Annual Report Financial Commitments and Disbursements for Infrastructure in Africa

Transcription

1 Annual Report 2009 Financial Commitments and Disbursements for Infrastructure in Africa ICA AR 2009_final indd :26:07 Uhr

2 Disclaimer The ICA Secretariat wrote this report in collaboration with a consultant. 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 members, employees, associates and/ or consultants for reliance placed upon information contained in this document by any third party The Infrastructure Consortium for Africa Secretariat c/o African Development Bank BP Tunis Belvedere TUNISIA ICA AR 2009_final indd :26:07 Uhr

3 Annual Report 2009 Financial Commitments and Disbursements for Infrastructure in Africa for 2009 August 2010 ICA AR 2009_final indd :26:08 Uhr

4 4 ICA Annual Report 2009 About the ICA The Infrastructure Consortium for Africa (ICA) was launched at the G8 Gleneagles summit in Leading Africa organisations and aid donors attended the inaugural meeting in London on 6 October The Consortium s mission is to help improve the lives and economic well-being of millions of people across the African continent through support to scaling up investment for infrastructure development from both public and private sources. Many African countries lack the essential building blocks of economic progress roads and railways (which are well maintained), access to electricity, the internet and mobile phones and water for drinking and production, and sanitation. The ICA also works to help remove some of the technical and political challenges to building more infrastructures and to better coordinate the activities of its members and other significant sources of infrastructure finance, such as China, India and Arab partners. The ICA is supported by a secretariat hosted by the African Development Bank. ICA bilateral members include the G8 countries Canada, France, Germany, Italy, Japan, Russian United States, United Kingdom and multilateral institutions such as the African Development Bank Group, European Commission, European Investment Bank, Development Bank of Southern Africa and the World Bank Group. ICA AR 2009_final indd :26:08 Uhr

5 ICA Annual Report Foreword I am pleased to introduce the 2009 ICA Annual Report, which provides unique aggregated information about external financial flows going to infrastructure development in Africa. The report compiles and analyses selected data provided by ICA members and partners. In addition to traditional financial commitments, the report highlights this year - for the first time - an analysis of disbursement flows. The Annual Report clearly suggests that ICA members have put in place mechanisms to respond to the challenges arising from the global financial crisis. These new mechanisms have translated into additional commitments, which rose from $12.7 billion in 2008 to $19.5 billion in In 2009, the increase in donor finance helped to maintain previous levels of commitment to African infrastructure, in particular by replacing defaulting private financiers in some large infrastructure projects. As a result, overall external support to infrastructure in Africa, including donor finance and private sector investments, was maintained at a level of around USD 40 billion. Despite these encouraging trends, the Africa Infrastructure Country Diagnosis study tells us that we are far from bridging the financial gap that exists. $48 billion per annum of additional spending is needed. The main goal of the ICA has therefore not changed: to increase financing for infrastructure in Africa. The AfDB welcomes the decision made by the G20 in Toronto to increase substantially the general capital of multilateral banks, which will enable them to do more for the development of infrastructure in Africa and act counter-cyclically in the present difficult financial climate. That said, the importance of the private sector in mobilising finance cannot be emphasised enough and the AfDB will further intensify its efforts to team up with the private sector to generate and support projects. At the same time, there are also efficiencies to be gained by integrating African economies on a regional level. Also, $17 billion per annum alone could be captured by addressing inefficiencies in infrastructure (for example by improving the performance of utilities, introducing cost effective tariffs and targeting subsidies more effectively). African institutions have to be better positioned to be able to leverage public money to attract private finance. The ICA has now matured and has produced a strong Business Plan for the period. While the AfDB is a proud host of the ICA Secretariat, we are also glad to play a major role in helping the ICA to work towards achieving its goals, and to contribute directly towards bridging Africa s infrastructure financing gap. Bobby J. Pittman Jr. Vice President for Infrastructure, Private Sector and Regional Integration (OIVP) African Development Bank ICA AR 2009_final indd :26:09 Uhr

6 6 ICA Annual Report 2009 ICA AR 2009_final indd :26:09 Uhr

7 ICA Annual Report Key Messages and Findings Total commitments for infrastructure in Africa in 2009 were USD38.4bn slightly up by 5.0% from USD36.6bn in With USD19.5bn, ICA members contributed half of this amount. The private sector and other sources (i.e. Arab Funds, Chinaand India) contributed USD11.4bn and USD7.5bn respectively. 1. In 2009 private sector support decreased again, by almost 23.8% to about USD11.4bn. This trend was triggered by the financial crisis in ICA members commitments to infrastructure projects in Africa for 2009 have vastly increased, by 42.0%, acting in a countercyclical manner. DFIs substituted several private sector commitments to port, airport and road PPP projects to ensure they were not abandoned. 3. Nearly three quarters of ICA contributions were made to the transport and energy sector, with USD7.1bn and USD6.3bn respectively. Commitments to the water sector decreased while those to multisectors remained stable compared to the previous year. The ICT sector barely attracted public money, with 4% of total ICA commitments, which is understandable given the fact that investments in the ICT sector so far have been predominantly made by the private sector.* 4. Looking at the trend of ICA contributions by sector, the energy sector saw the strongest increase, by 75% to USD6.3bn in Transport sector commitments went up by 20% to USD7.1bn, but the water sector was affected again by a decrease, of 18% to USD2.2bn. The smallest share of finance was made to the ICT sector with 4%, doubling to USD0.7bn. 5. In 2009 overall commitments for regional projects from ICA members nearly doubled since 2008 to USD3.7bn, totalling 19% of total commitments. There is a strong potential pipeline of regional projects, which is likely to increase in the coming years. As a result, the challenge will be to increase the level of resources for regional projects. 6. The disbursements section, a new feature in this year s report, gives information to better understand the reasons for delays in disbursements and to categorise issues around risks. In 2009 the minimum spending flow to African infrastructure sectors was USD9.4bn. A disbursement rate of 54% of the commitments indicates room for improvement to eliminate risks and bottlenecks in project preparation and implementation. 7. The African continent has demonstrated resilience to the financial crisis, thus it is a much lower risk than often perceived. A number of countries were sourcing funding through capital markets before the financial crisis, due to their good credit rating. This opportunity might reappear and help African nations to coordinate their own share in infrastructure development. 8. At the time of writing this report, bilateral donors are challenged by their domestic concerns, originating partly from the global financial crisis. This has resulted in reductions in domestic public sector resources and a re-prioritisation of spending in many countries. The role of multilateral DFI is becoming more important due to their much needed countercyclical activities, as already reflected in the 2009 figures. 9. According to the AICD, improved infrastructure could add 2% to African GDP and raise business productivity by 40%. Infrastructure challenges remain not only financial; they are also political and regulatory. Additionally, they demand better implementation of regional programmes such as NEPAD and eventually the Programme for Infrastructure Development in Africa (PIDA). Nevertheless finance remains the key bottleneck. * Shares in the sector and regional analysis are totaling in USD18.5bn. Further information for USD1.05bn was not available.. ICA AR 2009_final indd :26:09 Uhr

8 8 ICA Annual Report 2009 Preface The fourth annual report provides a summary and trends of financial commitments and disbursements from members of the Infrastructure Consortium for Africa (ICA) for infrastructure in Africa for It also discusses commitments to regional projects and support from other important sources of finance, most notably China, India and the Arab Fund Coordination Group. The ICA Secretariat has compiled this report based on responses to questionnaires by ICA members, other partners and web searches. The 2009 questionnaire aimed to record both 2009 levels of commitments as well as disbursements to African infrastructure projects by ICA members (i.e. all funds and facilities). It contained four parts: One quantitative and one qualitative part for commitments and disbursements, respectively. Furthermore there was a follow up on non-concessional flows versus ODA, soft infrastructure versus hard infrastructure commitments as well as regional breakdowns, commitments and disbursements in regional projects. The report should be read alongside the Africa Infrastructure Country Diagnostic (AICD), which provides wider context and analysis on the state of infrastructure and investment needs in Africa. ICA AR 2009_final indd :26:09 Uhr

9 ICA Annual Report Table of Contents 4 About the ICA 5 Foreword 7 Key Messages and Findings 8 Preface 10 Acronyms 11 Definitions 12 List of Figures 13 Appendix 14 The Big Picture Minimum External Financial Support to African Infrastructure 15 ICA Members Financial Support to African Infrastructure 16 Commitments to African Infrastructure 16 Sector Overview 17 Sector Distribution of ICA Support 18 Transport Sector by Region 18 Energy Sector by Region 19 Water Sector by Region 19 ICT Sector by Region 20 Sectors by Type of Funding 21 Top 10 Commitments to Regional Infrastructure Projects in Top 10 Regional Infrastructure Project Pipeline 23 Disbursements to African Infrastructure 24 Qualitative Information 28 Quantitative Information on Disbursements 29 Private Sector and Other Finance for African Infrastructure 29 Private Sector 31 Arab Partners 32 China 32 India 33 Regional Development Banks 33 Regional Infrastructure Projects 34 ICA Secretariat Activities: 2009 / 2010 and Forward Look 35 Pillar One Enhanced Coordination 36 Pillar Two Facilitating Regional Infrastructure Programmes 37 Pillar Three Increased Knowledge and Information 38 Crosscutting Communications in Support of the SBP 39 Appendix 39 Maps of Regional Infrastructure Projects 46 Tables 53 Endnotes ICA AR 2009_final indd :26:09 Uhr

