Infrastructure Financing Trends in Africa 2017 - ICA REPORT - 2017 WWW.ICAFRICA.ORG
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Infrastructure Financing
Trends in Africa – 2017
ICA REPORT – 2017
WWW.ICAFRICA.ORG
© 2018 The Infrastructure Consortium for Africa Secretariat c/o African Development Bank 01 BP 1387, Abidjan 01, Côte d'Ivoire Disclaimer This report was written by the ICA Secretariat in collaboration with Cross-border Information. While care has been taken to ensure the accuracy of the information provided in this report, the authors make no representation, warranty or covenant with respect to its accuracy or validity. No responsibility or liability will be accepted by the ICA Secretariat, its employees, associates and/or consultants for reliance placed upon information contained in this document by any third party. 2 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017
Infrastructure Financing
Trends in Africa – 2017
ICA REPORT – 2017
WWW.ICAFRICA.ORG
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 3
Acknowledgements
Infrastructure Financing Trends in Africa – 2017 is We express our personal thanks to all those who
the Infrastructure Consortium for Africa’s (ICA’s) contributed data and insights for the report, including:
annual report on how financial resources are being
mobilised to facilitate the development of the Clare Barrington, DFID Ben-Hur Kabengele, AFD
continent’s transport, water and sanitation, energy Malanda Barthelemy, Mascha Klein, BMZ
and ICT sectors. AfDB
Poirotte Ludovic, EU-AITF
The ICA’s flagship report was prepared by the ICA Giovanni Baticci,
MFA/CDP Atadet Azarak Mogro,
Secretariat, consisting of Mike Salawou, ICA Coordinator,
CEEAC
Epifanio Carvalho de Melo and Kouadio Viviane, in Mathilde Bord-Laurans,
cooperation with Cross-border Information (David Burles, AFD Hellen Chimwemwe
Nick Carn, Mark Ford, Irina Gaubinger, Ivana Richardson, Mwatuwa, AfDB
Francis Daniel Bougaire,
David Slater, Ajay Ubhi and Daniel Westbury-Haines) who AfDB Ihcen Naceur, AfDB
were commissioned by the ICA Secretariat. Gregory Briffa, EIB Maimuna Nalubega, AfDB
The ICA Secretariat acknowledges and thanks all those Antonello Carpentieri, David Niyonsenga,
organisations and people without whose help the MFA/CDP NEPAD
production of this consistent annual monitor of Africa’s Osward Chanda, AfDB Fiore Pace, GAC
infrastructure financing and development would not have Stephan Diefenthal, DEG Peter Radloff, KfW
been possible. In particular, special thanks to all ICA Katerina Evzona, DFID
members – the G7: Canada (Chair of ICA), France, Michele Ruiters, DBSA
Gladys Wambui Gichuri,
Germany, Italy, Japan, UK and the USA; Russia; G20 Omar Vajeth, SAPP
AfDB
member South Africa; and MDBs members including the Anna Waldmann, GIZ
EC, EIB, IFC, WB and the AfDB (the host) for their Gianluca Grandi,
MFA/CDP Alvino Wildschutt-Prins,
contribution and guidance in preparing this report.
Etsuko Ito, JICA DBSA
Institutions contributing to the report include: African Ahid Maeresera, SADC
Yuki Ito, JBIC
Development Bank (AfDB), Arab Fund for Economic and
Social Development (AFESD), Global Affairs Canada Jovana Jeftanovic,GIZ Victoria Zabolotnyi, IFC
(GAC), Development Bank of Southern Africa (DBSA), East
African Development Bank (EADB), Eastern and Southern
African Trade and Development Bank (TDB) Ecowas Bank
For Investment And Development (EBID), European Bank
of Reconstruction and Development (EBRD), EU-Africa
Infrastructure Trust Fund (EU-AITF), European
Investment Bank (EIB), Agence Française de
Développement (AFD) of France, Germany’s Kreditanstalt
für Wiederaufbau (KfW), Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) and Deutsche
Investitions- und Entwicklungsgesellschaft (DEG),
International Finance Corporation (IFC), Islamic Data Analysis, Text and Layout
Development Bank (IDB), Italy’s Cassa Depositi e Prestiti
(CDP) and Ministry of Foreign Affairs and International Cross-border Information
Cooperation, Export–Import Bank of India, Japan Bank for www.crossborderinformation.com
International Co-operation (JBIC), Japan International Co-
operation Agency (JICA), OPEC Fund for International Graphics and Maps
Development (OFID), the UK’s Department for
David Burles
International Development (DFID), and the World Bank.
In particular, we also thank those Regional Economic Photos
Communities (RECs) and Regional Power Pools (RPPs) that
iStock/Getty Images: Pages 6, 20, 24, 28, 49, 54, 60, 62, 64,
responded to our request for data to inform this report,
68, 70.
namely Central African Economic and Monetary
Community (CEMAC), East African Community (EAC), Shutterstock: Pages 72,74, 76
Southern African Development Community (SADC) and
Southern African Power Pool (SAPP). EBRD/Dermot Doorly: Page 58
4 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017
Contents
Introduction 6 5.4 Non-ICA European Sources 58
5.5 Other Sources of Financing 60
About Us 6
5.6 Regional Development Banks 63
Foreword 7
Definitions and Acronyms 8
List of Graphics and Maps 10 6. Private Sector 64
6.1 Private Sector Engagement with the Public Sector 64
1. The Big Picture 11
1.1 Key Messages and Findings 12 7. Sectoral Analysis 68
7.1 Overview 68
2. Financing Trends 14 7.2 Transport 70
7.3 Water and Sanitation 72
2.1 Who is Financing Africa’s Infrastructure 14
7.4 Energy 74
2.2 Financing Trends by Sector 16
7.5 ICT 76
2.3 Financing Trends by Region 18
8. Regional Analysis 78
3. Strategic Trends 20
8.1 North Africa 78
3.1 Overview 20
8.2 West Africa 79
3.2 Infrastructure Financing Gap 21
8.3 Central Africa 80
3.3 Intra-African Free Trade 24
8.5 East Africa 81
3.4 Regional Cooperation 25
8.6 Southern Africa 82
3.5 Regional Economic Communities and Power Pools 26
8.7 Republic of South Africa 83
4. ICA Member Financing 28 Annexes 84
4.1 Overview 28
4.2 Types of Funding 30
4.3 Hard vs Soft Infrastructure 32
4.4 Trends in Commitments and Disbursements 33
4.5 Projects Completed 37
4.6 Disbursement Rates 38
4.7 Trends in Regional Infrastructure Portfolios 39
4.8 PIDA/PAP Commitments, Disbursements & Trends 40
4.9 Country Allocations 42
4.10 ICA Member Activities 43
5. Other Public Sources of Financing 48
5.1 African State Spending on Infrastructure 48
5.2 China 54
5.3 Arab Co-ordination Group 56
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 5
About the ICA
The Infrastructure Consortium South Africa joined the ICA as the first objectives of the ICA can be broadly
for Africa (ICA) was launched at G20 country non-G8, and first African defined as follows:
the G8 Gleneagles summit in 2005. country member of the ICA.
