is to address issues of economic marginalization and social exclusion by facilitating the creation of economic opportunities and decent employment.

The CEO further said that it is estimated that up to 15 million new jobs could be created through the construction, operation and maintenance of PIDA projects. And many more will be created through increased economic activity on the continent that infrastructure development will bring.

Adding that AUDA-NEPAD has developed the PIDA Job Creation Toolkit- AFRICAN UNION DEVELOPMENT AGENCY-NEPAD which serves to demonstrate the job creation potential of PIDA projects. The Toolkit is already in operation.

Regarding the implementation of the AfCFTA, “we will support the work of the Secretariat that will be based in Accra, Ghana. I believe that our capacity to work on “soft infrastructure” and help remove nontariff obstacles to intra-trade on the continent will be key for the success of this free-trade area” he noted

Dr Mayaki underlined accountability African Union’s Programme for Infrastructure Development in Africa (PIDA) and its associated instruments has enabled the continent to make remarkable progress in the reconstruction, rehabilitation and development of infrastructure on the continent.

AU Commissioner for Infrastructure and Energy, Amani Abou-Zeid 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 will be selected adding that a project selection criteria was prepared with a participatory approach has been adopted yesterday.

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 investments from the public and private,” she added.

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 is supporting 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.

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

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. Capacity issues-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 drafted a model law for regional infrastructure. 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 de-risking 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. “Access to information is a huge gap. We created a trade information portal,” she said. She said access to foreign currency for instance USD,  is also a huge challenge, she added.

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 per year in the past last seven years.  The need to bridge the financing gap is still present.Last week the EU pledged to extend 1.6 billion euro grant at the African Investment Forum.

HE 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 is obstructing economic growth.  Ambassador Emara stressed the need to expedite infrastructure development projects to achieve the 2063 development agenda

By Angel Navuri – Guardian reporter

Accelerating Regional Infrastructure Development

Accelerating Regional Infrastructure Development

The Presidential Infrastructure Championing Initiative (PICI) was hosted by the Government of the Arab Republic of Egypt in Cairo, on 21 October 2019. The PICI Inter Ministerial Meeting, under the chairmanship of the Minister Mohammed Khalil Abdel Aty with the support of AUDA-NEPAD as the secretariat for PICI, discussed the detailed report that was prepared by the PICI Technical Task Team Workshop at the African Development Bank headquarters in Abidjan, Cote d’Ivoire on 7 and 8 October 2019. This report provides an update on the status of the PICI projects, challenges and the necessary recommendation for interventions from the Champions where needed.

Before the official opening, all Ministers in attendance and Dr Ibrahim Mayaki, CEO of AUDA-NEPAD made a courtesy call to the President of the Arab Republic of Egypt.

In his opening remarks, the Minister Mohammed Khalil Abdel Aty underscored the need to undertake key continental infrastructure projects if the continent is to realise its growth potential through trade. Minister Aty further underscored the need for Africa to develop its capacity to be able to undertake these projects.

Minister Jackson Mphikwa Mthembu (Co-chairperson) of South Africa, spoke on the importance of developing continental Infrastructure. He reiterated that the continent needs to accelerate its infrastructure development to match the growing population and rapid urbanisation to achieve development goals.

Dr Mayaki provided the overarching frame of reference for the PICI and the underpinning success of the model through the Champions who bring visibility, unblock bottlenecks and give critical momentum leading to the acceleration of these projects.

Based on the success in PICI, Dr Mayaki added, the PICI Africa wide IMC will recommend to the AU and the African Union Commission that the PICI model be reflected in this PIDA Review as a positive approach for championing and accelerating the implementation of PIDA projects, and that it should be replicated and strengthened.

Following AUDA-NEPAD’s broadened mandate of the AUDA-NEPAD, Dr Mayaki noted that he is keen to see PICI strengthened and positioned to assist in delivery of these key infrastructure projects is which are essential building blocks in the actualisation of the results anticipated in our continental flagship programmes as articulated in Agenda 2063.