10 10 ICA Annual Report 2009 Acronyms ADF African Development Fund AfDB African Development Bank AFD Agence Française de Développement (France) AICD Africa Infrastructure Country Diagnostic bn 1 billion = ,00 BIDC Banque d Investissement et de Développement de la CEDEAO (EBID) BOAD Banque Ouest Africaine de Développement DBSA Development Bank of Southern Africa DFI Development Finance Institution EBID ECOWAS Bank for Investment and Development (BIDC) EC European Commission EIB European Investment Bank EU-AFRICA ITF EU-Africa Infrastructure Trust Fund EXIM Export Import Bank ICA Infrastructure Consortium for Africa ICT Information and Communication Technology IDA International Development Association (World Bank) IFC International Finance Corporation (World Bank) INFRA Infrastructure Recovery and Assets (INFRA) Platform IPPF Infrastructure Project Preparation Facility JICA Japan International Cooperation Agency KfW Kreditanstalt für Wiederaufbau (Germany) LOC Line of Credit m 1 million = ,00 MCC Millennium Challenge Corporation (USA) NEPAD New Partnership for Africa s Development ODA Official Development Assistance PIDA Programme for Infrastructure Development in Africa PPI Public Private Infrastructure PPIAF Public-Private Infrastructure Advisory Facility PPP Public Private Partnership SSA Sub-Saharan Africa USD United States Dollar WAPP West African Power Pool WADB WB West African Development Bank World Bank ICA AR 2009_final indd :26:10 Uhr

11 ICA Annual Report Definitions Hard Infrastructure Soft Infrastructure ODA Where donor funds have been allocated and used to produce physical infrastructure outputs. If measurable where donor funds have been allocated to support or accompany the production of physical infrastructure outputs, e.g. capacity building, enabling legislation, project preparation, etc. Grant or loan with public concessional modalities Non ODA / NC Non-concessional funding (from public or private sources) North Africa Morocco, Algeria, Tunisia, Libya, Egypt, Mauritania Western Africa Central Africa Eastern Africa Cape Verde, Malí, Níger, Senegal, Gambia, Guinea, Guinea Bissau, Burkina Faso, Sierra Leone, Liberia, Ghana, Ivory Coast, Togo, Benin, Nigeria Chad, Central African Republic, Cameroon, Sao Tome and Principe, Equatorial Guinea, Gabon, Congo, Democratic Republic of Congo, Rwanda, Burundi Sudan, Eritrea, Djibouti, Ethiopia, Somalia, Uganda, Kenya, Tanzania, Seychelles Southern Africa excluding South Africa South Africa Angola, Zambia, Malawi, Mozambique, Zimbabwe, Namibia, Botswana, Lesotho, Swaziland, Mauritius, Madagascar, Comoros South Africa Transport Road, Rail, Ports, Airports Energy Generation, Transport, Distribution Water Water supply, Sanitation, Irrigation, Trans-boundary water resource infrastructure ICT Information and Communication Technology: Broadband, Mobile Network, Satellite, etc. Multi Sector Not sector specific, crosscutting e.g. implementation of a PPP unit, capacity building programmes Exchange Rates EUR1.0 = USD1.392; CAD1.0 = USD0.879; JPY1.0 = USD ; GBP1.0 = USD1.564; UA1.0 = USD1.541 ICA AR 2009_final indd :26:10 Uhr

12 12 ICA Annual Report 2009 List of Figures Figure 1: Figure 2: The Big Picture Minimum External Financial Support to African Infrastructure The Big Picture Trends Figure 3: ICA Total Commitments Figure 4: Trends of ICA Total Commitments Figure 5: Figure 6: ICA Commitments to Infrastructure in Africa by Sector Trends of ICA Commitments to Infrastructure in Africa by Sector Figure 7: ICA Funding by Sector and Region in 2009 Figure 8: ICA Commitments for Hard and Soft Infrastructure by Region Figure 9: Sources of ICA Funding to the Transport Sector by Region 2006 to 2009 Figure 10: Sources of ICA Funding to the Energy Sector by Region 2006 to 2009 Figure 11: Sources of ICA Funding to the Water Sector by Region 2006 to 2009 Figure 12: Sources of ICA Funding to the ICT Sector by Region 2006 to 2009 Figure 13: Figure 14: Figure 15: ICA Bilateral Commitments by Sector ICA Multilateral Commitments by Sector ICA Commitments for Hard and Soft Infrastructure by Region Figure 16: Comparison of Sector Shares in Commitments and Disbursements in 2009 Figure 17: Disbursements to African Infrastructure by Region and Sector in 2009 Figure 18: Figure 19: Investment Commitments to Infrastructure Projects with Private Participation in Sub-Saharan Africa, by Implementation Status, Investment Commitments to Infrastructure Projects with Private Participation in Sub-Saharan Africa, by Sector, Figure 20: Commitments to Africa s Infrastructure by Members of the Arab Coordination Group in 2009 Figure 21: ICA Members Commitments Towards Regional Infrastructure Projects ICA AR 2009_final indd :26:10 Uhr

13 ICA Annual Report Appendix Maps of Regional Infrastructure Projects Annex 1 - Continental Map of Transport Projects Annex 2 - Continental Map of Transport Projects (Pipeline) Annex 3 - Continental Map of Arab Funds Projects Annex 4 - Continental Map of Power Projects Annex 5 - Continental Map of Water Projects Annex 6 - Continental Map of ICT Projects Tables Annex 7 - Detailed Trends in Commitments by ICA for Infrastructure Development in Africa 2009 (USDm) Annex 8 - Trends in Commitments by ICA for Infrastructure Development in Africa (USDm) Annex 9 - Arab Fund Coordination Group Commitments 2009 Annex 10 - Regional Development Banks: BIDC Project List 2009 Annex 11 - Regional Development Banks: Approved Financing BOAD 2009 ICA AR 2009_final indd :26:10 Uhr

14 14 ICA Annual Report 2009 The Big Picture Minimum External Financial Support to African Infrastructure 45,0! 40,0! 35,0! 30,0! 25,0! 20,0! 15,0! 10,0! 5,0! 0,0! ICA! Private Sector! China! Arab Funds! India! African RDB! 0,7! 0,5! 2,2! 2,4! 4,5! 5,0! 17,5! 15,0! 12,4! 13,7! 0,3! 0,5! 1,7! 5,0! 11,4! 19,5! 2007! 2008! 2009! 45,0! 40,0! 35,0! 30,0! 25,0! 20,0! 15,0! 10,0! 5,0! 0,0! ICA! Private Sector! Non OECD! Total! 37,3! 36,6! 38,4! 15,0! 19,5! 17,5! 12,4! 13,7! 11,4! 7,4! 7,9! 7,5! 2007! 2008! 2009! Figure 1: The Big Picture Figure 2: The Big Picture - Trend Unit: USD billion Source: ICA 2010 Note: RDB = Regional Development Banks Unit: USD billion Source: ICA 2010 Note: Non OECD = China, Arab Funds, India, EBID and WADB Figure 1 shows the minimum external financial support to African infrastructure from 2007 to Total commitments for infrastructure in Africa in 2009 were USD38.4bn slightly up, by 5.0%, from USD36.6bn in The total commitments made by ICA members for infrastructure in Africa in 2008 were USD19.5bn, half of the total volume and a significant increase, by 42.5% (USD5.8bn), from Private sector support has decreased again, by around 23.7% to about USD11.4bn, indicating a difficult investment climate and the impact of the financial crisis. Commitments from Arab Funds, China, India and African Regional Development Banks are estimations by the ICA Secretariat. The latter, represented by EBID and WADB, contributed USD0.34bn in Additional information is provided in the chapter Private Sector and other funding to African infrastructure. Figure 2 provides a summary of the trends from 2007 to 2009, visualising the most significant increase during this period in 2009, where ICA members vastly increased their support to African infrastructure, acting contra cyclically. Private sector commitments dropped consistently since the financial crisis, to a level of USD11.4bn in Traditionally the private sector is strongly engaged in ICT projects with a share of more than 90% of their total commitments. While contributions by the private sector decreased, their focus remained on the information and communication technology (ICT) sector. ICA AR 2009_final indd :26:14 Uhr

