InfraCo A successful new approach to developing infrastructure

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InfraCo A successful new approach to developing
infrastructure

Valentine ChitaluDirector, InfraCo
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Introducing InfraCo

• InfraCo is a publicly-funded, privately-managed
  infrastructure development company (est.2005)
  operating in the lower-income countries in Africa
  and parts of Asia
• Part of the Private Infrastructure Development
  Group owned by ADA (Austria), DFID (UK), DGIS
  (Netherlands), IFC (World Bank), Irish Aid
  (Ireland), SECO (Switzerland), SIDA (Switzerland)
• InfraCo has offices in London, New York,
  Singapore, Kampala, Lusaka and Accra
• InfraCo Africa recently launched a 300 million
  investment fund backed by 100m commitment from
  OPIC (USA)

PIDG
www.pidg.org
InfraCo
EAIF
GuarantCo
TAF
www.infraco.com
InfraCo Asia
InfraCo Africa
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What InfraCo does

• Identifies green field infrastructure and
  agriculture opportunities and creates a local
  subsidiary
• Develops projects from concept to financial close
  (i.e. when raise third-party debt and equity) at
  own cost and risk
• Works with local and foreign partners when
  appropriate (e.g. JDAs with mining companies)
• Raises targeted grant funding to ensure
  affordability of services for the poorest
• Secures commercial debt financing and sells
  majority of equity in local company to domestic
  and international investors
• Reinvests proceeds from successful sales in
  developing more projects (InfraCo itself is
  non-profit distributing)

InfraCo makes infrastructure projects bankable
in situations where the private sector would
otherwise be unwilling or unable to invest
because of high upfront costs and risks
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InfraCos project portfolio in SSA
Uganda integrated infrastructure services (Lake
Victoria)
Ghana 250MW combined cycle power generation
Ethiopia wind power
Cape Verde 30MW wind power
Uganda utilities distribution company (Lake
Albert)
Senegal wind power
Kenya commuter rail service
Guinea integrated power and rail
Kenya wholesale fresh produce market
Nigeria 180MW combined cycle power generation
Tanzania wind power
400m third-party investment target for 2009
Project (part) sold
Zambia smallholder irrigation project
Sale expected 2009
Madagascar water supply
Under development
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Project examples a closer look

• Kalangala, Uganda
• US40m infrastructure services initiative on
  Bugala Island, Lake Victoria
• Existing infrastructure dilapidated or
  non-existent
• Project will provide a power supply for the
  island, a ferry service, a main island road and
  potable water supply
• Supports large palm oil plantation
• Affordability for the poor is ensured through
  project structuring and output based aid
• Debt and equity funding being raised from
  domestic and international sources
• Project now being replicated on Lake Albert
  (150m)

• KPONE Power, Ghana
• C. 300m gas-fired power plant in Tema
• Will provide an additional 300-400MW of
  generating capacity - substituting for existing
  diesel generation
• Utilise capacity from West African gas pipeline
• Completed PPA negotiations with main off-taker
  (ECG) and secured EPC contract
• Capital raising activities in final stages

• Wind Power, Cape Verde
• 30MW wind power project c. 60m capital cost
• Replaces substantial portion of current diesel
  generation with lower cost, clean energy
• PPA term-sheet agreed with power utility, Electra
• Wind turbines procurement process underway
• Strong investor interest from banks and
  multilateral institutions

InfraCo business model is working. gt20 invested
by private sector for every 1 invested by InfraCo
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Implications of the financial crisis

• The global economic and financial crisis is
  having a major adverse impact on private sector
  infrastructure investment in low-income
  developing countries
• Cyclical downturn in investor appetite for
  greenfield infrastructure assets in small
  developing countries and in greenfield situations
  in particular.
• Longer Term Reduction in the availability, and a
  sharp increase in the real cost of debt. There is
  a related significant increase in the real cost
  of public and private equity and a reduction in
  availability of equity for Greenfield
  investments.

Even more need for InfraCo and other
donor-supported facilities to promote
commercially viable projects
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InfraCo A successful new approach to developing
infrastructureQuestions... ?

Valentine ChitaluDirector, InfraCo