How to Better Support Fragile African States Facing Huge Financing Needs

The African Development Bank has been a major investor in infrastructure development in the electricity, transport, and water sectors across Africa. Cumulative Bank funding for infrastructure on the continent rose by 22% from $66.9 billion in 2016 to $81.6 billion in 2017. During the same period, the value of infrastructure projects with private sector participation has increased from $3.6 billion to $5.2 billion. To meet Africa’s unmet infrastructure needs, project preparation is critical. The Bank has established several project preparation facilities to address the lack of bankable projects and ensure a robust pipeline of projects. These facilities collectively provide $30-50 million annually in support of project preparation.  Instruments, such as the Private Sector Credit Enhancement Facility, a credit-risk participation vehicle from the African Development Fund, (ADF)’s concessional window to support Non-Sovereign Operations in low-income countries, are showing tremendous results. With $500 million in credit guarantees, provided through ADF, the Bank has leveraged $2.5 billion of financing into fragile states, with a zero default rate.Source: VENTURES AFRICA