Jun 19, 2012
$500bn infrastructrue plan to be presented to SADC leaders in AugustBack
Cairo|DRC|DURBAN|Luanda|Lubumbashi|Maputo|Africa|Hydropower|India|PROJECT|Projects|Resources|Road|Standard Bank|transport|Tripartite-Free Trade|Water|Africa|Europe|Angola|Brazil|China|Democratic Republic Of Congo|DRC|Germany|Japan|Kenya|Mozambique|South Africa|Tanzania|United Kingdom|United States|Zambia|USD|Bank|Energy|Finance|Finance Ministers|Metrology Infrastructure|Product|Transborder Infrastructure|Environmental|Infrastructure|Power|Water|East Africa
© Reuse this
The plan proposes the development of regional power, transport, water, communications, tourism and metrology infrastructure over the 15-year period, from 2012 to 2027.
The RIMP has been broken down into its respective subcomponents, with deployment expected to be pursued over three five-year intervals, with the first implementation period having been outlined for 2012 to 2017.
SADC secretariat deputy executive secretary for regional integration João Caholo says the master plan is the product of ‘deep’ stakeholder consultation and will be presented to regional infrastructure ministers in Luanda, Angola, next week and then to a gathering, in the same city, of the bloc’s finance ministers in July.
Chaolo and his team also hope to convince the finance ministers to align the implementation of the plan with the establishment of a SADC development fund, or bank, with an initial capitalisation of between $600-million and $1-billion.
He stresses, though, that the master plan is not dependent on the creation of such a regional financing mechamism. “But we need leadership and commitment from the 15 SADC member States,” he avers, explaining that these countries are the “sole custodians” of the RIMP.
The initiative is based on an assessment that intraregional trade is currently constrained by a lack of ‘connectivity’ and that the development of transborder infrastructure could stimulate further growth and development, as well as facilitate a transition away from the current over-reliance on mineral and agricultural resources within SADC economies.
At present, intraregional trade comprises less than 20% of total trade and the bulk of that trade takes place between South Africa and the other 14 member States. Recent research published by Standard Bank shows that South Africa’s trade with the rest of Africa rose to R220-billion, or 17% of the country’s total trade with the world. But the bank concludes that “South Africa does not trade enough with Africa” and that the country’s “weak economic diplomacy” on the continent means that full commercial value is not being gained.
“One of the critical missing links is infrastructure,” Caholo asserts. But he acknowledges that far more also needs to be done to reduce the red tape and improve standards harmonisation so as to facilitate greater intraregional trade and investment.
Power interconnector projects feature prominently in the plan, including transmission network proposals that move beyond the SADC boundaries into East Africa, such as the Zambia–Tanzania–Kenya Interconnector.
In fact, Caholo stresses that there has been a deliberate effort to align the RIMP with moves to foster the so-called Tripartite-Free Trade Area, or T-FTA, involving the SADC, the Common Market for Eastern and Southern Africa and the East African Community blocs.
The T-FTA negotiations began last year and should they be concluded, the area would span from Cape to Cairo, include 27 countries, 533-million citizens, and represent a combined gross domestic product of $833-billion. A preliminary date of 2013 has been set for the T-FTA’s launch.
Caholo reports that the RIMP has also be aligned with the 51 priority infrastructure projects identified by the African Union, under the Programme for Infrastructure Development in Africa, or Pida, which includes the much-vaunted Inga hydropower project, of the Democratic Republic of Congo (DRC), as well as the proposed North-South transport corridor, linking Lubumbashi, in the DRC, to Durban, in South Africa.
The Pida is also likely to receive support from the World Bank, whose newly appointed VP for the Africa region Makhtar Diop is on record as saying that infrastructure projects that promote further regional integration are likely to be prioritised by the bank in the coming years.
Once the plan has been officially endorsed, the SADC secretariat will conduct road shows in Brazil, China, Europe, India, Japan, the UK and the US to expose potential investors to the opportunities available within the RIMP.
Caholo says that, while the member States will be the primary drivers, the challenge is too large for the countries to tackle alone and there will be scope for foreign participation, as well as for the private sector. The investment need in the energy sector alone over the coming five years is estimated to be $42-billion.
The immediate priority, though, is to undertake technical, environmental and financial feasibility studies for the project so as to prepare them for presentation to investors.
A Project Preparation Development Facility (PPDF) has already been established at the Development Bank of Southern Africa, but Caholo says additional resources are required to enable it to carry out the feasibility investigations.
The PPDF has already received some grant funding from KfW, of Germany. The member States will be asked to inject further capital to enable it to prioritise, select and progress projects to a bankable stage.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Energy News
Updated 3 hours ago Nigeria's main oil union has shut down the local operations of US oilfield services provider Halliburton Co in protest against job cuts, the trade body said on Tuesday. Tokunbo Korodo, Lagos chairperson for the National Union of Petroleum and Natural Gas Workers...
Article contains comments
Updated 1 hour 2 minutes ago Imperial Holdings has entered into exclusive negotiations with Hollard Insurance and an unnamed associated party over the possible acquisition of Imperial’s interest in the Regent Insurance and Regent Life Assurance businesses, which hold long- and short-term...
Updated 1 hour 26 minutes ago While global economic factors impacted South Africa’s weak growth prognosis, there were binding constraints coming from the electricity supply uncertainties, said Reserve Bank (Sarb) deputy governor Francois Groepe. On Tuesday, Stats SA said the country’s GDP...
Updated 1 hour 57 minutes ago Striking MTN employees kept up their picket at the company's 14th Avenue offices in Fairland, Randburg, ahead of an expected meeting on Wednesday to break the deadlock. With police officers guarding the entrance to the multinational company, a group of about 50...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...