• Increase the amount of finance
The membership is the G8
The ICA is a major initiative to going to sustainable infrastructure in
countries, the Republic of South
accelerate progress to meet the urgent Africa from public and private sources;
Africa, the World Bank Group
(WBG), the African Development infrastructure needs of Africa in
• Facilitate greater co-operation
Bank Group (AfDB), the European support of economic growth and
between members of ICA and other
Commission (EC), the European development. It addresses both
important sources of finance including
Investment Bank (EIB) and the national and regional constraints to
African stakeholders, China, India,
Development Bank of Southern infrastructure development with an
Arab Funds and the private sector;
Africa (DBSA). emphasis on regional infrastructure,
recognising the challenges at this • Highlight and help remove policy
African institutions such as the scale. and technical blockages and progress;
African Union (AU), the New
Partnership for Africa’s Development The Consortium is intended to make • Increase knowledge of the sector
(NEPAD) and the Regional Economic its members more effective at through monitoring and reporting on
Communities (RECs) all participate as supporting infrastructure by pooling the key trends and developments.
observers in the meetings of the efforts in selected areas such as
Increasingly, the ICA is working to
consortium. AfDB has hosted the information sharing, project develop-
improve the co-ordination of activities
Secretariat of the ICA since its ment and good practices.
among members, and with other
inception in 2006.
Although ICA is not a financing significant sources of infrastructure
At the May 2011 Annual meeting of agency, the consortium acts as a finance, including China, India, Arab
the Consortium, the decision was platform to broker more financing of and Islamic financiers, African
made to enlarge ICA membership infrastructure projects and regional development banks and the
from G8 to G20. In November 2013, programmes in Africa. The main private sector.
6 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017
Foreword
We have the pleasure of presenting to you the ninth continent and will be an essential component of the North-
edition of the ICA annual report, Infrastructure South (Cape to Cairo) power transmission corridor.
Financing Trends in Africa, 2017. Over the years the
Mobilising funds for infrastructure is critical, and this report
report has become an important document for
shows a high level of interest in new types of funding. In
presenting in a consistent manner how finance is
particular, the report recognises the demand for blended
being mobilised to develop infrastructure across the
finance, in which concessional finance seeks to leverage non-
energy, ICT, transport, and water and sanitation
concessional finance. Infrastructure Financing Trends in
sectors. It also identifies emerging trends on how
Africa, 2017 also reports for the second year that
resources are mobilised effectively to accelerate
organisations are increasingly deploying development
Africa’s infrastructure development.
capital. This is important because it is not a grant, rather it
One of the important issues addressed in this year’s report creates an asset for the investor and can provide modest
is the amount African states spend on infrastructure. Such financial returns alongside significant development impacts.
spending is analysed not only at a national level, but also
at a subnational level – where it can be identified that This year’s report provides examples of how finance has
spending has not been accounted for in federal or national been mobilised for bankable projects likely to have a
budgets. It is important to note that more work is required significant development impact. One example is the
to develop methodologies that adequately capture spending Benban solar park project in Egypt, which shows how a
by state institutions and subnational governments and mixture of public and private sector finance can be
ensure that double counting is avoided. mobilised by establishing sound institutional
arrangements to produce 23 bankable projects.
Another persistent issue is Africa’s infrastructure financing
gap and it is encouraging to see ICA’s own research on Challenges for Africa’s infrastructure remain. More
financing trends contributing to this debate. This year’s bankable projects will be needed to both attract new and
report examines the extent to which the lack of investment in retain existing financiers to help close Africa’s
infrastructure is a matter of limited bankable projects infrastructure financing gap. We hope that more
relative to the availability of financial resources. institutions will join the cohort of financiers who address
Stakeholders interviewed for this report suggest that there the challenges involved, from project preparation to
are enough funds for Africa’s infrastructure development. capacity building, and see opportunities and benefits in
The challenge, however, is creating more bankable projects. financing Africa’s infrastructure.
Other stakeholders maintain the financing gap remains for It is encouraging to see that new financing techniques are
bankable projects.
being developed. The challenge is to continue expanding
Africa is embarking on a journey to create a continental free the range of financial instruments available and
trade area that must fully embrace the need to develop its integrating offerings such as blended finance and
infrastructure. The African Continental Free Trade Area has development capital with conventional instruments such
the potential to transform the continent. But infrastructure as grants and loans that will continue to play a role in
is needed to ensure deeper and broader regional integration, infrastructure financing.
add value to its resources and catalyse growth in intra-
We hope this report will help broaden the range of
African trade. This is particularly important if Africa is to
stakeholders and increase the range of financing
realise its potential in sectors where growth prospects are
techniques used in Africa’s infrastructure development. We
brightest, such as agriculture and food, industry and services.
also hope Infrastructure Financing Trends in Africa, 2017
Regional infrastructure projects must play a key role in
will help stakeholders address the challenge of establishing
promoting equitable and sustainable growth.
sound institutional arrangements that provide the right
This report highlights some notable achievements in Africa’s conditions for public and private sector actors to participate
infrastructure sector. It shows how regional infrastructure in the development of projects. Finally, we hope this report
projects can have the continental impact needed for a fully will help mobilise more finance for Africa’s infrastructure
functioning free trade area. A good example is the Zambia- development.
Tanzania-Kenya Interconnector project which is one of the
Pierre Guislain, Vice President, Private sector, industry
Programme for Infrastructure Development in Africa
and infrastructure, AfDB
Priority Action Plan projects and programmes. Beyond the
regional benefits, the project will connect the southern and Amadou Oumarou, Director Infrastructure and Urban
eastern African power pools and enhance inter-regional development, AfDB
electricity trading by interconnecting the two pools’ grids. The Mike Salawou, Manager Infrastructure Partnerships and
project is expected to create the largest power pool on the ICA Coordinator
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 7
Definitions and Acronyms
Budget Data includes feasibility testing and Ethiopia, Kenya, Seychelles, Somalia,
financial and legal structuring, as well South Sudan, Sudan, Tanzania,
Budget allocations: Total approved as raising capital. Uganda.
government budget for the respective
Southern Africa excluding RSA:
item. Funding
Angola, Botswana, Comoros, Lesotho,
Total infrastructure budget: Sum Commitments: Direct funds Madagascar, Malawi, Mauritius,
of energy, water and sanitation, approved in a given year to projects Mozambique, Namibia, Swaziland,
transport, and ICT budget allocations. over their lifetime. Zambia, Zimbabwe.
Where available, significant multi-
sector or other infrastructure Disbursements: Money outflow RSA: Republic of South Africa.
allocations are indicated separately. going to infrastructure projects during
a given year. Regional Development
ICA Members ODA – official development Banks
Assistance: Grant or loan with public
AfDB, DBSA, EC, EIB, G7 countries Central African States Development
concessional modalities administered
and Russia, Republic of South Africa Bank (CASDB), DBSA (an ICA
by donor government agencies.
and the World Bank Group. In 2011 member), EBID, EADB, West African
all G20 countries were invited to join Non ODA: Non-concessional funding Development Bank (BOAD).
the ICA. The AU Commission, from public or private sources.