15 ICA Annual Report ICA Members Financial Support to African Infrastructure 25,0! North Africa ODA! North Africa Non-ODA! SSA ODA! SSA Non-ODA! 25,0! North Africa ODA! North Africa Non-ODA! SSA ODA! SSA Non-ODA! Total! 20,0! 15,0! 10,0! 5,0! 0,0! 7,2! 1,9! 1,8! 0,7! 0,7! 8,4! 8,1! 9,5! 4,4! 5,1! 2,7! 1,3! 1,4! 1,2! 2,2! 0,7! 0,5! 1,0! 0,9! 0,5! 2005! 2006! 2007! 2008! 2009! 20,0! 15,0! 10,0! 5,0! 0,0! 19,5! 13,7! 12,4! 9,5! 7,0! 7,7! 8,4! 8,1! 7,2! 5,1! 4,4! 2,7! 1,4! 1,8! 1,3! 0,7! 1,2! 1,9! 2,2! 0,7! 0,5! 1,0! 0,9! 0,5! 2005! 2006! 2007! 2008! 2009! Figure 3: ICA Members Financial Support to African Infrastructure Unit: USD billion Source: ICA 2010 Note: Region shares in this figure are projections for the total amount of USD19.5bn. Only 18.45bn were reported split by sector and region.. Figure 4: ICA Members Financial Support to African Infrastructure Trend Unit: USD billion Source: ICA 2010 Note: Region shares in this figure are projections for the total amount of USD19.5bn. Only 18.45bn were reported split by sector and region.. In 2009, ICA members committed USD19.4bn to African infrastructure, compared to USD13.6bn in While Official Development Assistance (ODA) for Africa increased by only 10%, to USD10bn, non-concessional lending doubled to USD9.4bn. Both bilateral and multilateral ICA members doubled their commitments compared to More than 90% of the total step-up was agreed in the form of non-concessional lending. - The only region affected by a decrease in 2009 was North Africa. Total commitments were USD2.7bn, less than a quarter compared to the previous year but still above the 2007 level. - The Republic of South Africa enjoyed an extensive increase, from USD1.3bn to USD4.6bn. Nonconcessional lending was four times higher than 2008 with nearly to USD3.8bn. The biggest donor was the African Development Bank with USD2.8bn followed by the Development Bank of South Africa with USD0.8bn and France with USD0.6bn. This trend is driven by big energy sector loans to help address the country s energy crisis. - The total commitment to infrastructure in Sub- Saharan Africa, excluding South Africa, accounts for USD12.3bn, an increase of 41% in comparison to the previous year (USD8.6bn). Multilaterals were of crucial importance for this trend as they significantly increased both ODA and non-concessional lending for this region. - The overall financing trend is likely to be sustained in 2010 as indicated by ICA members at their annual meeting in Tunis in May Figure 4 provides a summary of the trends from 2005 to 2009, visualising the most significant increase during this period in 2009, where Sub-Saharan Africa received USD7.2bn. Non-concessional commitments were almost three times higher in 2009 than in Further information on infrastructure commitments to Africa from 2005 to 2009, with a regional breakdown and a detailed analysis of the trends in 2009, is presented in Annex 7 and Annex 8. ICA AR 2009_final indd :26:16 Uhr

16 16 ICA Annual Report 2009 Commitments to African Infrastructure Sector Overview Total 19,5 8,0! Transport! Energy! Water! ICT! Multi-Sector and Others! ICT! 0,7! 4%! Multi! 2,2! 12%! 7,0! 6,0! 5,9! 7,1! 6,3! Water! 2,2! 11%! Energy! 6,7! 35%! Transport! 7,5! 38%! 5,0! 4,0! 3,0! 2,0! 1,0! 0,0! 3,9! 3,6! 3,6! 3,2! 2,9! 2,4! 2,6! 2,2! 1,8! 1,3! 0,9! 0,9! 0,5! 0,5! 0,7! 0,3! 2006! 2007! 2008! 2009! Figure 5: ICA Commitments to Infrastructure in Africa by Sector Figure 6: Trends of ICA Commitments to Infrastructure in Africa by Sector Unit: USD billion Source: ICA 2010 Note: Sector shares in this figure are projections for the total amount of USD19.5bn. Only 18.45bn were reported split by sector and region. Unit: USD billion Source: ICA 2010 Note: Sector shares in this figure are totaling in USD18.5bn. Further information for USD1.05bn was not available. A summary of ICA commitments to infrastructure in Africa by sector is presented in Figure 5. The transport sector received the largest amount, USD7.5bn, accounting for around 38% of total commitments. The power sector ranked next with 35%. Water and multisector are nearly on the same level, with 11% and 12% respectively. For the water sector, this again means a decrease, as shown in Figure 6. Commitments to multi-sector are contributions to more than one infrastructure sector. The ICT sector barely attracts public money, with only 4% of total ICA commitments, which is understandable given the fact that investments in the ICT sector so far have been predominantly made by the private sector. Figure 6 shows the trend in ICA commitments to infrastructure in Africa by sector. The biggest stepup was in the energy sector where commitments increased by 75% compared to 2008, to a level of USD6.3bn. Transport increased too, by 20% to USD7.1bn. While ICT almost doubled to a level of USD0.7bn commitments in the water decreased by 18% to USD2.1bn. ICA AR 2009_final indd :26:20 Uhr

17 ICA Annual Report Sector Distribution of ICA Support Transport! Energy! Water! ICT! Multi Sector! 8,0! 8,0! 7,1! 7,0! 6,8! 7,0! 6,3! 6,0! 6,0! 5,0! 5,0! 4,0! 4,4! 4,0! 3,7! 3,0! 2,7! 2,9! 3,0! 2,1! 2,2! 2,2! 2,0! 1,7! 2,0! 1,0! 0,0! 1,6! 1,5! 1,4! 1,2! 1,2! 1,0! 0,7! 0,6! 0,5! 0,5! 0,5! 0,4! 0,3! 0,4! 0,4! 0,3! 0,2! 0,2! 0,1! 0,1! 0,1! 0,1! 0,2! 0,0! North! West! Central! East! Southern with SA! Total! 1,0! 0,0! 0,1! 0,3! 0,1! 0,3! 0,2! North! West! Central! East! Southern with SA! Figure 7: ICA Funding by Sector and Region in 2009 Figure 8: ICA Commitments for Hard and Soft Infrast Unit: USD billion Source: ICA 2010 Note: Sector shares in this figure are totaling in USD18.5bn. Further information for USD1.05bn was not available. Unit: USD billion Source: ICA 2010 This section provides a more detailed analysis of ICA commitments to the transport, water, power and ICT sectors, region by region. Figure 8 shows that ICA members commitments to African infrastructure went mostly into hard infrastructure projects. On average, only 5% went to soft infrastructure projects. ICA AR 2009_final indd :26:37 Uhr

18 18 ICA Annual Report 2009 Transport Sector by Region Energy Sector by Region 2006! 2007! 2008! 2009! 2006! 2007! 2008! 2009! 8,0! 7,0! 7,1! 6,3! 7,0! 6,0! 6,0! 5,9! 5,0! 5,0! 4,0! 3,6! 4,0! 3,7! 3,6! 3,6! 3,2! 3,0! 3,0! 2,4! 2,0! 2,1! 2,1! 2,0! 1,8! 1,6! 1,0! 1,4! 1,2! 0,9! 0,6! 0,6! 0,4! 1,2! 1,0! 0,7! 0,5! 0,3! 1,2! 1,3! 1,2! 1,5! 0,9! 0,5! 0,3! 1,0! 1,2! 0,9! 0,4! 0,4! 0,5! 0,2! 0,3! 0,2! 0,2! 0,1! 1,2! 0,6! 0,5! 0,3! 1,0! 0,5! 0,5! -! -! North! West! Central! East! Southern with SA! Total! North! West! Central! East! Southern with SA! Total! Figure 9: Sources of ICA Funding to the Transport Sector by Region 2006 to 2009 Unit: USD billion Source: ICA 2010 Figure 10: Sources of ICA Funding to the Transport Sector by Region 2006 to 2009 Unit: USD billion Source: ICA 2010 Transport accounts for the largest part of commitments given. Total commitments to the transport sector in Africa increased by 20% from USD5.9bn in 2008 to USD7.1bn in This gain came from the North, East, Central and Southern African regions (including South Africa) as shown in Figure 8. In contrast to this positive trend, commitments to West Africa were down by 42% compared to 2008, though they were still above the level of previous years. For transport about 80% of the commitments came from multilaterals, totalling USD5.8bn. The remaining 20%, the bilateral commitments, were ODA and nonconcessional loans in nearly equal parts. AfDB, WB, EIB and EC were the top multilateral financiers, with their commitments of USD2bn, USD1.6bn, USD1.1bn and USD0.9bn respectively. The strongest bilateral financiers in this sector are France with USD0.8bn and Japan with USD0.5bn. With an increase of 75% compared to 2008, the energy sector has experienced the largest rise in commitments, receiving USD6.3bn. This is mainly due to the vast increase in South Africa, which received seven times more than in Half of the total contribution to the energy sector (USD3.7bn) was directed to South Africa in There was a tripling in commitments to West Africa from 2008 to 2009, reaching USD1.6bn. After a strong step-up in 2008, North Africa s share weakened from USD1.8bn to USD362m. The shares in both Central and East Africa remained nearly at the previous year s levels. AfDB and World Bank are traditionally the most significant financiers to the energy sector, with 2009 commitments of USD3.6bn (of which USD2.8bn was committed to South Africa) and USD1.8bn respectively. ICA AR 2009_final indd :26:49 Uhr

