AUDA-NEPAD secures $82bn investment commitments to finance infrastructure

African Union Development Agency AUDA-NEPAD has recently announced a significant milestone in infrastructure development for the African continent, with investment commitments surpassing the initial target of $14 billion to reach an impressive $82 billion by 2022. This achievement underscores a transformative shift in the region's approach to financing major projects and underscores the importance of public funding in driving infrastructure development. In a recent interview with CNBC Africa, Idriss Adoum, the Director for Infrastructure, Trade Industrialisation, and Regional Integration at AUDA-NEPAD, delved into the agency's success in exceeding expectations and outlined strategies for future infrastructure financing. One of the key themes highlighted in the interview was the significant role of government funding in financing infrastructure projects in Africa. Adoum highlighted that out of the $82 billion investment commitments, approximately 52% were financed directly from national budgets, showcasing a strong commitment from African governments towards driving development initiatives. This approach sets Africa apart from other regions globally, where private sector contributions to infrastructure financing often exceed public financing levels. Adoum emphasized the need to leverage the capacity of the private sector and increase their involvement in infrastructure projects to ensure sustainable development. Another crucial point discussed in the interview was the necessity of improving project preparation to attract more private sector investment. Adoum outlined plans to invest more in the preparatory phase of projects to enhance their bankability and appeal to private investors. By focusing on rigorous project preparation, AUDA-NEPAD aims to create a conducive environment for private sector involvement in infrastructure development. Adoum also highlighted the importance of addressing governance challenges in African countries to instill confidence in private sector investors and attract more funding to the region. Looking ahead to the future of infrastructure development in Africa, Adoum discussed the implementation of the service delivery mechanism, which aims to facilitate project preparation and enhance the quality of infrastructure projects. By providing support to regional economic communities and member states in project origination and preparation, AUDA-NEPAD seeks to streamline the investment process and attract more investors to infrastructure projects. Adoum noted that the service delivery mechanism had already yielded positive results, with several expressions of interest received for structuring projects since its implementation. In addressing the risks associated with infrastructure investment in Africa, Adoum highlighted the importance of de-risking projects to provide a clear picture of the opportunities and challenges involved. He underscored the role of initiatives like the African Infrastructure Guarantee Mechanism (AIGM) and the Continental Business Network in mitigating risks and attracting investors to the region. By fostering collaboration among African institutions and guarantee funds, AUDA-NEPAD aims to instill confidence in investors and promote greater involvement of African pension funds in infrastructure projects. The interview concluded with a discussion on the Presidential Infrastructure Champion Initiative and its role in promoting peace, stability, and regional integration in Africa. Adoum emphasized the importance of engaging with heads of state to ensure a conducive environment for infrastructure development and underscored the agency's commitment to driving sustainable growth and development across the continent. As AUDA-NEPAD continues to lead the way in infrastructure financing, the future looks promising for African infrastructure development.