NEPAD Secretariat and Regional Regional project: Projects with
Sector
Economic Communities participate direct beneficiaries in more than one Transport: Airports, ports, rail, road.
as observers at ICA meetings. country. These can either be cross-
border projects or other regional Energy: Generation, transmission
Infrastructure integration projects involving a and distribution of electricity and gas
minimum of two countries or national (including pipelines, and associated
Total infrastructure budget: Sum
projects. infrastructure).
of energy, water and sanitation,
transport, ICT, and multi-sector
infrastructure budget allocations.
Location Water and sanitation: Sanitation,
irrigation, (trans-boundary) water
Hard infrastructure: Physical North Africa: Algeria, Egypt, Libya,
resource infrastructure, water supply,
infrastructure. Mauritania, Morocco, Tunisia.
waste (solid & liquid) treatment
West Africa: Benin, Burkina Faso, and management.
Soft infrastructure: Measures to
Cape Verde, Gambia, Ghana, Guinea,
support or accompany the production ICT: Information and communication
Guinea Bissau, Côte d’Ivoire, Liberia,
of physical infrastructure outputs, technology, including broadband,
Mali, Niger, Nigeria, Senegal, Sierra
including research, enabling mobile network, satellite.
Leone, Togo.
legislation, project preparation and
capacity building. Central Africa: Burundi, Cameroon, Multi-sector: Not sector-specific or
Central African Republic (CAR), cross-cutting projects. This could
Project preparation: The include implementation of a PPP unit
Chad, Congo, Democratic Republic of
undertaking of all project preparation or capacity building programmes.
Congo (DRC), Equatorial Guinea,
cycles or development activities
Gabon, Rwanda, São Tomé and
necessary to take an infrastructure Unallocated: Commitments which
Príncipe (STP).
project from identification through cover multiple ICA sectors but which
concept design to financial close. This East Africa: Djibouti, Eritrea, are unable to be accurately allocated.
Acronyms AfDB – African Development Bank AKFED – Aga Khan Fund for Economic
Development
ACG – Arab Co-ordination Group AFESD – Arab Fund for Economic and
Social Development AU – African Union
ADFD – Abu Dhabi Fund for Development
AfIF – EU-Africa Investment Facility BADEA – Banque Arabe pour le
AfCFTA – Africa Continental Free Trade Développement Economique en Afrique
Area AICS – Italian Development Cooperation
Agency BMZ – Germany’s Federal Ministry of
AFD – Agence Française de Economic Cooperation and
Développement AIP – EU’s Africa Infrastructure Platform Development
8 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017
BOAD – Banque Oueste Africaine de G20 – Argentina, Australia, Brazil, OFID – OPEC Fund for International
Développement Canada, China, EU, France, Germany, Development
India, Indonesia, Italy, Japan, Mexico,
CADFund – China-Africa Development
Russia, Saudi Arabia, South Africa, OMVG – Organisation pour la Mise en
Fund
Turkey, UK and US Valeur du Fleuve Gambie
CDP – Italy’s Cassa Depositi e Prestiti
G8 – Canada, France, Germany, Italy, PIDA – Programme for Infrastructure
CGC – China Geo-Engineering Japan, Russia, UK and US
Development in Africa
Corporation
GFI – Global Financial Integrity
CGGC – China Gezhouba Group PIDA/PAP – PIDA Priority Action Plan
Corporation GIZ – Deutsche Gesellschaft für
Internationale Zusammenarbeit PPA – power purchase agreement
COIDIC – China Overseas Infrastructure
Development and Investment HFO – heavy fuel oil PPDF – SADC Project Preparation and
Corporation ICA – Infrastructure Consortium for Development Facility
Comesa – Common Market for Eastern Africa
PPI – World Bank’s Private Participation
and Southern Africa ICD – Islamic Corporation for the in Infrastructure
CRBC – China Road and Bridge Development of the Private Sector
PPP – public-private partnerships
corporation IDA – International Development
CSP – concentrated solar power Association PV – photovoltaic
DBSA – Development Bank of Southern IDB – Islamic Development Bank rAREH – responsAbiity Renewable
Africa IFC – International Finance Corporation Energy Holding
DEG – Deutsche Investitions- und
IFU – Denmark’s DFI RBD – regional development bank
Entwicklungsgesellschaft
IPP – independent power producer REC – Regional Economic Community
DFI – Development finance institutions
JBIC – Japan Bank for International Co-
DFIC –Development Finance Institute REIPPP – South Africa’s Renewable
operation
Canada Energy Independent Power Producer
JICA – Japan International Co-operation Procurement programme
DFID – UK’s Department for International
Agency
Development
RIPDM – SADC Regional Infrastructure
KFAED – Kuwait Fund for Arab Economic
DRC – Democratic Republic of Congo Development Master Plan
Development
EAC – East African Community RPP – regional Power Pool
KfW – Germany’s development bank
EAIF – Emerging Africa Infrastructure
LPG – liquefied petroleum gas RSA – Republic of South Africa
Fund
EAPP – Eastern Africa Power Pool MAECI – Italy’s Ministry of Foreign Affairs SADC – Southern African Development
and International Co-operation Community
EBID – Ecowas Bank for Investment and
Development MCC – US’ Millenium Challenge
SBM – State Bank of Mauritius
Corporation
EBRD – European Bank for
MENA – Middle East and North Africa SFD – Saudi Fund for Development
Reconstruction and Development
EC – European Commission MIGA – Multilateral Investment SGR – standard gauge railway
Guarantee Agency
Ecowas – Economic Community of West SNCFT – Société Nationale des Chemins
African States NDB – BRICS’ New Development Bank de Fer Tunisiens
EDC – Canada’s Export Development NEPAD – New Partnership for Africa’s
TDB – Trade and Development Bank
Corporation Development
NEPAD-IPPF – NEPAD Infrastructure TTA – DFID Tripartite Trust Account
EGAS – Egyptian Natural Gas Holding
Company Project Preparation Facility
UNECA – United Nations Economic
EIB – European Investment Bank NIPP – National Integrated Power Project Commission for Africa
ENH – Mozambique's Empresa Nacional NPCA – NEPAD Planning and Co- WBG – World Bank Group
de Hidrocarbonetos ordinating Agency
YMI – Yapi Merkezi Insaat ve Sanayi
EU – European Union ODA – official development assistance
OECD – Organisation for Economic Co- ZPC – Zimbabwe Power Company
EU-AITF – EU-Africa Infrastructure Trust
Fund operation and Development ZTK – Zambia-Tanzania-Kenya power
FMO – Netherlands’ DFI OeEB – Austria’s development bank transmission interconnector
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 9
Graphics and Maps
Figure 1: ICA member commitments & disbursements, 2013-17 12 Figure 45: Allocations to infrastructure in national budgets,
Figure 2: Infrastructure commitment trends by source, 2013-17 12 2017, as percentage of GDP 51
Figure 3: Infrastructure commitment trends by sector, 2013-17 12 Figure 46: Percentage of infrastructure allocations in
Figure 4: Total infrastructure financing in 2017 by source 13 national budgets by sector and region, 2017 51
Figure 47: Total 2017 infrastructure capital expenditure
Figure 5: Total infrastructure financing in 2016 by region 13
allocations in national government budgets, by sector 51
Figure 6: Total infrastructure financing in 2017 by sector 13
Figure 48: Chinese commitments by sector, 2012-17 54
Figure 7: Reported and identified financing flows into Africa’s
Figure 49: Chinese commitments by region, 2012-17 55
infrastructure, 2017 14