19 ICA Annual Report Water Sector by Region ICT Sector by Region 2006! 2007! 2008! 2009! 2006! 2007! 2008! 2009! 3,0! 2,8! 800! 2,6! 700! 695! 2,5! 2,2! 600! 2,0! 1,8! 500! 1,5! 400! 315! 1,0! 300! 260! 274! 0,5! -! 0,7! 0,6! 0,6! 0,6! 0,6! 0,5! 0,5! 0,4! 0,7! 0,6! 0,5! 0,4! 0,3! 0,4! 0,3! 0,1! 0,6! 0,4! 0,4! 0,2! 200! 100! -! 120! 125! 99! 105! 93! 48! 53! 35! 20! ! 153! 36! 24! 91! North! West! Central! East! Southern with SA! Total! North! West! Central! East! Southern with SA! Total! Figure 11: Sources of ICA Funding to the Water Sector by Region 2006 to 2009 Unit: USD billion Source: ICA 2010 Figure 12: Sources of ICA Funding to the ICT Sector by Region 2006 to 2009 Unit: USD millions Source: ICA 2010 The water sector in the continent again saw a decline in ICA members commitments, from USD2.6bn in 2008 to USD2.1bn in Only West and Southern Africa s (including South Africa) shares have risen. France was the most significant donor to the water sector with commitments of USD683m in North and East Africa saw a significant decrease in commitments. Almost 85% of the financing for this sector came from ODA. The ICT sector continued to receive the least amount of finance from ICA members, with total commitments of USD697m, accounting for only 4% of total commitments to infrastructure in West and Southern Africa (including South Africa) received the majority of the commitments, with USD260m and USD205m respectively, as shown in Figure 12. IFC, WB and AfDB are almost the sole financiers with commitments representing 85% of the total volume. Historically contributions to the ICT sector have been around 2%. PPIAF data shows a clear focus of the private sector for ICT projects with more than 90% of total commitments. ICA AR 2009_final indd :26:59 Uhr

20 20 ICA Annual Report 2009 Sectors by Type of Funding 1,6! Non-ODA! ODA! Total! 7,0! Non-ODA! ODA! Total! 1,4! 1,3! 6,0! 5,8! 6,0! 1,2! 1,0! 0,8! 0,6! 0,4! 0,2! 0,0! 1,2! 1,0! 0,9! 0,7! 0,6! 0,4! 0,5! 0,4! 0,3! 0,2! 0,1! 0,0! 0,0! 0,1! Transport! Energy! Water! ICT! Multi Sector! 5,0! 4,0! 3,0! 2,0! 1,0! 0,0! 3,9! 4,2! 1,9! 1,8! 1,3! 1,0! 0,8! 0,9! 0,6! 0,2! 0,4! 0,3! 0,4! Transport! Energy! Water! ICT! Multi Sector! Figure 13: ICA Bilateral Commitments by Sector USD billion Source: ICA 2010 Figure 14: ICA Multilateral Commitments by Sector USD billion Source: ICA 2010 Bilateral and multilateral donors had different centres of interest in Bilateral members made the biggest commitments to transport projects followed by water and multi sector or other projects. Energy and ICT received less interest from this group. Multilaterals made up 80% of total ICA member commitments in Their focus was on the transport and energy sectors with almost 80% of multilateral commitments, totalling USD11.7bn (63% of the total 2009 amount). ICA AR 2009_final indd :27:07 Uhr

21 ICA Annual Report Top 10 Commitments to Regional Infrastructure Projects in 2009 # Project Beneficiary Region(s) Commitment Project Financial Estimate Funding scheme ICA Member Co-Financiers 1 Mombasa-Nairobi-Addis Abeba Road Corridor Project - Phase II East ADF Loan and Grant AfDB Governments 2 Autoroute Sfax-Gabes (TN) North Investment Loan EIB N/A 3 Auto routes de Maroc VI North Investment Loan EIB Arab Fund for Economic/ Social Development 4 Extension of container terminal in Cape Town South 297 N/A N/A France 5 Kenya Northern Corridor Additional Financing East 253 N/A IDA WB Counterpart financing and Foreign Private Commercial Sources 6 CEMAC Transport Transit Facilitation - Additional financing Central African Republic and Cameroon Central 217 N/A IDA WB Counterpart financing 7 Route Ketta-Djoum (Ouesso-Sangmélima/ Doussala-Dolisie) Central ADF Loan and Grant AfDB Governments 8 Nacala Road Corridor South ADF Loan AfDB Agence Française de Développement, Governments 9 Botswana Integrated Transport Project South IBRD WB Counterpart financing 10 Southern Africa Power Market - Additional Financing South IDA World Bank AfDB, EIB Table 1: Top 10 Commitments to Regional Infrastructure Projects in 2009 Unit: USD billion Source: ICA 2010 Note: N/A = information not available ICA AR 2009_final indd :27:07 Uhr

22 22 ICA Annual Report 2009 Top 10 Regional Infrastructure Project Pipeline # Project Beneficiary African Region(s) Project Financial Estimate Donor Lead Donor 1 Mmamabula Energy Project Botswana (SADC) 6000 DBSA DBSA/AfDB 2 Kenya - Geothermal Power East 1810 France AFD 3 Ethopia-Kenya Power Interconnection East 1176 EIB KfW 4 Senegal- International Airport Diagne West 905 France AFD 5 Zambia-Tanzania-Kenya Power Interconnector Regional - SADC 860 DBSA DBSA 6 OMVG - Sambangalou et Kaleta West 696 EIB Partner DFI: KfW, EIB, AfDB, AFD 7 Ruzizi III Central 487 EIB EIB 8 Abidjan-Lagos Transport & Transit Facilitation Project Phases I and II Western 445 World Bank 9 Itezhi Tezhi Hydro Project South 418 EIB EIB 10 East Africa Power Pool (EAPP) APL2 Ethiopia-Kenya Regional Interconnection East 377 World Bank Table 2: Top 10 Regional Infrastructure Project Pipeline Unit: USD billion Source: ICA 2010 ICA AR 2009_final indd :27:07 Uhr

23 ICA Annual Report Disbursements to African Infrastructure This chapter is an addition to previous editions of the ICA Annual Report. It aims to complement the commitment picture with an assessment of what is happening on the ground, i.e. how much is actually spent on infrastructure in Africa. The questionnaires first distributed to ICA members to help prepare this report included two sections on disbursements qualitative and quantitative. This disbursements section was designed to obtain qualitative information, to better understand the reasons for any delays in disbursement and to categorise issues around risks. Furthermore, the collection of qualitative information on disbursements provides the opportunity to make estimates, identify bottlenecks and define measures that may help deal with risk issues. ICA AR 2009_final indd :27:13 Uhr

24 24 ICA Annual Report 2009 Qualitative Information 1. In the first question, ICA members were asked to identify risks that led to disbursement delays. Answers given are listed next to project phases for a better overview. Identified risks that led to disbursements delays. Project preparation risks Obtaining signed Memoranda of Understanding can be time consuming Delays in preparing necessary documents on the part of Ministries/agencies concerned of the recipient country, related to Loan Agreement (L/A), banking arrangements and invoices for disbursement. Change in the project scope, with client not obtaining approval from the main lender in time. Project implementation risks: Lack of competition and few capable contractors Weak country procurement capacity Poor capacity of implementation agencies Slow implementation of Conditions Precedent of the finance contract Inexperienced (small) private borrowers with little or no familiarity with the implementation of contractual arrangements Subcontractors/suppliers not able to meet the required implementation plan. Cost overruns not budgeted for, and the resulting time spent trying to source additional funding. Project monitoring risks: Lack of baseline data and consistent indicators may delay project approval Lack of institutional support at sponsor level to monitor implementation plan as agreed upon with lender. Project effectiveness declaration delays In fact, the more complex the projects become (in particular in blending with grants, for instance), the more Conditions Precedent the borrowers have to satisfy, and the slower the disbursement rate becomes. ICA AR 2009_final indd :27:13 Uhr

25 ICA Annual Report The second question was aimed at identifying external factors (outside financial agreement) that led to a delay in disbursement. External factors that led to disbursements delays. Governance and Capacities: Lengthy government approval processes, i.e. environmental approval Delays in obtaining right to occupy and/or license to construct. Weak governance in the transport sector, such as axle load control, has delayed disbursement in West Africa Political events (eg. Guinea and Madagascar) Poor capacities of implementation agencies Weak institutional capacity, namely of the public sector borrowers Procurement: Weak country procurement capacity Delays in procuring consultants and contractors Project Management: Delays in requests from recipient organisations/projects Delays in shipments of necessary equipment for constructions Delays related to the slow implementation of the projects, which is more significant in the context of large infrastructure projects Slippage in project programmes Breach of third part contracts outside the control of main lender ICA AR 2009_final indd :27:13 Uhr

26 26 ICA Annual Report The third query was directed towards measures that address issues/risks identified in question 1. Measures that address issues/risks. Facility agreement: Monitoring The majority of factors that can lead to a delay in project disbursement are addressed through the facility agreement, mainly in the form of covenants, representations and warranties, conditional precedents and definitions of events of default. Regular monitoring and updating of financial projections Monitoring team that follows closely the disbursement period. Increased presence on the ground - more projects under implementation managed from the field (close to 70%). The decentralisation of Task Managers to the field also allows for closer proximity to the client permitting a fluid and constant dialogue with country counterparts and quick resolution of issues. Increased support during project implementation -- through closer oversight of safeguards management, tracking contracts for large civil works, and more realistic procurement scheduling and disbursement forecasts Technical Assistance and Contingency Funds: Technical Assistance can be used to address some of the shortcomings of the promoters with weak project implementing capacities. Strengthening implementing agency capacity -- through increased training, technical assistance, and twinning support for preparation of complex procurement packages, contract management, monitoring and evaluation, safeguards management, and risk identification and management. Setting aside contingency funds. EC organized with WAEMU a regional workshop to address axle load control. Others Reducing complexity -- through reduction in number of activities and components, and more realistic implementation sequencing. ICA AR 2009_final indd :27:13 Uhr

