What is a bankable project in Africa?

Africa's journey towards successful development and infrastructure financing hinges on the collaborative efforts of government, private investors, and entrepreneurs in bringing forth bankable projects. Sanjeev Gupta, the Executive Director of Financial Services at Africa Finance Corporation, recently shared insights on what constitutes a bankable project in an exclusive interview with CNBC Africa's Christycole Popoola. Gupta emphasized the critical role partnerships play in driving infrastructure development across the continent, highlighting the need for a cohesive approach by all stakeholders involved. He pointed out that infrastructure projects require a multi-faceted partnership involving governments, private sectors, banks, development finance institutions (DFIs), and local communities to ensure success. Addressing the issue of access to funding, Gupta highlighted that investors worldwide are primarily seeking returns on their investments, and Africa is no exception. While there may be a perception of a funding gap in Africa, Gupta clarified that the continent has attracted significant funds, but the challenge lies in identifying enough bankable projects that investors find attractive. He underscored the importance of transforming ideas into viable projects that offer investors a level of comfort and certainty in deploying their funds. When discussing the concept of bankability, Gupta emphasized the subjectivity of investor perception and risk assessment in evaluating projects. Factors such as political environment, currency risk, project readiness, and enforceable agreements all contribute to determining the bankability of a project. He stressed the critical role entrepreneurs play in shaping the macroeconomic environment to enhance the feasibility and attractiveness of their projects to funders. Gupta further illustrated that entrepreneurs need to consider various factors, including environmental impact, community engagement, market affordability, and project construction costs, to ensure the overall financial viability of their ventures. Success in project implementation ultimately depends on aligning the project idea with the external environment in which it operates. As Africa continues its trajectory towards infrastructure development and financing, the emphasis on fostering robust partnerships, promoting bankable projects, and aligning with investor expectations will be paramount in driving sustainable growth and prosperity across the continent.