Feb 25, 2011
SADC mulls infrastructure fund, as it finalises master plan and embraces PPPsBack
Construction|Africa|Development Bank Of Southern Africa|Education|Ports|Private Partnerships|PROJECT|Projects|Road|Roads|Water|Africa|South Africa|Zimbabwe|USD|Development Facility|Economic Infrastructure|Healthcare|Ratified Protocol|Water Infrastructure|Admassu Tadesse|Infrastructure|Power|Sanjay Pradhan|Water|Recently Ratified Protocol
© Reuse this
The region’s Finance and Economic Plan-ning Ministers also agreed in early February to proceed with a workshop in March to strategise the development of a new SADC fund to support the direct financing of infrastructure projects in the territory.
The SADC has already moved to strengthen the financial capacity of regional institutions to undertake regional infrastructure projects, through the establishment of the Project Preparation and Development Facility, which will seek to take projects to a bankable level.
Deputy executive secretary for regional integration João Caholo reported last week that the plan – the finalisation of which was being accelerated, following the inaugural meeting of the SADC’s infrastructure Ministers in Zimbabwe last year – would seek to leverage private-sector funding and partnerships to alleviate public financing constraints.
Speaking at the inaugural SADC Public–Private Partnerships (PPPs) Forum and Net-work, which was held in Midrand last week, and involved 130 PPP practitioners from across Southern Africa, Caholo said that there was broad-based recognition that such partnerships could assist governments in closing material financial, managerial and technical gaps, while supporting further regional integration.
The partnership model would be extended to cross-border economic infrastructure, in line with the recently ratified protocol on Finance and Investment, which called for a greater economic policy convergence and regulatory harmonisation so as to remove the restrictions to greater economic integration. But PPPs could also be deployed on social infrastructure projects, such as those emerging in education and healthcare.
The Southern African master plan would also feed into the African Union’s Plan for Infrastructure Development in Africa, or Pida, being designed to foster both intra- regional and extraregional coordination and resource mobilisation.
A recent World Bank-initiated study estimated Africa’s yearly infrastructure deficit at $91-billion, while the yearly infrastructure gap (that which could not be funded by governments) stood at $31-billion.
For that reason, African governments were increasingly keen on PPPs, with the Development Bank of Southern Africa’s (DBSA’s) international division head Admassu Tadesse reporting that partnerships had already been widely embraced in the communications sector.
There were also currently 34 independent power producers with a combined generation capacity of 3 000 MW, as well as 26 container terminals, 14 railways and four airport concessionaires. There were also toll road projects either under construction or being given consideration.
World Bank Institute vice-president Dr Sanjay Pradhan told delegates that a recent study found that the infrastructure deficits in 24 African countries were cutting yearly growth rates by up to two percentage points and reducing productivity by 40%.
He said that PPPs could aid the continent in its delivery of much-needed infrastructure, but stressed that not all such projects were well designed and implemented.
Therefore, practitioner networks, such as the one being developed in the SADC, could prove crucial in facilitating peer learning and spreading best practices.
The SADC forum and network, which Pradhan described as representing the “new frontier” for development practitioners, had been created with the support of the African Capacity Building Foundation, the DBSA, the German Agency for International Cooperation, the SADC Development Finance Resource Centre, South Africa’s National Treasury and the World Bank Institute.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other News This Week News
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...