27 ICA Annual Report Poor or low capacity at implementing agencies may delay project implementation. The ICA Secretariat asked how these units could be supported prior to the commitment to ensure timely completion, within budget and to an acceptable quality. Here are the suggestions. Support for implementing agencies. Capacity Building and Advisors/Consultants Funding for capacity building or for project management resource Suitable capacity building programmes should be developed and made available to the implementing agencies Capacity building for implementer or promoter, during preparation stage to ensure tendering, construction and subsequent operations are satisfactorily managed Comprehensive capacity development measures prior to and during the capital investment project contribute to improve the implementation quality Technical Assistance Flexible and responsive TA arrangements via call-down contracts useful for trouble-shooting, to back up the more predictable TA support arrangements. Assistance in project formulation Assistance in preparing the Resettlement Action Plans (RAPs) Assistance in conducting detailed designs Others Adequate monitoring arrangements (financial and physical) by financiers are also essential. Sector dialogue to foster the necessary reforms ICA AR 2009_final indd :27:13 Uhr

28 28 ICA Annual Report 2009 Quantitative Information on Disbursements In this 2009 report facts and data on disbursements are presented for the first time in order to provide a bigger picture of the actual flow of financial support to the continent and allow first conclusions on reasons for delay. The tracking of actual disbursements will be continued in future reports. While writing this report, the ICA Secretariat received feedbackaccounting for 90% of the disbursements of ICA members. A significant part of the returned information on disbursements was not split by sectors or region. The following figures are therefore approximations and are preliminary. Transport! Energy! Water! ICT! Total Commitments USD19.5bn Total Disbursements USD9.4bn 1600! 1400! 0! 104! 18! Water! 11%! ICT! 4%! Multi! 12%! Energy! 35%! Transport! 38%! Water! 18%! Energy! 36%! ICT! 3%! Transport! 43%! 1200! 1000! 800! 600! 400! 200! 0! 326! 562! 24! 118! 246! 170! 4! 467! 104! 277! 243! 8! 635! 740! 489! 569! 189! 398! 35! 176! 178! North! West! Central! East! South wo SA! SA! Figure 16: Comparison of Sector Shares in Commitments and Disbursements in 2009 Source: ICA 2010 Note: Multi = Multi-Sector Figure 17: Disbursements to African infrastructure by Region and Sector in Unit: USD billion Source: ICA 2010 Note: From the total amount of USD9.4b for reported disbursements, only USD6.1b or 65 % were split by region and/or sector. Data in this Figure is based on the total amount of USD6.2bn. ICA members reported disbursements of USD9.4bn 1 (Figure 16) for The sector ranking is similar to the commitments, led by the transport sector with 43%, followed by energy with 36% and water with 18%. The smallest amount of disbursements went to the ICT sector with 3%. Figure 17 summarises disbursements of USD6.2bn, or 65% of total disbursements by region and sector. The missing amount of USD3.2bn was not explained in any detailed manner. In 2009 the North (USD1.4bn) and Eastern Africa (USD1.38bn) regions received most of the financial flows regarding infrastructure, followed by South Africa with USD1.1bn and the West African Region with USD1.04bn. Central and Southern Africa without South Africa received USD0.75bn and USD0.41bn respectively. More than 88% of the disbursed financial support to Africa s infrastructure came from multilateral institutions in Bilateral donors disbursed 12% of the total amount. ICA AR 2009_final indd :27:22 Uhr

29 ICA Annual Report Private Sector and Other Finance for African Infrastructure Private Sector The PPIAF states that Public Private Infrastructure (PPI) investments have not recovered in The vast majority of developing countries remain severely affected, continuing the trend triggered by the financial crisis. But the impact of the financial crisis on project implementation is declining and the flight to quality continues. Projects with strong economic and financial fundamentals and the backing of financially solid sponsors are still able to find finance, even though with more stringent conditions (lower debt/equity ratios, shorter tenors, and more conservative structures). Developing country governments remain committed to their PPP programmes and are trying to support implementation of new projects by restructuring them and facilitating financing. In addition, local public banks, multilateral agencies and bilateral agencies continue to provide critical funding to private infrastructure projects, as confirmed by the number of new projects being tendered, awarded, and restructured. 3 Projects reaching financial or contractual closure still face more difficult financial market conditions. While infrastructure projects with private participation or PPP schemes continue to raise financing, they are competing with other projects and sectors for the reduced liquidity in the market. Some banks have partially or totally withdrawn from the project finance market. Deals take longer to close, and conditions are more stringent. The syndicated loan market remains stalled and deals are closing as club transactions, slowing the speed of closure. Financing usually involves lower debt/equity ratios, higher spreads and fees, shorter debt tenors, and embedded mechanisms to encourage refinancing. 4 Projects able to raise financing usually have the backing of large developers with extensive banking relationships and have been accorded priority status in their country (with the aim of easing current infrastructure bottlenecks or preventing future ones). ICA AR 2009_final indd :27:22 Uhr

30 30 ICA Annual Report 2009 Investment in new projects! Additional investment in existing projects! New projects! Energy! Telecom! Transport! Water! 15! 40! 15! 12! 9! 6! 35! 30! 25! 20! 15! 12! 9! 6! 3! 0! 1995! 2000! 2005! 2009! 10! 5! 0! 3! 0! 1995! 2000! 2005! 2009! Figure 18: Investment Commitments to Infrastructure Projects with Private Participation in Sub-Saharan Africa, by Implementation Status, Unit: USD billion Source: World Bank and PPIAF, PPI Project Database. Note: Includes additional investment in projects that reached financial closure in USD adjusted by US CPI data preliminary Figure 19: Investment Commitments to Infrastructure Projects with Private Participation in Sub-Saharan Africa, by Sector, Unit: USD billion Source: World Bank and PPIAF, PPI Project Database. Note: Includes additional investment in projects that reached financial closure in USD adjusted by US CPI data preliminary In the third quarter of 2009 Sub Saharan Africa had three projects closed with investment worth USD780m 25% less than in the same quarter of This brought total activity in the region in the first three quarters of 2009 to 13 projects with investment worth USD1.4bn, down 34% compared with investment in the same period of During the same period Middle East and North Africa (MENA) showed a decrease of 21% compared to A preliminary estimation by the PPIAF shows that total investment commitments to infrastructure projects with private participation amounted to USD11.4bn in 2009 (Figure 18). Traditionally more than 90% of PPI commitments go to the telecom sector. As private investors seek the commercially most lucrative opportunities their focus will stay within the ICT. In contrast to the focus of the donor commitments, the PPI investments directed towards transport were severely affected by the crisis. In 2009 they decreased to USD0.6bn from USD4.5bn in However, the financial crisis has greatly affected PPI projects. A series of observations derived from the international infrastructure PPI market confirmed that hedge funds were rapidly being scaled back; private equity funds were holding back capital; currency devaluation was making foreign debt more expensive and investors were demanding higher returns. 6 ICA AR 2009_final indd :27:22 Uhr

31 ICA Annual Report Arab Partners Financial Institution Amount Abu Dhabi Fund for Development 108,90 Arab Fund for Economic and Social Development Arab Bank for Economic Development in Africa (BADEA) Islamic Development Bank Kuwait Fund for Arab Economic Development OPEC Fund for International Development (OFID) Saudi Fund for Development Grand total 455,60 94,04 471,68 277,86 219,70 76,00 1, Figure 20: Commitments to Africa s Infrastructure by Members of the Arab Coordination Group in 2009 Unit: USD billion Source: ICA 2010 Figure 17 provides a summary of Arab and Islamic financing for infrastructure in Africa for 2009, amounting to USD1.7bn. Arab and Islamic partners continue to play a significant role in financing infrastructure in Africa. In 2008 the total commitment made by the Arab and Islamic development institutions stood at USD2.4bn. The coverage of recipient countries is wide, with 31 African countries benefitting from Arab and Islamic support in But in terms of the committed amount, there is a tendency to concentrate in North Africa with 60% (USD1.037bn) followed by East Africa with 13% (USD223m). Major recipient countries were: Morocco, Egypt, Mauritania and Tunisia. In 2009, Egypt was the largest recipient with total commitments of USD292m. Most of these funds went to two energy projects: the El-Ain El-Sokhna Power Station and the Abu-Qair Power Station. Also, Morocco received USD206m for two dams and power plants, followed by Mauritania (USD162m) and Tunisia (USD128m). Arab partners finance has also been concentrated on specific sectors and areas: USD581m to road construction, USD405m to the power sector and USD108m to dam construction. Arab and Islamic Funds have traditionally supported African infrastructure development, which is expected to continue with even larger infrastructure portfolios. They have a track record of co-financing projects coordinated through their biannual meetings. In 2009, five projects were cofinanced, amounting to USD128m. Water, transport and energy still remain sectors of interest to the Arab Funds. In fact, the Islamic Development Bank has created an Infrastructure Department in its new structure. The ICA will continue to strengthen its ties with the Arab Funds. Further information about commitments to Africa s Infrastructure by Members of the Arab Coordination Group in 2009 are shown in a seperate table (Annex 9) in the Appendix. ICA AR 2009_final indd :27:22 Uhr

