IFC impact on sustainable infrastructure in Africa

Africa's infrastructure sector is thriving, but it is not without its challenges. The International Finance Corporation (IFC) is at the forefront of bridging the gaps in infrastructure development by providing long-term financing, sustainability-linked financing, and fostering partnerships with the private sector. CNBC Africa recently sat down with Sarvesh Suri, IFC's Regional Industry Director for Infrastructure and Natural Resources, to gain insights into the organization's strategies for promoting sustainable infrastructure projects across the continent. As the private sector financing arm of the World Bank Group, IFC has made significant strides in driving investments in Africa, with a focus on private sector initiatives. In the last fiscal year, IFC invested over $14 billion in Africa, marking a record year for the organization. However, the onset of the COVID-19 pandemic in 2020 presented new challenges for infrastructure investment in emerging markets. Governments were forced to divert resources towards addressing the immediate impacts of the crisis, leading to increased indebtedness and heightened political risks. Additionally, rising interest rates have also dampened investments in the infrastructure sector globally. In light of these challenges, public-private partnerships have emerged as a crucial strategy for IFC in driving infrastructure projects in Africa. Through advisory services, investment support, and transaction advisory services, IFC collaborates with governments and multilateral development banks to create conducive environments for public-private partnerships. By structuring projects transparently and mobilizing financing from various sources, IFC plays a pivotal role in attracting private sector investors to infrastructure projects. Ensuring sustainability is a core focus for IFC in its infrastructure projects in Africa. The organization adopts a triple bottom line approach, evaluating projects based on financial sustainability, economic viability, and environmental and social impact. Rigorous due diligence processes are conducted to assess the long-term viability of projects, including cash flow analysis and risk mitigation strategies. Moreover, IFC works closely with project stakeholders to ensure that communities benefit from infrastructure projects while minimizing negative environmental impacts. Recently, the World Bank Group and the African Development Bank joined forces to expand electricity access to millions of people in Africa by 2030. Through country compacts and detailed business plans, the initiative aims to drive reforms and investments in on-grid and off-grid electricity across 15 sub-Saharan African countries. Nigeria, with a target of connecting 48 million people, stands out as a key focus area for the program. The upcoming annual meetings in Washington, D.C. and a planned head-of-state summit aim to bring together key stakeholders to finalize and sign these compacts, paving the way for private sector investment of over $170 billion in the region.