Figure 50: ACG commitments by sector and region, 2013-17 56
Figure 8: Sources of finance 2017, public external and private 15
Figure 9: Infrastructure commitments by sector & region, 2017 15 Figure 51: ACG commitments, by member, 2013-17 57
Figure 10: Infrastructure commitments by sector & source, 2017 16 Figure 52: Non-ICA European commitments by source, 2017 58
Figure 11: Total infrastructure financing by sector, 2013-17 17 Figure 53: Non-ICA European commitments by sector, 2017 59
Figure 12: ICA member commitments by sector, 2013-17 17 Figure 54: Non-ICA European commitment by region, 2017 59
Figure 13: Average annual total infrastructure financing Figure 55: Indian commitments by sector, 2013-17 61
by sector, 2013-2017 17 Figure 56: BOAD commitments by sector, 2017 63
Figure 14: 2017 infrastructure commitments by region & source 18 Figure 57: EBID commitments by sector, 2017 63
Figure 15: Total infrastructure financing by region, 2013-17 19 Figure 58: TDB commitments by sector, 2017 63
Figure 16: ICA member commitments by region, 2013-17 19 Figure 59: PPI Project Database trends, 2013-17 64
Figure 17: Average annual total infrastructure financing Figure 60: Private sector financing by sector, 2017 64
by region, 2013-17 19
Figure 61: Private sector financing by region, 2017 64
Figure 18: Infrastructure financing needs by sector 21
Figure 62: Total financing by sector and source, 2017 69
Figure 19: Average annual commitments by sector 2012-17 21
Figure 63: Total transport sector financing by source, 2013-17 71
Figure 20: ZTK Interconnector and regional power pools 25
Figure 64: Total transport sector financing by region, 2016 70
Figure 21: Implementation status of EAC priority projects 26
Figure 65: Total transport sector financing by region, 2017 71
Figure 22: ICA member 2017 commitments by sector 28
Figure 66: Transport sector financing by type of funding, 2017 71
Figure 23: ICA member 2017 commitments by region 28
Figure 67: Transport financing by sub-sector, 2017 71
Figure 24: ICA member 2017 commitments by type of funding 30
Figure 68: Total water sector financing by source, 2013-17 73
Figure 25: ICA member 2017 hard/soft/project preparation
infrastructure commitments 32 Figure 69: Total water sector financing by region, 2016 72
Figure 26: ICA member 2017 hard/soft/project preparation Figure 70: Total water sector financing by region, 2017 73
infrastructure disbursements 32 Figure 71: Water sector financing by type of funding, 2017 73
Figure 27: ICA member commitments by sector, 2010-17 33 Figure 72: Water financing by sub-sector, 2017 73
Figure 28: ICA member commitments by region, 2010-17 33 Figure 73: Total energy sector financing by source, 2013-17 75
Figure 29: ICA member 2017 commitments by donor & region 34 Figure 74: Total energy sector financing by region, 2016 74
Figure 30: ICA member 2017 disbursements by donor & region 34 Figure 75: Total energy sector financing by region, 2017 75
Figure 31: ICA member 2017 commitments by sector & region 35 Figure 76: Energy sector financing by type of funding, 2017 75
Figure 32: ICA member 2017 disbursements by sector & region 35 Figure 77: Energy financing by sub-sector, 2017 75
Figure 33: ICA member disbursements by sector, 2013-17 35 Figure 78: Total ICT sector financing by source, 2013-17 77
Figure: 34: ICA member supported projects completed Figure 79: ICT energy sector financing by region, 2016 76
in 2017 – commitments and disbursements 37
Figure 80: Total ICT sector financing by region, 2017 77
Figure 35: ICA member supported projects completed
in 2017 – breakdown by sector 37 Figure 81: ICT sector financing by type of funding, 2017 77
Figure 36: ICA member supported projects completed Figure 82: ICT financing by sub-sector, 2017 77
in 2017 – breakdown by region 37 Figure 83: Financing to North Africa by sector & source, 2017 78
Figure 37: Disbursement rates per sector for selected ICA Figure 84: Trends in North Africa financing by source, 2013-17 78
member projects completed in 2017 38 Figure 85: Financing to West Africa by sector & source, 2017 79
Figure 38: Trends in regional infrastructure portfolios, 2010-17 39 Figure 86: Trends in West Africa financing by source, 2013-17 79
Figure 39: Specified ICA member commitments to PIDA projects 41 Figure 87: Financing to Central Africa by sector & source, 2017 80
Figure 40: ICA member reported country-level Figure 88: Trends in Central Africa financing by source, 2013-17 80
commitments by region, 2017 42
Figure 89: Financing to East Africa by sector & source, 2017 81
Figure 41: ICA member reported 2017 country-level
commitments, $ spend per capita and as percentage of GDP 42 Figure 90: Trends in East Africa financing by source, 2013-17 81
Figure 42: Government budget allocations by sector, 2013-17 49 Figure 91: Financing to Southern Africa by sector & source, 2017 82
Figure 43: Government budget allocations by region, 2017 49 Figure 92:Trends in Southern Africa financing by source, 2013-17 82
Figure 44: Allocations to infrastructure in national budgets, 2017, Figure 93: Financing to RSA by sector and source, 2017 83
by $ per capita Figure 94: Trends in RSA financing by source, 2013-2017 83
10 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 20171. The Big Picture 2017
Total funding reached $81.6bn in 2017
Funding increased by 22% It came from
Ð11%
6%
22%
Ð21%
ICA members
$19.7bn
(24.1%)
African national
governments
$34.3bn Arab Co-ordination
(42.1%) Group $3.0bn (3.7%)
China
$19.4bn
Private
(23.8%)
2016: $66.9bn
sector
2013: $83.3bn
2014: $75.4bn
2015: $78.9bn
2017: $81.6bn
$2.3bn
(2.8%)
Other bilaterals/
multilaterals
$2.9bn (3.5%)
And these sectors Went to these regions
North Africa
Transport $34.0bn (41.7%) $15.9bn
(19.5%)
Water $13.2bn (16.2%)
West Africa Central
$22.0bn Africa
Energy $24.8bn (30.4%) (27.0%) East Africa
$6.0bn $15.8bn
(7.4%) (19.4%)
ICT $2.3bn (2.8%)
Southern Africa
excluding RSA
$12.2bn (15.0%)
Multi-sector $5.1bn (6.3%) Pan-African
$0.9bn (1.1%)
RSA
$8.7bn
Unallocated $2.2bn (2.7%)
(10.7%)
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 111.1 Key Messages and Findings
African national governments Other/unallocated
Overall commitments to Africa’s
infrastructure from all sources Private sector Multi-sector
increased to $81.6bn in 2017 from Other bilaterals/multilaterals ICT
$66.9bn in 20161. Though fewer China Energy
90 90
ICA members reported data this Arab Co-ordination Group Water
year than in the past, this is ICA members Transport
$bn $bn
the highest level of directly com- Total: 83.3 Total: 83.3
parable commitments report-ed 30.5 81.6 2.0 81.6
80 34.3 80 2.2
since 2010. 78.9 2.3 78.9
24.0 1.9 1.0 5.1
75.4 75.4 2.2
28.6
Factors driving the higher 9.1 2.7 2.4
2.3
commitments include a $13bn 8.4 domestic
2.6
33.5
bond issue
70 70 24.8
increase in identified Chinese 0.7 sub-national
2.4
financing
investments from $6.4bn to $19.4bn, 66.9 66.9
24.1
30.7 3.4
and a $3.7bn increase in African 34.5
national and subnational government 2.8
60 60
spending from $30.7bn to $34.4bn. 1.7
20.6
According to the World Bank’s Private
7.4
Participation in Infrastructure (PPI)
8.8
Project Database, the value of 50 50
projects with private sector 11.2
2.4 2.3 13.2
participation reaching financial 20.9 2.9
close in 2017 totalled $5.2bn, an 2.0 9.4
40 13.4 19.4 40
increase from the $3.6bn reported in 7.5
2016. Of this, $2.3bn (44.8%) was 12.2
37.3
2.6
privately financed.