32 32 ICA Annual Report 2009 China The People s Republic of China remains the major bilateral player in the African infrastructure sector with more than 20% market share in contracting infrastructure projects. 8 Chinese activities can be regarded as concessionary; resource backed and tied concessional lending for infrastructure. The principal financing method is direct funding by the government through the China EXIM Bank, China Development Bank (via the China-Africa Development Fund) or the Chinese Ministry of Commerce in the form of concessional loans, development aid, soft loans and export seller s credit. Over the last decade, China s engagement in African countries have shifted toward trade, foreign direct investment (FDI) and economic and technical cooperation. While Chinese state actors predominate in oil and gas, mining, and infrastructure, private firms, traders and farmers are increasingly having an impact in the manufacturing, retail and agriculture sectors. 9 About two-thirds of Chinese infrastructure financing is attracted by the energy and transport sector. Financing commitments are targeted to hydropower and some thermal stations in the energy sector. In transport China focuses on railroad and roads projects. 10 Chinese infrastructure engagements in Africa are spearheaded by highly competitive state enterprises with considerable experience in large-scale construction. The regional concentration in a few countries, i.e. Nigeria, Angola, Ethiopia and Sudan, is significant. To these countries 70% of total commitments are allocated (Foster et al 2009). Chinese commitments to Africa have been steadily expanding. By the end of 2009, the provision of USD3bn worth of preferential loans and USD2bn worth of preferential export buyer s credit were fully implemented. 11 In November 2009, China pledged to offer African countries USD10bn in low-interest loans over the next three years, to set up a USD1bn loan facility for small and medium-size firms and to forgive debt on some interest-free loans. The pledge is nearly 10% of the total trade between the two blocs, which amounts to approximately USD100bn per year. China is now the second-largest trading partner after the United States, importing a third of its crude oil from Africa. 12 The ICA estimate of Chinese total commitments to Africa s infrastructure in 2009 is USD5bn, halved compared to the previous year. It is assumed that this sharp decline is almost entirely due to a USD9bn loan for infrastructure development in the Democratic Republic of Congo which was accounted for in India India s commitments for infrastructure projects in the region were averaging USD500m a year from 2003 to In recent years India has committed funding to an estimated 20 African infrastructure projects worth a total of USD2.6bn. Like China s financing activities, India s are closely linked to interests in natural resource development. 13 The trade volume between India and Africa reached USD36bn in India EXIM Bank provided Lines of Credit (LOC) mostly to finance food processing plants and equipment purchases. An LOC is basically a tied loan used for payment for goods and services from India. Since the bank discloses only total amounts of credit lines that bundles different sectors together, an exact amount of LOCs that went to infrastructure is difficult to assess. EXIM Bank of India, which has already provided LOCs of about USD2bn to Africa, is considering another USD600m for the continent. 15 The USD5bn low-interest rate credit line extended by the Indian government through the EXIM Bank of India to Africa has hardly been tapped in the past 18 months. 16 Also, it was pointed out that ONGC Videsh Ltd has already made an investment of USD2.5bn in Sudan in oil producing and exploration assets. 17 ICA AR 2009_final indd :27:22 Uhr

33 ICA Annual Report Regional Development Banks The ICA Secretariat has consulted sub-regional development banks as part of its outreach and coordination activities. A first mission to sub-regional banks namely BOAD and EBID - was made in June ICA, BOAD, EBID and BDEAC recognised the necessity and the importance of strengthening their cooperation at this appropriate time, where ICA has just completed its 3-year Strategic Business Plan ( ), the implementation of which has foreseen the deepening of key partnerships and outreach activities, including with the sub-regional development banks (next to DBSA, which is an ICA member). In addition, sub-regional banks welcomed the idea of co-financing and highlighted that they were already co-financing infrastructure projects with donors. Regarding commitments, sub-regional banks shared their project lists for 2009, in which they have USD451m (BOAD) and USD163m (EBID). Outreach will be extended to the remaining sub-regional development banks to better understand their activities, to enhance ICA coordination with them and to monitor their commitments and disbursements in the coming years. A detailed list of 2009 commitments by BOAD and EBID can be found in Annexes A10 and A11. Regional Infrastructure Projects About USD3.7bn, representing 19% of total ICA commitments, went to regional infrastructure in 2009, as shown in Figure 18. This is a vast increase, by 91%, compared to the 2008 level of USD1.9bn. Traditionally multilateral donors strongly support regional infrastructure projects. In 2009 they committed USD2.8bn - representing 75% of total regional contribution - which is unchanged throughout the surveyed period. The top 3 multilateral members were WB, EC and EIB with commitments of USD1.2bn, USD0.67bn and USD0.63bn. The strongest bilateral donor in 2009 was France with USD472m. 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Multilateral Bilateral Percentage 2,8 2,0 1,7 0,9 0,9 0, ,3 0, % of regional infrastructure from total commitments! ICA members have different definitions of regional projects. They range from definitions like more than one country benefits from such projects (DBSA) to more complex ones such as AfDB and WB. The WB, for example, defines regional projects as operations with (I) involvement of more than three countries (II) benefits that spill over countries boundaries (III) an ownership that demonstrates commitment by the participating countries (IV) harmonisation between countries, and (V) which act as a part of a broadly supported regional strategy. Figure 21: ICA Members Commitments Towards Regional Infrastructure Projects Unit: USD billion Source: ICA 2010 ICA AR 2009_final indd :27:24 Uhr

34 34 ICA Annual Report 2009 ICA Secretariat Activities: 2009 / 2010 and Forward Look This chapter provides a summary of the ICA Secretariat s work given in support of members initiatives in 2009/2010. It also provides a forward look for the remainder of Activities of the Secretariat listed below correspond to the pillars and enabling actions in the ICA Strategic Business Plan (SBP) and help deliver on ICA s overall purpose, which is to be a better advocate for Africa s infrastructure development. Focus of activities is around the following pillars: Pillar One - Enhanced Coordination Pillar Two - Facilitating Regional Infrastructure Programmes Pillar Three - Increased knowledge and information Cross Cutting - Communications in support of the SBP General Activities and Achievements in 2009/2010 The ICA Strategic Business Plan (SBP) for was approved in November It moves ICA toward a more programmatic approach with more accountability for delivery against key indicators. Updates of the ICA s operating guidelines and financing plan have been delivered. The ICA Secretariat has been participating in key meetings to fulfil its mandate under the SBP e.g. AfDB Annual Meetings, World Bank Meetings, Africa Partnership Forum. As an ongoing annual activity the ICA Secretariat prepared the ICA Annual Report during to monitor ICA member commitments. The ICA Secretariat has prepared the ICA Annual Meeting, hosted by Canada, to ensure coherence with the ICA SBP and African stakeholder plans. This required close coordination, and joint work with members. ICA AR 2009_final indd :27:24 Uhr

35 ICA Annual Report Pillar One Enhanced Coordination Increased effectiveness of infrastructure financing for Africa through improved coordination is a key area for ICA. This contributes directly to achieving sustainable infrastructure development and increasing funds available for infrastructure finance. Activities and Achievements in 2009/2010 Under the ICA Energy platform, the ICA Secretariat conducted two video conference sessions with the US Treasury, in March and April The objective was to identify possible solutions to challenges related to risks in power agreements. Virtual meetings involved around 80 persons online using the World Bank s Global Distance Learning Network GDLN at the respective sites. Participants included senior technical level in different institutions involved in negotiating power agreements, e.g. Ministry of Energy, Ministry of Finance, regulators, developers, power utilities and legal advisors from Ghana, Kenya, Mozambique, Senegal and Tanzania. In addition participants from Washington DC, Johannesburg and London also joined. These meetings followed the Power Sector Symposium organized in Dakar, May 2009, which agreed this concrete next step. The results of the two VCs were presented to the highlevel event in Washington DC, on 28 April Next steps will be defined on the back of the Washington event. MoUs for enhanced coordination have been signed between (i) ICA and UPDEA (Union of Producers, Transporters and Distributers of Electricity in Africa) and (ii) West African Power Pool (WAPP). ICA participated actively in PIDA processes and provided inputs on how the PIDA structure can be improved. In addition ICA provided support and facilitated the linkage between PIDA and the AICD. ICA Secretariat played an active role in the promotion of links and the exchange between partners around the revised Africa Action Plan and PIDA - with AfDB, APF, donors etc. The ICA Secretariat will continue to participate in PIDA governance structures as an observer and will feedback relevant documents and information to members to ensure they are aware of process and next steps. ICA Secretariat co-organised a workshop with German partners BMZ, GTZ and KfW in April Preparation of the ICA Water Platform is being led by Germany with support from the ICA Secretariat. Work on the ToR, water knowledge and a secondment is ongoing to set up the Platform. The ICA Secretariat has intensified outreach activities to other financiers of infrastructure in Africa. This includes contacts with China, India and members of the Arab Fund Coordination Group resulting in their raised awareness of ICA and its work, and their active participation in ICA meetings. Feedback shows their wish to be kept informed of the ICA s work and readiness to engage. These efforts will be further intensified in 2010, also in view of identifying co-financings. The ICA Secretariat has intensified private sector outreach by strengthening links with key DFIs through participation and presentation of ICA s work at key meetings, e.g. PIDG, EU-Africa Business Forum, AfDB PPP seminars. The ICA Secretariat has engaged with the AfDB s Private Sector Department to link up with the Africa Financing Partnership (AFP) for potential project coordination, sharing of knowledge and marketing. ICA has worked on PPP seminar series with IFC, one in 2009 addressing PPP challenges in the water sector and another one co-organised with IFC on the sort sector. The seminar included presentations of practical case studies from promoters, financiers and concessionaires highlighting what is required for success. Follow-up is given with another seminar in 2010, most probably addressing the power sector. ICA AR 2009_final indd :27:24 Uhr

