AfDB steady on transforming Africa’s infrastructure and investment

The African Development Bank (AfDB) continues to play a crucial role in transforming Africa's infrastructure landscape, working to bridge the gap between public and private sector resources. Solomon Adegbie-Quaynor, Vice President for Private Sector, Infrastructure & Industrialisation at AfDB, recently shared insights into the bank's strategies and initiatives in a CNBC Africa interview. One of the key challenges facing many African countries is the limited fiscal space available for financing development priorities through the public sector. To address this, AfDB advocates for public-private partnerships (PPP) as a means to attract private sector investment. Adegbie-Quaynor emphasized the importance of building government capacity to structure PPPs, reforming legal and regulatory frameworks, and developing bankable projects. AfDB supports both governments and private sector entities in coming together to facilitate infrastructure development through various means, including project financing and risk mitigation instruments. The bank's sister institution, Africa 50, has been instrumental in infrastructure project development, with a recent $500 million platform created to support local and regional developers in implementing infrastructure projects, including PPPs. AfDB also applies risk mitigation and credit enhancement instruments to ensure the successful implementation of infrastructure projects. In addition to financing projects, AfDB focuses on promoting regional value chains and intra-African trade. Adegbie-Quaynor highlighted the importance of economic corridors in facilitating trade and ensuring the harmonization of policies and regulations. By prioritizing economic corridor development, AfDB aims to enhance Africa's global trade positioning and encourage the export of value-added products within the continent. When discussing infrastructure sub-sectors with the greatest potential to accelerate Africa's global trade, Adegbie-Quaynor emphasized the interconnected nature of various infrastructure components. He highlighted the significance of energy, transport logistics, digital infrastructure, and agricultural infrastructure in creating a conducive ecosystem for economic growth and competitiveness. Addressing the issue of risk in infrastructure investment, Adegbie-Quaynor underscored the importance of risk mitigation and credit enhancement strategies. AfDB offers products like the partial risk guarantee to provide investors and lenders with confidence in the face of sovereign risks. By collaborating with multilateral institutions and leveraging strategic investment funds, AfDB seeks to de-risk infrastructure investment and attract private sector participation. Furthermore, the bank is actively engaged in mobilizing local currency funding for infrastructure projects, partnering with local credit enhancement companies to access funding from African institutional investors and pension funds. Initiatives like the Damana Guarantee Company in Kenya demonstrate AfDB's commitment to fostering sustainable infrastructure financing solutions across the continent. As Africa continues to strive for economic growth and development, the role of institutions like AfDB in driving infrastructure transformation and promoting sustainable investment practices remains paramount. By nurturing public-private partnerships, supporting regional integration, and implementing innovative risk mitigation measures, AfDB is poised to accelerate Africa’s infrastructure development and enhance its global competitiveness.