3.1 34.2 34.0
30 30 32.4
Commitments from ICA members 2.9
6.4
to Programme for Infrastructure 3.3 3.5
Development in Africa Priority 25.3 3.1
26.2
4.4 5.5
Action Plan (PIDA/PAP) projects 7.0 3.0
20 3.4 20
Power
amounted to $2.8bn, one-third Africa 19.8 19.7
higher than the $2.1bn committed to 18.8 18.6
PIDA from all sources in 2016.
ICA members committed $19.7bn 10 10
to African infrastructure projects
ICA commitments (annual average: $20.4bn)
0 0
ICA disbursements (annual average: $12.3bn)
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
25.3
25 Figure 2 Figure 3
$bn 7.0 Infrastructure commitment trends by Infrastructure commitment trends by
Power source, 2013-2017 sector, 2013-2017
19.8
19.7
20 Africa
18.8
18.6
in 2017, an increase of 5% from the been adjusted to include identified
15 $18.6bn reported in 2016. This subnational spending.
13.4
13.0
represents one of the highest
12.6
Commitments from non-ICA
11.3
10.9
commitments since the ICA began
10
collecting data in 2010, only slightly member bilaterals and multi-
below the 2015 high of $19.8bn. laterals (excluding China) to
5 African infrastructure projects
African state spending on infra-
reached $5.8bn in 2017. Of this, the
structure, which for the first
0 Arab Coordination Group (ACG)
time includes subnational state
2013 2014 2015 2016 2017
spending, where it can be identified, committed $3bn compared with the
Figure 1
increased from $30.7bn in 2016 to $3.8bn and $4.4m recorded in 2016 and
ICA members’ commitments and
disbursements, 2013-2017 $34.4bn in 2017. Data for 2016 have 2015, respectively.
12 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017India committed just over $700m Soft infrastructure commitments recent years, this is likely to
to infrastructure projects in 2017, declined to $1.5bn in 2017 from underestimate the average annual
the highest level since 2013. However, $1.7bn in the previous year. amount committed to Africa’s infra-
this is down from the high amount of Although this is higher than the structure over recent years. Analysis in
$1.2bn committed in 2016. Identified $1.3bn reported in 2015, it remains this report shows average commit-
commitments made by South Korea in below the $2.3bn and $1.8bn reported ments over the last six years of $77bn,
2017 stood at $10m compared with in 2014 and 2013, respectively. ICA suggesting an annual financing gap
$432m in 2016, but this was a member commitments made to project over the period 2012-17 in the
significantly high figure compared preparation fell from $245m in 2016 to $53bn-$93bn range.
with previous years. $120m in 2017. After recovering to
The infrastructure financing gap
$1.4bn in 2016, soft infrastructure
With commitments of $34bn, the is certainly wider in some sectors
disbursements declined to $717m.
transport sector continued to be than others. In this regard, the water
the largest beneficiary of infra- ICA members disbursed $10.9bn in sector is a source of concern, with an
structure commitments in 2017 by 2017, below the 2011-2016 average 81-84% shortfall in its annual
a significant margin. Financing of which ranges between $11.4bn-13.4bn. financing requirement. But the
transport infrastructure was equal to Consistent with reporting in previous transport sector is short of its
years, the majority of disbursements in financing requirement by only 8%.
41.7% of all funding. As with previous
2017 were directed towards the energy This gap is considered very low.
years, most of the $20.1bn was
provided by African national or sector (44%).
Public and private stakeholders
subnational governments. The energy Recent estimates by the AfDB consulted in the preparation of
sector, which recorded $24.8bn of published in its African Economic this report said the main reasons
investments in 2017, accounted for Outlook, 2018 suggest that Africa’s for Africa’s infrastructure deficit
30.4% of the total. The water sector annual infrastructure financing centre not on a lack of funds but a
accounted for $13.2bn (16.2%), followed requirements amount to $130bn– lack of bankable projects. As noted
by multi-sector investments, which $170bn with a gap in the range of in previous years, countries with sound
registered $5.1bn (6.3%). $68bn–$108bn. institutional arrangements are
attracting public and private sector
Official development assistance Data analysed for Infrastructure finance. Subsectors attracting
(ODA) financing accounted for Financing Trends in Africa, 2017 investment include renewable energy
62% of all ICA member commit- suggests a slightly narrower generation, ports and maritime
ments and non-ODA financing financing gap than that in the activities and mobile telephony. n
accounted for 25%. ICA members African Economic Outlook, 2018.
were unable to provide data on the The latter is based on total
remaining 13%. About two-thirds of commitments of $62.5bn as stated in
member disbursements in 2017 were Infrastructure Financing Trends in
from ODA sources, with the remaining Africa, 2016. Given that commitments 1
Due to new data, the 2016 figure of $62.5bn
third being non-ODA. reported in 2016 were the lowest in has been restated in this report as $66.9bn.