36 36 ICA Annual Report 2009 Pillar Two Facilitating Regional Infrastructure Programmes The ICA is placing an increasing focus on regional solutions, given their importance and unique challenges. As a result the ICA is engaged in the advocacy and brokering of regional programmes. Activities and Achievements in 2009/2010 ICA actively participated in the preparation and delivery of the High Level Joining up Africa event held in May 2010 with African and donor stakeholders. The event included a positive outcome statement on maintaining political and technical momentum on regional economic integration in Africa, and the important role ICA and infrastructure has in underpinning delivery, also in view of the ICA annual meeting to share outcomes with key stakeholders and to agree on some next steps. The ICA Secretariat co-organised a meeting on regional project preparation held in March The meeting was convened by the NEPAD Infrastructure Project Preparation Facility (IPPF), European Union Africa Infrastructure Trust Fund (EU-Africa ITF) and Infrastructure Consortium for Africa (ICA). This focused meeting helped highlight some key regional project preparation issues at both facility level, as well interactions between promoters and financiers more generally. Key process points going forward are establishing mechanisms for pipeline information exchanges and planning (including better application of Tunnel of Funds), agreeing early stage project review process, and definition of preparation needs. The following actions will take place in 2010 to help facilitate flow of bankable regional projects: Preparation of a regional project preparation check list, GIS study to be taken forward by the ICA Secretariat, follow-up meetings with partners With respect to Brokering of Regional Programmes at the ICA technical meeting it was agreed to take forward four priority regional programmes whereby lead donors, with ICA Secretariat support, would help regional institutions deliver these. ICA Secretariat issued a questionnaire to lead members in February 2010 and responses have been collated. ICA Secretariat will follow up directly with lead members to define more detailed support plans, based on their responses, which will meet their requirements for brokering regional programmes. This may include: promotion of programmes with partners, brokering coordination, mapping donor commitments, promoting Tunnel of Funds for project preparation, helping to secure financing from members / non-members The ICA Secretariat has actively supported and assisted in setting up the Italian Initiative for Risk Mitigation in Africa (IRMA) which is still at a start up phase. ICA AR 2009_final indd :27:24 Uhr

37 ICA Annual Report Pillar Three Increased Knowledge and Information Scaling up investment in Africa s infrastructure requires stakeholders to have access to good quality information as far as possible to aid their decision making. It is also about sharing best practice and innovations that may benefit delivery. Ideally this knowledge and information should be shared to build a common understanding it is a regional public good. The ICA continues to promote access to increased information and knowledge to facilitate investment in Africa s infrastructure. Activities and Achievements in 2009/2010 * The Secretariat supported the AfDB Statistics Department to migrate the AICD database and to prepare the data collection for AICD Phase Two (28 countries in addition to the AICD phase one 24 countries). The ICA Secretariat will continue to support the AICD dissemination and support members efforts how to devise, agree, fund and implement how to maintain the AICD database in the long run. * The ICA Secretariat built a 500 stakeholder database based on the contacts and relations developed. A strong management of ICA contacts will help advocate efficiently and raise ICA profile. * ICA 2008 Annual Report completed with focus on commitments and improving information on regional infrastructure programmes * ICA Secretariat shares knowledge within AfDB, contributing to Private Sector Department strategy development and the Economic Department s (ECON) Annual Development Report for 2009, which focuses on ports. * The Secretariat was involved in the organisation of the AfDB-JICA knowledge sharing seminar on crossborder infrastructure as part of the side events of the ICA Annual Meeting * Design and implement the GIS tool in collaboration with EU-Africa ITF as per project preparation outcome ICA AR 2009_final indd :27:24 Uhr

38 38 ICA Annual Report 2009 Crosscutting Communications in Support of the SBP Without good and effective communications, the ICA cannot deliver its outcomes and objectives. Activities and achievements in 2009/2010 * ICT: Published an article in ITU (International Telecommunication Union) report III on Connect Africa Initiative for 2009 * Energy: Published an article in Financial Times (September 2009) featuring the power sector in Africa and ICA activities in the sector; Interview with RFI-radio (an international French radio) on the status of the power sector in Africa * Secretariat working on case studies (PPPs) and related publications * ICA contributing to AfDB in-house communication and coordination * Supported the AICD media launch in Johannesburg in November 2009; extensive local, regional and international media coverage, including interviews for TV, radio and press (e.g. Bloomberg, Reuters, AFP, Al Jazeera, AllAfrica); Supported AICD results dissemination in southern Africa; consistent local media coverage * Revamped ICA website; newsletters, improved communication and frequent updates with members upcoming in 2010 * Issued ICA 2008 commitments reports which includes section on regional infrastructure portfolios and pipelines * Media coverage also achieved (local, regional, international) relating to AU Infrastructure Day (Jan 09), ICA Annual Meeting (Mar09) and Dakar power PPF meeting (May 09) ICA AR 2009_final indd :27:24 Uhr

39 ICA Annual Report Appendix Maps of Regional Infrastructure Projects Annex 1 - Continental Map of Transport Projects Annex 2 - Continental Map Transport Projects (Pipeline) Annex 3 - Continental Map Transport Projects Arab Funds Annex 4 - Continental Map Power Projects Annex 5 - Continental Map Water Projects Annex 6 - Continental Map ICT Projects ICA AR 2009_final indd :27:24 Uhr

40 40 ICA Annual Report 2009 Annex 1 Continental Map of Transport Projects ICA AR 2009_final indd :27:25 Uhr

41 ICA Annual Report Annex 2 Continental Map Transport Projects (Pipeline) ICA AR 2009_final indd :27:26 Uhr

42 42 ICA Annual Report 2009 Annex 3 Continental Map Transport Projects Arab Funds ICA AR 2009_final indd :27:27 Uhr

43 ICA Annual Report Annex 4 Continental Map Power Projects ICA AR 2009_final indd :27:28 Uhr

44 44 ICA Annual Report 2009 Annex 5 Continental Map Water Projects ICA AR 2009_final indd :27:28 Uhr

45 ICA Annual Report Annex 6 Continental Map ICT Projects ICA AR 2009_final indd :27:29 Uhr

46 46 ICA Annual Report 2009 Tables Annex 7 - Detailed Trends in Commitments by ICA for Infrastructure Development in Africa 2009 (USDm) Annex 8 - Trends in Commitments by ICA for Infrastructure Development in Africa (USDm) Annex 9 - Arab Fund Coordination Group Commitments 2009 Annex 10 - Regional Development Banks: BIDC Project List 2009 Annex 11 - Regional Development Banks: Approved Financing BOAD 2009 Annex 7 Detailed Trends in Commitments by ICA for Infrastructure Development in Africa 2009 North Africa SSA - SA South Africa All Africa ODA N-C ODA N-C ODA N-C ODA N-C TREND 2009 absolute Multilateral Bilateral Total TREND 2009 in percent Multilateral -95 % -26 % 41 % 235 % -11 % 373 % 35 % 100 % Bilateral -50 % 220 % 14 % -7 % -20 % 233 % -4 % 114 % Total -58 % -12 % 32 % 153 % -18 % 347 % 19 % 102 % Table 3: Detailed Trends in Commitments by ICA for Infrastructure Development in Africa 2009 Unit: USD million Source: ICA 2010 Note: ODA = Grant or loan with public concessional modalities; N-C = Non-concessional funding (from public or private sources) ICA AR 2009_final indd :27:29 Uhr

47 ICA Annual Report Annex 8 Trends in Commitments by ICA for Infrastructure Development in Africa North Africa SSA - SA South Africa All Africa ODA N-C ODA N-C ODA N-C ODA N-C 2005 Multilateral Bilaterals Total Multilateral Bilateral Total Multilateral Bilateral Total Multilateral Bilateral Total Multilateral Bilateral Total Table 4: Trends in Commitments by ICA for Infrastructure Development in Africa Unit: USD million Source: ICA 2010 Note: ODA = Grant or loan with public concessional modalities; N-C = Non-concessional funding (from public or private sources) ICA AR 2009_final indd :27:30 Uhr

