NEPAD-IPPF, a critical instrument to bridge Africa’s infrastructure financing gap

Today, I would like to talk to you about NEPAD-IPPF (NEPAD Infrastructure Project Preparation Facility), which is an extremely important organ for African development, as it helps building essential infrastructure on the continent. That multi-donor Special fund is managed by the African Development Bank on behalf of NEPAD Agency, and is aligned to major continental initiatives such as the Programme for Infrastructure Development in Africa (PIDA), the priority framework to bridge Africa’s infrastructure gap.

The facility was established in response to a call of the G8 countries to address one of the weaknesses of infrastructure development in Africa : the lack of investment-ready, viable projects. Its goal? To prepare high-quality viable projects in energy, trans-boundary water resources, transport and ICT, and make them bankable for investment. NEPAD-IPPF has a critical role : they have to prepare pre-feasibility, feasibility, environmental and social impact studies of the projects, along with providing transaction advisory services to make infrastructure projects across Africa bankable. This responds directly to increasing Africa’s infrastructure stock, which is a pre-requisite to Africa’s regional integration effort. Without NEPAD-IPPF, bridging Africa’s infrastructure would take much longer ! And so would sustainable growth and people’s lives improvement…

Since 2005, NEPAD-IPPF has built its legitimacy on various successes. In eleven years, the facility has prepared over 67 regional infrastructure projects, half of which have been financed over US $7.78 billion. A total of 18 projects have successfully been financed and are being implemented. Three of them have been built, among them the Kariba North Hydropower construction project in Zambia or a new road linking Burundi and Rwanda: the facility contributed US $746,000 towards the feasibility study. The road was officially opened in July 2013 and has improved living conditions around the project area by facilitating better access to basic services, schools and health centres.

I want to emphasize that these projects benefit to all, and not only to large industries ! Thanks to it, medium and small enterprises and households can get increased access and reliability to electricity and various services. Besides, NEPAD-IPPF generates a lot of direct and indirect business opportunities along the infrastructure value chain, ranging from consulting/engineering services, transaction advisory, to construction and equipment supply.

Today there are still challenges : funds and allocations are sometimes difficult to find, and this creates many issues. Indeed, early stage regional project preparation is as expensive as complex, because it involves multiple countries, multiple stakeholders, with legal, social and economic environment that are not always harmonized. NEPAD-IPPF has the ability to handle that complexity and these multiple environments: we cannot leave it under-resourced ! African countries, as beneficiaries, have to put some money into it. But not only them : we need to get new sources interested in our projects, coming from all over the world. They may not be familiar with African infrastructure landscape and we need to build their interest. This is a priority! To bridge Africa’s infrastructure financing of US $100 billion annually, concerted efforts will be required from all concerned.


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