Private Infrastructure Development Group (PIDG)

A consortium of nine donor organisations who have joined together to help facilitate PSI in infrastructure in developing countries, with a principle focus on SSA Countries

Current Members of PIDG

Austria Switzerland

Australia The Netherlands

Germany United Kingdom

Ireland World Bank Group

Sweden (through the IFC)

Investment in New Infrastructure in Africa

65%Governments

20%PSI

15%ODA

• Current investment totals c US$24 billion per year.

• WB/AfDB estimate that this needs to be more than doubled if even basic needs are to be met within the coming decade.

Distribution of Current Investment

Constraints to PSI

Lack of an appropriate enabling environment

Shortage of long-term FX debt

Shortage of local debt

Limited local capacity

What PIDG and its Partners are doing to help

• PPIAF (a PIDG partner) - helps improve the enabling environment

• InfraCo Africa – develops projects for the market• EAIF – provides long-term hard currency debt to

bridge financing gaps• GuarantCo – provides local currency guarantees

to local debt providers• TAF – helps build local implementing capacity

InfraCo Africa

February 2011

Creating viable infrastructure investments across Sub-Saharan Africa

Lack of resourcesLack of technical expertise

Lack of funds

Africa faces a Capacity Gap

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Developing Countries:

• In developed countries governments have the capacity and funds to develop PPP projects “in-house” and attract private sector investors

• Developing country governments face a capacity gap:

Capacity Gap

Project/PPP Development Cycle has Three Main Components

Conceptualize Develop Build & Operate

Developed Countries:

InfraCo was created to bridge the Capacity Gap

Government’s Role

Government’s Role

Private Sector’s Role

Private Sector’s Role

InfraCo and Procurement

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• As a publicly funded entity, InfraCo must ensure value for money and transparency in all its procurement activities

• InfraCo follows PIDG (European Union) procurement regulations:• All contracts are procured competitively and assessed

transparently

• Major contracts (e.g. EPC, O&M) are advertised widely in the business press and the European Journal

• Consultancy work is procured through competitive bidding, or if there is only one qualified bidder, value-for-money benchmarking is used

• InfraCo selects equity investors through a competitive bidding process and uses competition to ensure costs of debt are kept low

Governments across Africa are Partnering with InfraCo

Cape Verde: 26MW Wind Farm Project

Ghana: 340MW Gas Turbine Power Plant

Guinea: Mini-hydro Project

Senegal: Wind Power

Zambia: Agricultural Irrigation

Zambia: Hydro Power Project

Kenya:Nairobi Rail

eleQtra Offices

Senegal: River Transport

Mozambique: Bio-ethanol

Uganda:Multi-sector, road & water transport, water, power

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Some InfraCo ProjectsCenpower, Ghana:• 340 MW Combined-Cycle Gas Turbine power

plant near Tema

• Approx. project cost $400m

• InfraCo has led development in partnership with local private developer

• Site, Permits and Generation license secure

• InfraCo secured PPA with ECG, has managed EPC procurement

• Equity investment secured from Africa Finance Corporation

• Competitive EPC procurement ongoing with bids received from multiple bidders

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Some InfraCo ProjectsBugala Island, Lake Victoria, Uganda:• Two New Ferries plus two landings:

– Design and Build contract with Johs. Gram-Hanssen A/S of Denmark and local Lake Victoria shipyard

– Ferries $3.5m each / 120t carrying capacity / 60 vehicles 120 passengers / 10 knots

– Training of Ferry Crew

– Full cost recovery vehicle tariffs

• 65 km road / 1.6 MW solar-diesel power plant / distribution network on island / water supply

• Total project cost $40m

• Financing through GuarantCo (tenor extension), USAID (60% guarantee), Finnfund, Nedbank

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Some InfraCo Projects

Chiansi Irrigation, Zambia:• $30m investment in irrigation infrastructure

• Water rights secured to extract from Kafue river

• Project will lease 2,300 ha of smallholder and commercial farm land for 25 years

• Landowners participate in project equity and receive share of cash flows from farming activities

• Smallholder farmers receive access to market garden irrigated plots

• Pilot project established in 2009 is producing wheat and soya on 150 ha of smallholder land

• Capital financing from ORIO, FMO, Lundin for Africa, EAIF and commercial investors

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Some InfraCo ProjectsRiver Transport, Senegal:• Up to $700m River Transport project for iron

ore, phosphate and general cargo transport on the Senegal River including transfer to Panamax dry bulk ship in new port in St. Louis

• Senegal River Development Authority - OMVS - (advised by the Port of Rotterdam) have signed MoU with InfraCo to develop project as a PPP

• The Project is currently in the Evaluation stage

Nairobi Commuter Rail, Kenya:• JDA signed with Kenya Rail, currently in

feasibility stage • $200m refurbishment and extension of

commuter rail system in Nairobi• Permission from Kenyan Public Utility

Oversight Authority to do a negotiated contract on the basis that “the services offered by InfraCo are unique”

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Some InfraCo ProjectsCape Verde Wind Farm:• 26 MW power plant, total project cost

€65m

• Will provide 25% of national power needs replacing expensive fossil fuel generation

• InfraCo began development in partnership with Electra and GoCV in 2006

• InfraCo secured site, permits, PPA, government guarantee and finance and managed procurement

• Vestas selected as EPC contractor following competitive process

• Financing secured from AFC, Finnfund, AfDB and EIB

• Construction started in November 2010 and will be completed by late 2011

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6MW

8MW

4MW

8MW

Cape Verde – Case Study – Awarded Contracts

Cape Verde Awarded Contracts:• Owners Engineer - €300,000

• Wind Assessment - €40,000

• Environmental Consultant - €230,000

• Lenders Engineer - €130,000

• Financial Advisor Contract - €700,000

• Owners Legal Counsel - €1,500,000

• Lenders Legal Counsel - €1,100,000

• Wind Farm EPC contract - €45m

• Wind Farm Maintenance Contract - €500k / yr

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6MW

8MW

4MW

8MW