48 48 ICA Annual Report 2009 Annex 9: Arab Fund Coordination Group Commitments 2009 Country Region Project Title Amount Abu Dhabi Fund for Development Eritrea East Infrastructure Projects Guinea Central Labe-Seriba-Madina Gounasse Road 5.00 Benin West N Dali-Biro-Nikki-Chikandou-Frontier Nigeria Road Tanzania East Kidahwe-Uvinza Road Burkina Faso West Samendeni Dam Morocco North Timkit Dam Arab Fund for Economic and Social Development Egypt North El-Ain El-Sokhna Power Generating Station Djibouti East Rehabilitation of Drinking Water Facilities in Djibouti City Morocco North Fes Oujda Motorway (Taza-Oujda section) Morocco North Expansion of Casablanca Rabat Motorway Tunisia North Ghannouch Combined Cycle Power Generating Station (supplementary Loan) Mauritania North Electricity Emergency Programmeme for the City of Nouakchott (Supplementary Loan) Arab Bank for Economic Development in Africa (BADEA) Ethiopia East Rehabilitation of Nekemte-Bedelle Road Botswana South wo SA Upgrading of Kasane Airport 8.00 Togo West Supply of Potable Water for three centres 5.94 Cote d Ivoire West Singrobo-Yamoussokro Highway Project 8.00 Tanzania East Water Supply in Same and Mwanga Regions Sao Tome & Principe Central Rehabilitation and Expansion of Neves 4.00 Guinea Central Sewerage for Moussoudougou Quartec in Konakry 8.10 Lesotho South wo SA Construction of Infrastructure and Industrial Shells in Tikoe 6.00 Burundi Central Bubanza-Ndora Road II 8.00 Tanzania East Rural Roads in Zanzibar 8.00 Senegal West Blouf Loop Road 8.00 Congo Central Pointe Noir Water supply Islamic Development Bank Benin West Construction of Kandi-Segbana-Nigeria border Road Cameroon Central Sangmelima-Ouesso road Mauritania North Railway Modernization Mauritania North Guelb II Expansion Morocco North Kenitra Power Plant Mozambique South wo SA Niassa Province Rural Electrification ICA AR 2009_final indd :27:30 Uhr

49 ICA Annual Report Country Region Project Title Amount Togo West Construction of Bassar-Katcham Ba Road Tunisia North Gafsa Gas Pipeline Regional Programmeme Infrastructure Development in Africa (PIDA) 1.77 Kuwait Fund for Arab Economic Development Burkina Faso West Koudougou-Dedougou Road Egypt North Abu-Qir Power Generation Station Niger West Kandadji Dam Sudan East Heightening of the Rosairs Dam Swaziland South wo SA Mbadlane Sikhuphe International Airport Road Madagascar South wo SA Rehabilitaion of Bekoratsaka-Boriziny Road Project 9.86 Benin West Kandi-Segbana-Nigeria Border Morocco North Tamlot Dam for Irrigation and Water Supply OPEC Fund for International Development (OFID) Benin West Kandi-Segbana-Nigeria Border Road Botswana South wo SA Integrated Transport Burundi Central Ntamba-Ndora Road 8.00 Mali West Taoussa Dam Ethiopia East Nekemte-Bedelle Road The Gambia West Banjul Airport Rehabilitation. Phase II Kenya East Dundori Olkalou Njabini Road (Supplementary Loan) Madagascar South wo SA Bekoratsaka Boriziny (RN6) Road Rehabilitation Tunisia North Natural Gas Distribution Development Phase II Morocco North Rural Roads Rehabilitation and Construction Phase II Mozambique South wo SA Energy Development and Access Programme 8.00 Rwanda Central Electricity Access Scale-up Senegal West Linguère-Boulal Road (Supplementary Loan) 4.70 Djibouti East Doraleh Container Port Tanzania East Same Water Supply Saudi Fund for Development Cameroon Central Foumban-Manki-Magba-Mape Bridge Road Malawi South wo SA Thyolo-Bangula Road Gambia West Banjul Airport Rehabilitation II Cape Verde West Fogo Island Ring Road Burkina Faso West Koudougou-Dedougou Road Mauritania North Atar-Tidjikdja Road Total 1, Table 5: Arab Fund Coordination Group Commitments 2009 Unit: USD million Source: ICA 2010 ICA AR 2009_final indd :27:30 Uhr

50 50 ICA Annual Report 2009 Annex 10 Regional Development Banks: EBID Project List 2009 Country Sector Project Title Amount Infrastructure Public 150,6 Cap Vert Energie Financement partiel du projet de renforcement de la capacité de production de transport et de distribution d électricité sur l Île de Santiago Mali Energie Financement partiel du projet de construction du barrage de Taoussa et de ses ouvrages annexes Niger Energie Financement partiel du projet de construction du barrage de Kandadji Sierra Leone TIC Financement partiel du projet de modernisation et d expansion du réseau d infrastructures et de télécommunications (SIERRATEL) Sénégal Transport Financement partiel du projet d aménagement de la route Linguère-Matam Mali Transport Financement partiel du projet de réhabilitation de la route Bandiagara-Bankass-Koro-Frontière du Burkina Niger Transport Financement partiel du projet de réhabilitation de la route Bella II-Gaya-Frontière du Bénin Mali Energie Financement partiel du projet d interconnexion du réseau électrique de Mali et de la Côte d Ivoire Mali Transport Financement partiel du projet de construction d un échangeur multiple et aménagement des voies d accès au district de Bamako Ghana Energie Financement partiel du projet d électrification autonome (Self- Help) dans les régions Ashanti et Brong Ahafo 9,5 7,5 7,5 30,5 12,2 6,2 10,4 29,0 7,2 30,7 Infrastructure Privé 12,6 Guinée TIC Financement partiel du projet d extension du réseau mobile InterCel Guinée Togo Transport Prise de participation au capital social de la compagnie aérienne régionale ASky 9,1 3,6 Total 163,3 Table 6: Regional Development Banks: EBID Project List 2009 Unit: USD million Source:EBID 2010 ICA AR 2009_final indd :27:31 Uhr

51 ICA Annual Report Annex 11 Regional Development Banks: Approved Financing BOAD 2009 Intitulé du projet Pays Cout Total Concours de la BOAD FINANCEMENTS SOUS FORME DE PRETS Infrastructures modernes Aménagement et bitumage de la route Djougou-Ouaké-Frontière du Togo Bénin 22,8 15,4 Construction d'un échangeur multiple au rond point de la paix et d'aménagement de la section urbaine de la RN 5 et de l'avenue Kwamé N'KRUMAH à Bamako Zone franche de la Biotechnologie et des Technologies de l'information et de la Communication (ZBTIC) à Grand Bassam Mali 40,0 13,5 Côte d'ivoire 61,3 25,1 Aménagement des ections urbanine de l'axe communautaire N 1 (C41) Guinée Bisau 17,2 13,5 Bitumage de la route MANANTALI-MAHINA (section malienne) Mali 32,5 11,6 Bitumage de la route MANANTALI-MAHINA (section sénégalaise) Sénégal 11,6 Construction d'une centrale à base de charbon par la compagnie d'électricité Sénégal 231,4 24,1 Projet d'amengament de la zone lagunaire dans la ville de Lomé Togo 15,4 14,5 Projet de bitumage de la route Boundiali-Tingrela Côte d'ivoire 39,0 11,6 Pavage de rues et assainissement dans la ville de Porto-Novo Bénin 10,7 7,7 réhabilitation de la route Bella-Gaya-frontiere du Bénin Niger 43,3 15,4 Renforcement de la route Ouaga-Pô frontiere du Ghana (pret complementaire) Burkina Faso 86,1 12,5 Sous-total 12 projets 599,7 176,3 Table 6: Regional Development Banks: Approved Financing BOAD 2009 Unit: USD million Source:BOAD 2010 ICA AR 2009_final indd :27:31 Uhr

52 52 ICA Annual Report 2009 ICA AR 2009_final indd :27:31 Uhr

53 ICA Annual Report Endnotes 1 From the total amount of USD9,4b for disbursements, only USD6,1b or 65 % were split by region and/or sector, data in Figure 17 is based on the total amount of USD6,2b. 2 ibid. 3 PPIAF 2010, Assessment of the impact of the crisis on new PPI projects Update 5 PPI data update note 35 4 PPIAF 2010, Assessment of the impact of the crisis on new PPI projects Update 5 PPI data update note 35 5 PPIAF 2010, Assessment of the impact of the crisis on new PPI projects Update 5 PPI data update note 35 6 Saragiotis, 2008 Public-Private Partnerships in Infrastructure Days PPIAF May 2010 Assessment of the impact of the crisis on new PPI projects Update 6 PPI data update note 35 8 Chen et al, 2007 Relative share of African market, by contractor nationality, ACET (African Center for Economic Transformation) October 2009 Looking East China s Engagement with Africa: Benefits and Key Challenges 10 ACET November 2009 Looking East China s Engagement with Africa: China for Africa s Policy-Makers Volume Juma and Ayittey, February 2010 Africa and China 13 Foster Oct 2008, The changing landscape of infrastructure finance in Africa Nontraditional sources take on a growing role 14 India-Africa business conclave opens with large African participation 15 The Finacial Express, March INRIN May 2010 Plugging Africa s Tech Gap, with Help from India 17 IANS, December 2009 India, Sudan ink deal on expanding energy ties ICA AR 2009_final indd :27:31 Uhr

54 ICA AR 2009_final indd :27:44 Uhr