Minister Mustapha Kouraba, Minister of Works and Transport of Algeria presented the progress achieved in implementation of the Trans-Sahara Highway that connect 6 countries – Algeria, Mali, Niger, Tunisia, Nigeria, and Chad. The Minister also presented to the meeting Algeria’s desire to host the next PICI Africa-wide IMC Meeting.

The meeting was also attended by the Deputy Minister Mr Sankwasa James Sankwasa of Namibia and Madam Gnounka Diouf, Minister Counselor of the President from Senegal, representatives from Niger, Rwanda and the African Development Bank. The meeting received a detailed update on the status of all PICI projects. In addition, Sudan requested that the following projects be endorsed and considered as part of the PICI:

  • The Suakin Seaport Harbor which has been previously submitted to the PICI Africa wide IMC, held in Cape Town on 5 February 2019;
  • The Dakar-N’djamena-Port Sudan Railway, and
  • The Babanusa – South Sudan Railway.

The meeting welcomed Sudan and endorsed its membership as part of the PICI. This decision will be shared at the Heads of State level.

The Report from the Inter Ministerial Meeting will be finalised by AUDA-NEPAD and the South African Presidency to be submitted to the African Union Heads of State Summit scheduled for 9-10 February 2020, in Addis Ababa, Ethiopia and to be presented at the Heads of State and Government Orientation Committee on the margins of the AU Summit.

AUDA-NEPAD Introduces Competitive Electricity Market to North Africa

AUDA-NEPAD Introduces Competitive Electricity Market to North Africa

AUDA-NEPAD joined hands with UMA (Union Arab Maghreb) and COMELEC (Magreb Electricity Committee) and organised a workshop for the UMA Countries and Egypt on the introduction of competitive electricity market to the North Africa Region. This is in order to efficiently utilise the enormous energy resources available in North Africa and to enable each country to source electricity on the most competitive prices.

Most of the electricity trade in the North Africa Region is done on a bilateral basis which tie the countries involved on long term sale agreements (years ahead), and denies the countries from utilising the opportunities available in securing electricity on short terms at competitive prices.

A mission headed by Prof Mosad Elmissiry, Senior Advisor at AUDA-NEPAD, was undertaken in Algeria, 9 to 11 September 2019. It was organised with the Southern Africa Power Pool (SAPP) which is the only power pool in Africa that allows electricity trade on an auction basis on one month ahead, one week ahead, one day ahead and even hours ahead, to transfer the knowledge and experiences gained by SAPP to the North Africa Region in the development and implementation of a competitive electricity market in UMA and Egypt.

SAPP covered the stages that the development of a competitive electricity market has to go through, the requirements on hardware and software that needs to be addressed, the intergovernmental and utilities MoUs that need to be signed, the trade rules and sales clearance arrangements and the challenges faced in the introduction of the competitive electricity market. The enormous benefits gained from the introduction of the regional electricity market were highlighted.

North Africa is one the continent’s regions that have the highest electricity access rate, that exceeds 98% and is already connected with Europe, Asia and currently being connected to the Gulf States. It is the gate of Africa to the rest of the world when it comes to electricity trade.

Prof Elmissiry says that with the enormous renewable energy resources that are available in Africa, the African continent has a good chance to export the excess in clean power to Europe and earn substantial income needed for its economic development.

“Africa needs to strategise and plan ahead when oil resources are longer available,” Prof Elmissiry said. He added that with the introduction of the competitive electricity market in North Africa and the current work going ahead with regards the connection between the Eastern Power Pool and SAPP, soon almost half of the countries in Africa will be connected together. They will be able to trade electricity among themselves and beyond, on a competitive basis.

“This is a strong achievement for which Africa should take pride in,” Prof Elmissiry declared.

The engagement in Algeria ended with identifying the challenges that are facing the introduction of the electricity competitive market in the North Africa region and drafting of a road map for solutions.