Developing the Energy Sector in Africa Private Sector involvement

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Developing the Energy Sector in Africa Private
Sector involvement
Danida development Days June 2009
Youssef Arfaoui
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• Outline
• Energy Highlights from Africa
• Infrastructure Investment in Africa
• Way forward Conclusion

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Africas Energy resource Potential
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Africas Energy resources Energy production in
Africa is around 9,5 of the world output but
consumes . only 3.
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Highlights Energy supply Africa High Need for
Investment in the sector
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Indicative List of Regional Projects
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Indicative List of National Projects
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Clean Energy Investments
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Operational Results (Achievement)
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The Eskom project is the banks largest
non-sovereign loan

• Southern Africa
• Investment USD 30 B
• ADB loan USD 500 M
• ADB roles
• Long-term lender
• Regional partner
• Benefits
• 100 power access
• Jobs, growth
• Regional expansion

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The Pan-African Infrastructure Development Fund
(PAIDF) is one of the largest infrastructure
equity funds in Africa

• Pan-African
• Investment USD 650 M
• ADB equity USD 50 M
• ADB roles
• Regional sponsor
• Fund mobilization
• Benefits
• Regional infrastructure
• African pension funds

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The 250MW Bujagali Hydroelectric Power Project, a
catalyst for Power Sector Reform

• Uganda
• Project Cost USD 736 M
• ADB loan USD 110 M
• ADB roles
• Project Structuring
• Long-term Lender
• Benefits
• Independent power project (IPP)
• Expand the supply for electricity
• Reduce generation cost
• Long-term socio economic benefits

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The 15MW Sahanivotry Small Hydroelectric Power
Project, a catalyst for Power Sector in Madagascar

• Madagascar
• Project Cost USD 13 M
• ADB loan USD 6 M
• ADB roles
• Project Structuring
• Long-term Lender
• Benefits
• Independent power project (IPP)
• Expand the supply for electricity
• Reduce generation cost
• Long-term socio economic benefits

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Although . Africa is mostly affected by the
various Crisis

• A. Energy Crisis
• Draughts ( Climatic change)
• Oil price fluctuation
• B. Financial Crisis
• Revenue Drop
• Foreign Direct Investments reduced

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Way forward

• Africa needs to continue it investments
  programs in particular in the Energy sector
• New Credit facility put in place by the AfDB
• AfDB Capital increase to be supported
• Assistance to Low Income Countries (LIC) with
  concessional resources (ADF)
• Support Private Sector investments in Africa

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Africa Commissions energy initiative
implementation structure
Donors
Technical assistance from The donor
Implementing Agency AfDB
Country Offices participation

• Executing Agencies (Option.1)
• 1. AFREPREN Kenya
• 2. GTIEA- East African Tea Trade Association
• The project pipeline is available and Studies are
  done

Executing Agency (Option.2) The Bank Departments
(OPSM and Public sector ) Access direct to the
Funds through FAPA Grant and seed Capital

• Executing Agency
• Financial institutions
• Line of credit from the AfDB
• a. Project financing
• b. Assist the sponsor to develop the project

• Capacity building
• Policy development
• Strategy development
• Etc

Project sponsor
Project developers / Project sponsor
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In Summary

• Opportunity for lucrative investment in Africa
  expanding rapidly.
• Investment climate improving, but remains
  challenging with region and sector specific
  knowledge critical.
• The Infrastructure Finance Team is a partner that
  provides the key expertise required to facilitate
  investors/project sponsors achieve business
  success in Africa whilst harnessing sustainable
  development.

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THANK YOU
Sidi Salem hydro-electric,Tunisia Photo
Youssef Arfaoui