Pan-African Multi-sector Unallocated
$0.9bn $5.1bn (6.3%) $2.2bn
RSA (1.1%) (2.7%)
$8.7bn ICT
North Africa $2.3bn (2.8%)
ICA members (10.7%)
$15.9bn
$19.7bn (19.5%)
(24.1%) Southern Africa
African national excluding RSA Transport
governments Arab $12.2bn (15.0%) $34.0bn
$34.3bn Total: Co-ordination Total: Energy Total: (41.7%)
(42.1%) $81.6bn Group $81.6bn $24.8bn $81.6bn
$3.0bn (3.7%) (30.4%)
West Africa
East Africa $22.0bn
China $15.8bn (27.0%)
Private sector $19.4bn (19.4%)
$2.3bn (2.8%) (23.8%) Central Water
Other bilaterals/ Africa $13.2bn
multilaterals $6.0bn (16.2%)
$2.9bn (3.5%) (7.4%)
Figure 4 Figure 5 Figure 6
Total infrastructure financing in 2017 Total infrastructure financing in 2016 Total infrastructure financing in 2017
by source by region by sector
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 132. Financing Trends
Europe Arab Co-ordination Group
EC EU-AITF France Germany UK Italy Non-ICA AFESD IDB KFAED ADFD OFID BADEA SFD
0 39 2,123 838 623 89 1,604 1,043 597 500 449 181 119 97
$m
ICA members
are shown in Asia
orange type
19,403 China
The Americas
292
US
2,361 Japan
19
Canada 704
India
10
South Korea
African national
34,345 Figure 7
governments
Reported and
3,364 6,993 1,889 523 497 453 74 14 identified
financing flows
AfDB World Bank EIB IFC DBSA BOAD TDB EBID into Africa’s
2,324 infrastructure,
Multilateral development banks Regional development banks Private sector
2017
2.1 Who is Financing Africa’s Infrastructure
A total of $81.6bn was committed to contribution of $7bn to 2013 figures, this decline is lower investments from
Africa’s infrastructure develop- this is the highest figure reported by India.
ment in 2017. The corresponding ICA members since 2010 when
The upward trend of ACG commit-
commitment for 2016 was $66.9bn. commitments of $29.1bn were reported.
ments in recent years appears to be
The difference of $14.7bn, equiv- For 2017, no data were received from
declining. For example, commitments
alent to a 22% rise, was largely due the EC for Infrastructure Financing
from the Arab funds dropped from
to a $13bn increase in reported Trends in Africa. In the previous three
$5.5bn in 2016 to $3bn in 2017.
Chinese investments from $6.4bn years the EC committed an annual
Commitments from non-ICA European
to $19.4bn, and a $3.7bn increase in average of $822m to Africa’s
development finance institutions (DFIs)
African national and some sub- infrastructure development.
and multilaterals increased signifi-
national government spending
Chinese funding appears to be back in a cantly from $393m in 2016 to $1.6bn in
from $30.7bn to $34.4bn.
big way, but the amounts of identified 2017. In 2017, private sector funding as
African state spending on infra- funding from China vary substantially reported on the World Bank’s Private
structure, which for the first time in this from year to year. The $19.4bn of Participation in Infrastructure Project
report includes subnational state Chinese funding in 2017 is similar to Database reached a low of $2.3bn.
spending where it can be identified, the $20.9bn announced in 2015.
The New Development Bank (NDB),
increased from $30.7bn in 2016 to However, it is substantially higher than
the multilateral development bank
$34.4bn in 2017. Data for 2016 have the $6.4bn and $3.1bn reported in 2016
established by the BRICS states,
been adjusted to include identified and 2014, respectively.
reported no commitments to Africa in
subnational spending.
Contributions from non-ICA bilaterals 2017. Africa50, the infrastructure
ICA members committed $19.7bn in and multilaterals apart from China investment platform established by
2017, up from $18.6bn in 2016. decreased from around $3.1bn in 2016 AfDB, indicated that it would invest
Excluding the exceptional Power Africa to $2.9bn in 2017. The main reason for $8m in the Egyptian energy sector.n
14 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 201723,248
24,000 22,478
2013 2014 2015 2016 2017
$m
20,000
50
47.5
$bn 44.1 44.8
40
33.7
15,894
28.0
16,000 30
20
7,442 (private investment only)
Total public
12,679
10
external financing
11,864
12,000
11,046
0
9,983
2013 2014 2015 2016 2017
9,442
9,177
8,764
8,000
7,115
6,462
6,458
5,784
5,654
5,528
5,419
5,316
5,124
7,000 2,899
4,412
Power privately
3,460
4,000 Africa financed
3,296
2,986
2,555
2,324
2,183
2,134
1,562
1,347
1,038
1,001
693 Figure 8
311
140
0 Sources of
Asia Multilateral Europe Arab Regional Americas Private finance 2017,
development Co-ordination development sector public external
banks Group banks and private
Public external financing
Total:
35,000 34,041 Unallocated 2.5%
Multi-sector 1.4%
132 Pan-African ICT 1.7%
3,995
$m RSA
Energy
Southern Africa 30.8%
Transport
30,000 excluding RSA 47.0%
5,768 Water
East Africa 16.5%
0.2%
Central Africa North Africa 1.4%
0.2% 2.7%
$15,875m
West Africa 19.0%
25,000 24,777
18.4%
North Africa 405 31.7% 51.2%
8,082 2,178 4.2%
25.6%
3,763 38.5% 7.0%
East Africa
20,000 $15,796m
West Africa Central Africa
$22,010m $6,017m
3,001
21.7% 27.0%
0.2%
2.4%
15,000 1,622
34.4% 14.3% Southern Africa
2,070
13,178 excluding RSA
6,984
184 $12,242m
8,468 4.6% 0.03%
2,312 RSA
4.3%
$8,694m
0.9% 1.5%
10,000 1,609
30.7% 47.1%
25.1%
4,047 46.0%
26.6% 13.1%
7,458
5,000 5,132
863 4,893
1,540 89 124 0 Figure 9
79 129 0
2,269 531 566 2,169 4 Total 2017
2,623 215 26 426
145 9
0 1,307 infrastructure
933 4,052 33
0 277 225 399 commitments by
Transport Water Energy ICT Multi-sector Other Unallocated sector and region
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 152.2 Financing Trends by Sector
35,000 Total:
34,041
20,117
$m
African national governments
30,000 Private sector
Other bilaterals/multilaterals
China
25,000 24,777
5,581 Arab Co-ordination Group
ICA members
20,000
1,945
1,306
15,000 9,046
360 13,179
783
3,390 5,876
10,000
1,267
8,125 19
1,841 243 Figure 10
1,126 5,132
5,000 5,773
593
600 3 2,169
Total 2017
4,607 0 0 n.a.
2,269 1 525 2,169 n.a.
infrastructure
1,051 4,075 n.a. commitments by
0 0 0 n.a.
