Introducing the Dakar Financing Summit Infrastructure projects
Infrastructure development is a key driver for progress across the African continent and a critical enabler for sustainable and socially inclusive growth. The Programme for Infrastructure Development (PIDA) provides the strategic framework for priority projects to transform Africa through the construction of modern infrastructure into an interconnected and integrated continent that is competitive domestically and in the global economy.
The Dakar Financing Summit (DFS) seeks to mobilise key stakeholders around NEPAD's ongoing efforts to accelerate PIDA implementation. These stakeholders include lead government agencies, DFIs, private equity investors, infrastructure funds, commercial banks, pension funds, and insurance companies. The financiers have one goal in common which is a desire to identify and fund well prepared bankable projects in line with the growing investor appetite for infrastructure assets in Africa.
One way to expand the pipeline of bankable projects is to select a number of representative projects and begins to work systematically with national governments, Regional Economic Communities (RECs) and financing partners to drive project implementation through the project preparation cycle. In this regard, the DFS pilots this approach by selecting 16 strategic and regionally balanced projects from the PIDA priority action plan (PAP), which are at different stages of the project development cycle.
The sixteen (16) projects are further grouped into two (2) main categories: “first 8” high impact projects – deemed relatively advanced in terms of readiness; and a “second eight (8)” – Which is relatively at early stage of the project development cycle.
The sixteen (16) projects were selected due to their strategic, political and economic importance as flagship regional projects. Once implemented, these projects will significantly transform the way Africa does business.
There are three (3) broad categories of projects presented below:
Electricity generation, transmission and distribution infrastructure is underdeveloped for most African nations, as a result hindering broad-base economic growth of the continent.
The key to unlocking Africa's potential is identifying opportunities for affordable infrastructure projects that can utilise national and regional energy resources in a way that will benefit the continent. To increase energy access, the continent needs to focus on developing viable energy projects that can attract sufficient funds to be successful and have a significant, long-term impact on the African energy sector. Amongst the 16 DFS projects, two hydropower projects in East and West Africa (Ruzizi III and Sambangalou Dam respectively) and the Nigeria-Algeria Gas Pipeline project are at an advanced stage of financial close.
Moving Africa forward
A number of transport sub-sectors contribute directly to economic development and poverty reduction in Africa. Good quality roads, railways, ports and airports, with good network connectivity, are essential for sustaining the activity and growth of many economic sectors on the continent including agriculture, industry, mining and tourism.
Efficient transport infrastructure can also improve the delivery of, and access to vital social services, such as health and education, and allow citizens to actively participate in labour markets.
Transport infrastructure offers governments and RECs a means to improve the integration of countries. The advanced transport sector projects at DFS include the modernization and capacity expansion projects in ports (Dar-es-Salaam Port Expansion), rail investments (Dakar-Bamako Rail Modernisation) and road corridor modernisation (Abidjan – Lagos Corridor). All of these projects have a major impact on interconnecting the continent and significantly facilitating regional trade and integration. The modernisation of the Abidjan-Ouagadougou-Bamako Multimodal Corridor, for instance, will benefit several countries in the Economic Communities of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU) regions. It will simplify the crossing of borders by people and goods, which will lead to increased regional trade and cost savings. Undoubtedly, the improved efficiency of a vibrant transportation system will in turn speed up regional integration.
The information revolution is changing the way Africans are doing business and accessing basic social services including health, education and civic services. Through such channels, improved access to internet broadband has the potential to increase economic growth. Many high capacity international backbone network projects have been built to connect Africa to the rest of the world on an open access basis, thus allowing a gradual reduction in bandwidth cost and long-distance tariffs. Private African capital has been behind many of the fibre optic submarine cables but there are also public-private partnerships with international investors in promoting connectivity in the continent. Linking these fibre backbones to backhaul terrestrial networks and affordable “last mile” connectivity remains a challenge.
The projects presented at DFS include the Lusaka - Lilongwe ICT link which falls under the PIDA ICT Terrestrial Connectivity. A number of energy transmission line projects are also included which not only connect regional power pools, but can also be used to carry ICT links across borders. The added value of these projects for the African continent is immense. A project like the Lusaka-Lilongwe Terrestrial ICT Cable will increase regional and continental integration by ensuring better, more reliable connectivity for all. It will lead to the accelerated spread of broadband access and reduction of cost of bandwidth through increased competition, thus creating better opportunities for e-business.