Closing Africa’s infrastructure financing gap
The world faces a $15 trillion infrastructure deficit by 2040, with annual investments needing to rise from the current $2.5-$3 trillion to more than $6 trillion. This gap constrains growth and development. As Governments cannot fund this alone. Private sector capital is essential and that is what we’ll be discussing, infrastructure financing in Africa joined by Zakhele Mayisa, Co-head, Africa Infrastructure Finance, Nedbank.
Thu, 12 Oct 2023 16:52:21 GMT
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AI Generated Summary
- The global infrastructure deficit is projected to reach $15 trillion by 2040, necessitating increased annual investments to over $6 trillion to support growth and development.
- Private sector capital plays a crucial role in bridging the funding gap for infrastructure projects in Africa, alongside risk mitigation strategies to protect investments.
- Key trends in African infrastructure financing include investments in transport and logistics, water infrastructure, and renewable energy sources like green hydrogen.
The global infrastructure deficit is projected to reach a staggering $15 trillion by the year 2040. To bridge this gap, annual investments must increase from the current $2.5-$3 trillion to over $6 trillion. This shortfall not only hinders growth and development but also presents a significant challenge for governments. Recognizing the limitations of public funding alone, the role of private sector capital in infrastructure financing becomes paramount. CNBC Africa delved into this pressing issue by interviewing Zakhele Mayisa, the Co-head of Africa Infrastructure Finance at Nedbank. Mayisa shed light on the strategies and trends in infrastructure financing in Africa, particularly focusing on risk mitigation and project development. Nedbank's approach involves a two-pronged business unit aimed at project finance debt and risk mitigation, providing comprehensive solutions to address the continent's infrastructure needs. In discussing the challenges and opportunities in the African infrastructure landscape, Mayisa emphasized the importance of de-risking investments and identifying key trends that are shaping the sector's future. Geographically, investments in transport and logistics infrastructure are being driven by the need to support commodity exports and improve market connectivity. Additionally, water infrastructure projects, including water security and wastewater treatment, are gaining traction as countries prioritize sustainable development. Energy security remains a critical focus, with a growing interest in renewable energy sources and emerging sectors like green hydrogen. Despite the complex nature of infrastructure financing in Africa, Mayisa expressed optimism about the diverse opportunities available and the potential for sector growth. As the year progresses, continued discussions and collaborations are expected to further advance infrastructure development on the continent.
