Funding For Infrastructure Improvements In Africa Dependent On Partnerships

Funding For Infrastructure Improvements In Africa Dependent On Partnerships

From CNBC Africa

Africa needs to create partnerships and policies that accommodate the ease of doing business and infrastructure funding in the continent.

According to Alan Sproule, director of Project Finance Africa of Standard Bank, infrastructure funding for power and railway projects in the continent continues to attract the most private capital.

This is despite Africa’s infrastructure funding gap of roughly 30 billion dollars.

“Through natural resources, there’s a means to make rail more affordable and bankable,” said Sproule at a panel discussion at the Investing in Resources and Mining in Africa conference on Wednesday.

Other panel members included Daryl Govender from Eskom, and former Coal of Africa CEO John Wallington.

Because of the continent’s large infrastructure deficit, a number of private companies take on the task of funding largescale infrastructure projects.

Sproule added that while private and industrial companies eventually build the necessary infrastructure and buildings, the finished product eventually becomes a national asset.

“At the end of the day, it’s still a national asset. The private sector’s been asked to build it [the project] but it remains a national asset,” he explained.

Major industrial operations such as mining and manufacturing, and in South Africa in particular, make up a significant amount of the country’s electricity consumption.

Despite South Africa having the largest coal reserve on the continent, electricity capacity continues to be a recurring problem and a major setback to increasing the country’s economic production.

Among the panel members was Charles Siwawa, CEO of the Botswana Chamber of Mines, who said that Botswana’s little consumption of electricity, due to its small population, could assist in providing more electricity for the region.

He added that Botswana also has the second largest coal reserve in the continent, and a partnership between it and South Africa has the potential to alleviate electricity capacity shortages and encourage intra-regional trade.

Organizations such as the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of West African States (ECOWAS) have been established to encourage intra-regional trade.

Read more at CNBC Africa.