0 618 528 n.a. sector and source
Transport Water Energy ICT Multi-sector Other Unallocated
Commitments from all sources to ICA members’ commitments to the In 2017, ICA members’ water sector
all sectors were higher in 2017 transport sector peaked at $8.1bn in commitments amounted to $4.6bn,
than they were in 2016. Transport 2017. The previous high was in 2010 slightly less than the $4.7bn reported
sector commitments increased the when members committed $6.9bn to in 2016. Members’ average annual
most from $26.2bn in 2016 to $34bn the sector. The annual eight-year commitments from 2010 to 2017 now
in 2017. This represents a 30% average of ICA members’ transport amount to $4.1bn. ICA members
increase. Over the same period commitments in the 2010-2017 period reported water sector commitments of
commitments to energy were up now stands at $5.6bn. $3.2bn in 2015 compared with the
by 20%, from $20.6bn to $24.8bn. $3.4bn in 2014 – substantially less
The corresponding increase in African state spending on transport than commitments of $5bn and $4.7bn
commitments to ICT was 37%, from reached $20.1bn in 2017, up by 23% in 2013 and 2012, respectively.
$1.7bn in 2016 to $2.3bn in 2017. An from $16.3bn in 2016. However there
were wide regional variations. For In 2017 China committed $1.8bn, of
8% rise in commitments to the
example, transport spending in both which $1.5bn is for the construction of
water sector from $12.2bn in 2016
East and Southern Africa increased by the Gerbi Dam in Ethiopia to provide
to $13.2bn in 2017 was the lowest of
a little more than 50%. water to Addis Ababa.
all the sectors.
African state spending in the water
Transport Water
sector declined by 3% from $6.1bn in
For the transport sector, commitments Overall commitments to the water 2016 to $5.9bn in 2017. In the same
of $34bn in 2017 are more than the six- sector from all sources increased by 8% period, Central African state
year annual average of $32.4bn. from $12.2bn in 2016 to $13.2bn in allocations declined by 67 %, from
Commitments to this sector peaked in 2017. It is important to note that there $379m to $123m. In Southern and
2013 when China announced are wide regional differences in the North Africa spending declined by 28%
approximately two-thirds of all changes in these commitments. In this and 16 %, respectively. The only region
investments, including $3.75bn to regard, East Africa recorded the that saw substantially increased state
finance the construction of the highest increase with spending rising allocations was West Africa. Its
Mombasa-Nairobi railway in Kenya, by 64% from $2.4bn in 2016 to $4bn in spending increased by 29%, from
and $3.3bn towards the construction of 2017. There was little change in $496m in 2016 to $641m in 2017.
a railway linking the Ethiopian capital spending in South Africa, North Africa
and Central Africa. Between 2016 and
Energy
Addis Ababa with Djibouti’s port-
capital on the Red Sea. In 2017, 2017, water sector spending declined by Overall commitments from all sources
Chinese investments in the sector were 28% in West Africa and by 14% in to energy increased by 20%, from
$3.4bn compared to $1bn in 2016. Southern Africa. $20.6bn in 2016 to $24.8bn in 2017.
16 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017During the same period, Southern Africa energy 90
Transport Water Energy ICT
commitments in Southern Africa increased by 137%, from Total:
$bn
$1.6bn in 2016 to $3.8bn in 2017. Between 2016 and 2017, 83.3 Multi-sector Other/unallocated
2.0
81.6
North and West Africa increased their energy sector funding 80 78.9
2.3 2.2
by about 50% each. For Central Africa, the corresponding rise 1.9 75.4 1.0
2.2 5.1
in energy commitments was 14%. On the other hand, in 2.7 2.4
2.3
70 2.6
South Africa commitments to the energy sector decreased by 66.9
2.4
4 %. Commitments to the energy sector in East Africa
3.4
declined substantially, by 42%.
2.8
60 28.6
1.7
ICA member commitments to energy declined from $7.7bn 24.8
in 2016 to 5.8bn in 2017, the lowest level since 2013 when 24.1
33.5
$5.7bn of commitments were reported. Members’ annual
50 20.6
commitments over the eight-years from 2010 to 2017
averaged $7.5bn. Energy commitments from members
peaked in 2010, due to large commitments to North Africa 11.2
40
and the Eskom Investment Support Project for South 13.2
9.4
Africa. 7.5
12.2
African state budget allocations to the energy sector 30
increased by 26%, from $4.4bn in 2016 to $5.6bn in 2017.
The highest increase was in Southern Africa where
allocations doubled from $1.1bn in 2016 to $2.2bn in 2017. 20
Allocations remained reasonably steady in West and East 37.3
34.2 34.0
32.4
Africa and South Africa. In Central Africa, energy sector
26.2
allocations declined by 9%. 10
ICT
ICT commitments increased by 37%, from $1.7bn in 2016 to 0
$2.3bn in 2017. The commitments in 2014 and 2015 were 2013 2014 2015 2016 2017
$2.3bn and $2.5bn, respectively.
ICA member commitments in 2017 amounted to $618m, up 30
Total:
from $417m in 2016. This is close to the amount of $600m 25.3
$bn
reported in 2015. Over the last eight years and after falling 1.5
0.4
to very low levels in 2011 and 2012, average annual ICA 20 18.8 19.8 18.6 19.7
0.6 0.5
member commitments to ICT infrastructure stand at $392m. 2.2 0.6 0.8 0.6
0.4
13.0 0.5 5.8
8.6 7.7
Between 2012 and 2016, Chinese average annual funding of 9.2
10
ICT infrastructure amounted to just $339m. In 2017, China 4.6
5.0 3.2
4.7
announced ICT investments of $1.1bn. African state 3.4
6.8 8.1
spending on ICT declined by 33% to $600m in 2017 compared 5.3 3.6 5.0
0
with $894m in 2016. Spending by Central and Southern
2013 2014 2015 2016 2017
African governments declined by 70% and 89%, respectively.
East Africa allocated 159% more to ICT in 2017 than it did in 32.8
2016 while North and West Africa reported increases in 30
budget allocations of 70% and 25%, respectively. During this 26.3
period, South Africa reported an 11% increase in ICT $bn
allocations.n 20
Figure 11
Total infrastructure financing by sector, 2013-2017 10.7
10
Figure 12
ICA member commitments by sector, 2013-2017 (middle)
2.1 3.0
Figure 13
Average annual total infrastructure financing by sector, 2013- 0
2017 (bottom) Transport Water Energy ICT Multi-sector
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 172.3 Financing Trends by Region
24,000
$m 22,010
African national governments
3,620
20,000 Private sector
Other bilaterals/multilaterals
704 China
Total: 530
16,000 15,875 11,474
15,796 Arab Co-ordination Group
6,522 8,382 ICA members
12,242
12,000 6,196
1,137
8,694
8,000 6,694
1,559 6
2,739 51
1,447
6,017
321
2,926 591
795
4,000 1,555 1,307
4,886 528
4,092 58
3,654 156 3,769 n.a. Figure 14
936 94 0
50
0 35 Total 2017
1,855 1,500 0 934 0
0 infrastructure
0 495 0 899
commitments by
North West Central East Southern Africa RSA Pan-African region and source
Africa Africa Africa Africa excluding RSA
Of the $81.6bn total financing commitments to West Africa were little lower than the five-year annual
commitments from all sources to substantially reduced. State funding average of $4.4bn.
all infrastructure sectors in 2017, fell from $4.9bn in 2016 to $3.6bn in
With commitments of $15.9bn, North
West Africa accounted for $22bn, 2017. ACG commitments declined
Africa reported the highest level of
North Africa $15.9bn, East Africa from $1.5bn to $795m in the same
commitments since 2014 when it
$15.8bn, Southern Africa $12.2bn, period.
received commitments of $23.2bn.
