Infrastructure Finance for PPP Projects in Africa

The Public-Private Partnership in Infrastructure (PPPI) program of WBI delivered a pilot core-course “Infrastructure Finance for PPP Projects,” in Johannesburg, South Africa on June 9-13, 2008. Our initiatives were to provide affordable and quality capacity building opportunities. Second, was to encourage cross regional knowledge sharing between Africa and Asia.  Knowledge and financing partnerships with the Korean Development Bank (KDB), and Development Bank of Southern Africa (DBSA) allowed room for discounting course fees, while the quality of training is enhanced by incorporating the international best practice into the local context. The reaction from the participants were very positive. First, the course was oversubscribed leaving

50 Participants from all over Southern Africa’s private and public sector came together with a similar objective, to gain the skills required to implement PPP deals that assured value for money. By broadly looking at the Sub-Saharan Africa region, investment in PPI projects has grown at a phenomenal rate. By 2006, PPI investments reached over US$11 billion, compared over the past decade, when investments fluctuated between US$3-5 billion (World Bank, PPI database). Through our extensive Global PPPI Network of PPP units, and cumulative observations from past years’ activities in the region, a gap in capacity for project finance was clear. A participant from Mozambique commented that “this is a very relevant topic in Africa, as the infrastructure investment needs are massive.”

The intensive 5-day program also attracted participants from Botswana, Mozambique, Rwanda, Uganda, and Zambia. Professions included: senior and mid level public sector officials from: PPP units; line ministries; local governments; service providers; and development banks. From the private sector: lawyers; corporate bankers; consultants; academics; engineers; to name a few. The vast professional skills brought enriched discussions as perspective from all angles of project finance were raised.

A balance between lectures, case studies, as well as group discussions allowed participants to maximize their learning experience. Topics included; introduction to project finance; Risk allocation, identification and mitigation; request for proposals; concession agreements; financial modeling; negotiation; and management contracts. Case studies from Korea’s experience; South Africa’s experience, as well as sector specific case studies globally and regional were included. In regards to the case study on the Daegu-Busan Expressway in Korea one participant commented, “I am very impressed by the Korea’s PPP experience; the strong government support is what we need here.”

Towards the last day, participants had an open and lively debate on “PPP Readiness” of their own countries. Taziona Chaponda, Head of PPP unit in South Africa summed up the discussion, “where countries should proceed with caution, or are in emerging opportunities, or are hot spots; it is not only about creating, but also nurturing and sustaining an effective relationship between the government and private sector.”  By the end of the five-day program, it was evident that participants not only learned the technical skills required, but also an understanding of the framework of PPPs for their specific countries.

Survey results were unanimous. 100% of the participants said they would recommend this course to someone, and would definitely attend a follow up course themselves.  The organizing partners WBI, KDB and DBSA, as well as speakers agreed that this course needs to be offered regularly as evidently the capacity gap is prevalent.

For details please visit www.wbipppi.org/infrafinance2008

Article submitted by Junglim Hahm WBIFP, and Patchareporn Talvanna WBIFP, please kindly contact for more information.