Serame sees new deal boosting implementation
Government has taken up shareholding in Africa 50, an African Development Bank-backed continental financier, in the hopes of improving infrastructure development by better structuring Public Private Partnership (PPP) transactions, BusinessWeek has learnt.
Africa 50, based in Morocco, was established to help bridge Africa’s infrastructure funding gap by facilitating project development, mobilising public and private sector finance, and investing in infrastructure on the continent. Africa50 focuses on medium to large-scale projects that have development impact and offer an appropriate risk-adjusted return to investors.
The institution’s shareholders include 30 countries, two central banks and the African Development Bank, while it also boasts committed shareholder capital of just under $1 billion (P12.9 billion) which it uses to unlock funding from other development finance institutions.
Botswana has taken up $2.7 million equity in Africa 50, adding its name to country shareholders who include Egypt, Mauritius, Senegal, Rwanda, and Zimbabwe.
“We have been looking at a number of approaches and methodologies to move from where we are in terms of implementation and one of the attractions of partnering with Africa 50 is in project structuring, where we have been struggling,” Finance Minister Peggy Serame told a signing ceremony on Tuesday.
“The PPPs have to be well structured to make
them attractive and Africa 50 has experience in that. “We will be working with them to improve that aspect of project selection, project preparation and project structuring around PPPs.”
Serame, who conceded that while the country has had a PPP policy for years, the results have been “not impressive,” added that government wanted work to have started on at least one project before the end of the current financial year.
“I accept as a minister that PPPs are one area where we have not done enough,” she said.
“Look at the sun and the renewable energy space. That’s an area that we can work with Africa 50 and there’s a lot of potential in that.
“The infrastructure deficit which we will have for a number of years is another area that we can work with them.”
Africa 50’s preferred investment sectors include energy, transport, ICT, health, fintech and several others. Since its establishment in 2014, the institution has facilitated over $4.1 billion of capital from private investors and DFIs into various infrastructure projects across the continent. Africa 50 CEO, Alain Ebobisse said the institution had already held discussions with local authorities on some of the possible projects that could be worked on.
“We will do our best to make this a reality and we are interested in working on the country’s strategic areas such as solar power, transport, regional linkages as well as sustainable and green projects,” he said at the signing.
“I want to emphasise our ability to act with speed because not all infrastructure projects are difficult.
Some are simple and we can do them quickly if we work well with government.
“I see many opportunities such as in energy, transport, and ICT and I look forward to engaging further with the line ministries.”
Ebobisse said Africa 50 viewed itself as a bridge between government and the private sector in speeding up project implementation, part of which is achieved by acting as a one-stop shop for early-stage implementation, an activity that includes financing of feasibility studies.
“Our thing is about speed because it takes way too much time to do these projects when it does not have to.
“We have 17 projects we have done and more are being signed.
“We have shown that we can do these things in Africa and it does not have to take time,” he said.
The shareholding in Africa 50 comes after President Mokgweetsi Masisi announced in his recent State of the Nation Address that Botswana would broaden the range of financiers and partners it engages for its development programmes.