South Africa $8.7bn and Central
West Africa has also experienced a Average annual commitments over
Africa $6bn. Intraregional and
significant decline in private sector the last four years amount to $16.1bn.
pan-African commitments totalled
investment to just $704m in 2017. In Investments in 2017 were bolstered
$934m.
2013 private investments of $5.4bn by strong private sector interest
Central Africa is a concern because it were reported. The private sector backed by DFI support for the Benban
witnessed a decline in funding from invested $1.3bn in 2015 and $1.5bn in solar project in Egypt. State spending
$7.9bn in 2016 to $6bn in 2017. 2016. of $6.5bn in 2017 was the most the
Funding for the region had been on an region has committed in the last five
upward trend reaching $8.3bn in 2014 East Africa reported commitments of years.
but falling to $4.9bn in 2015. The $15.8bn in 2017, 23% higher than the
$12.9bn reported in the previous year Southern Africa’s commitments for
decline is attributed mainly to
but substantially lower than the five- 2017 of $12.2bn is almost double the
reduced budget allocations by the
year high of $23.7bn reported in 2013 $6.5bn reported in the previous year.
region’s federal governments.
when Chinese funding of major But 2016 was a year with
West Africa had the highest railway projects in Kenya and exceptionally low commitments. From
commitments in 2017 of $22bn, about Ethiopia were announced. Funding 2013 to 2015 commitments averaged
27% of all infrastructure investments from China amounted to $9.3bn in $15.4bn. Over the past five years,
in Africa. The region’s leading position state funding has declined
2013 whereas in 2017 the Chinese
is largely due to Chinese funding of considerably in the region, from $12bn
announced financing of $4.5bn.
11.5bn ($2.3bn in 2016), of which in 2013 to $6.2bn in 2017, although
$5.8bn is for the 3,050MW Mambilla State spending in East Africa at the latest figure is an increase on the
hydroelectric power project in Nigeria. $8.4bn is the highest in the last five $4.7bn reported in 2016. ICA
ICA member funding for the region years during which budget allocations members’ commitments of $3.8bn to
amounted to $4.9bn ($4.6bn in 2016). have amounted to between $5.6-7.3bn. the region in 2017 are the strongest in
Both state funding and ACG ICA members’ funding of $4bn is a the last five years over which the
18 | INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017average annual amount committed is 90 North West Central East
$2.3bn. ICA members’ commitments Africa Africa Africa Africa
T Total:
$bn Southern Africa RSA Pan-African
amounted to $1.4bn in 2016. 83.3
excluding RSA 81.6
1.6
80 78.9 0.9
In the Republic of South Africa
7.8 75.4 2.2
commitments to infrastructure amounted 8.7
1.4
to $8.7bn. This amount is about the same 4.9
70 11.7 66.9
as the $8.6bn committed in 2016.
However, South Africa’s infrastructure 1.4
16.2 12.2
spending is variable compared with other 14.4 8.6
60
regions of Africa. The main reason is that
15.6
it is significantly buoyed by private sector
6.5
investment in years when it holds 50 15.8
successful Renewable Energy Inde- 11.4
23.7
pendent Power Producer Procurement
13.1
(REIPPP) programme auctions. Over the 40 18.8 6.0
last five years, South Africa has recorded 8.3
investments as low as $4.9bn in 2014
7.9
which was followed by $11.7bn in 2015. 30 4.8
The country has also attracted significant 11.7 4.7
22.0
amounts of Chinese funding ($2.2bn in
2015 for example) which in most 20 16.4
21.7 13.6
countries tends to cause a spike in
commitments, for instance its above-
mentioned multi-billion dollar funding of 10 23.3
Kenyan and Ethiopian railways, 12.9
15.9
12.4
Ethiopia’s Gerbi dam and Nigeria’s 7.5
Mambilla power plant.n 0
2013 2014 2015 2016 2017
30
Figure 15
TTotal: Total infrastructure financing by region, 2013-2017
$bn 25.3 $
1.4
1.1
20 2.5 18.8 19.8 19.7
18.6 1
0.9
1.1 2.2 1.4 0.5
6.9 1.5 1.7 1.0 3.8
2.0 1.8 1.4
2.0 4.4 4.1
10 2.4 4.7
3.7
1.3 2.2 1.9
8.5 3.4 4.0 4.9
4.6
5.1 4.1
Figure 16
2.4 3.7 3.7
0 ICA member commitments by region, 2013-2017
2013 2014 2015 2016 20172
20
17.1 16.6
$bn 14.4
1 13.0
10
8.3
6.3
1.5
0
Figure 17
North West Central East Southern RSA Pan-
P Average annual total infrastructure financing by
Africa Africa Africa Africa Africa African
excl. RSA region, 2013-2017
INFRASTRUCTURE FINANCING TRENDS IN AFRICA – 2017 | 193. Strategic Trends
3.1 Overview
This chapter looks at the Effective institutional arrangements analysis in this chapter deals with the
infrastructure financing gap, are needed to expand the number and financing needs and actual amounts
which is defined as the difference variety of sources of investment for committed to two RECs.
between the amount needed to the infrastructure sector. In this
It is important to note that
develop Africa’s infrastructure and regard, countries that have created infrastructure development that
the amount actually invested in conducive political, regulatory and spreads evenly across the continent is
infrastructure development legislative environments have more important than ever if the
attracted investors. However, fluc- anticipated African Continental Free
Recent estimates have suggested the tuations in levels of financing per Trade Area (AfCFTA) is to be
gap ranges from $68bn to $108bn1 (see sector in the past few years suggest successfully established.
page 21). As a result, closing this gap that Africa’s infrastructure develop-
has, for many years, been given a high Africa’s RECs and RPPs are
ment is uneven.
priority in many African countries. demonstrating a continental impact.
The RECs and Regional Power Pools For example, as discussed in this
The objective of this chapter is to shed (RPPs) are playing key roles in chapter, regional projects such as
light on the magnitude of Africa’s facilitating the development of the Zambia-Tanzania-Kenya Intercon-
infrastructure financing gap, which infrastructure. This is the case with nector have a high potential to
can in part be attributed to a shortage their support for PIDA/PAP. As contribute to the development of the
of bankable projects rather than a lack expected, these regional bodies also continent’s infrastructure.n
of funds for investment. focus on their own regions. The 1
AfDB’s African Economic Outlook, 2018
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