Africa Finance Corporation and Boston Consulting Group Report Identifies Crucial Steps to Take and Pitfalls to Avoid in Financing Major Infrastructure Projects Throughout Sub-Saharan Africa
LAGOS—Sub-Saharan Africa has a need for well-conceived public-private investment opportunities in the infrastructure space. Currently, road access is just 34% in the region, and two-thirds of people across the continent have no access to power. As a result of the infrastructure gap, 2.6% of GDP growth is lost annually.
Africa Finance Corporation (AFC) and The Boston Consulting Group (BCG) have joined forces to produce a comprehensive report detailing the steps that governments and private investors need to take to overcome the special challenges of investment in the region and to achieve the immense rewards—both social and monetary—of completing successful infrastructure projects there.
Drawing on ten years of hands-on institutional experience in the field, the authors identify lessons in best practices for both governments and investors. Governments must recognize the advantages of public-private partnerships, clarify standards and laws, devise suitable fiscal incentives, formulate integrated infrastructure plans, establish dispute resolution mechanisms, and more. Private investors must adopt a holistic entrepreneur/engineer approach to such projects, taking the long view toward project success, developing deep knowledge of target markets and local dynamics, and recognizing that community engagement is a core priority.
The report also provides ten case studies of major public-private infrastructure projects in the region—including such landmark efforts as the Cenpower Kpone IPP in Ghana, the Lake Turkana Wind Power farm in Kenya, and the Henri Konan Bédié Bridge in Côte d’Ivoire—examining how each evolved, analyzing what went right and what went wrong, and identifying lessons to be learned from each experience.
The future of Sub-Saharan Africa will be shaped in part by the success of appropriate efforts to upgrade its infrastructure. Done properly, such projects will bring tremendous benefits to the people of the region, as well as to those who plan and execute each effort to the lasting advantage of all interested parties.
A copy of the report, titled Infrastructure Financing in Sub-Saharan Africa: Best Practices from Ten Years in the Field, can be downloaded here.
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AFC is a dynamic, international investment grade multilateral finance institution whose mission it is to help bridge Africa’s significant infrastructure gap whilst delivering competitive financial returns, robust economic growth and positive social impact.
Established in 2007 to be the catalyst for private sector infrastructure investment across Africa, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. A successful borrowing programme has raised more than US$3.5 billion for AFC’s activities, including the Corporation’s debut US$750 million Eurobond issue which was over 6 times oversubscribed. In terms of impact, AFC has invested more than US$ 4 billion in projects across 28 African countries to date.
AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital tailored to addressing Africa’s unique infrastructure development needs in the core sectors of power, natural resources, heavy industry, transport, and telecommunications.
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries.