Thursday, December 5, 2013

Investing in Africa's regional infrastructure

James Leigland at GEGAfrica: Discussions in Group of 20 (G-20) meetings over the last several years have increasingly focused on the need for a huge scale-up in infrastructure investments in developing countries, particularly through large regional projects involving private sector participation.

The G-20 is reportedly considering a modification of the mandates of national (DFIs) and international development banks (MDBs) so that these institutions will be better incentivized to take on such “transformational” projects. A particular focus of the G-20 is the need for cross-border projects in sub-Saharan Africa (SSA), where large regional hydropower projects, for example, could generate power for a number of countries, if conducted on a regional, rather than national basis.

But tackling such projects, with ‘the potential to have a transformational regional impact,’ will involve much more than mandate changes. SSA’s regional institutions, supported by MDBs and regional DFIs, have a long history of trying to identify and develop such projects, but only a handful of such projects have ever been successful. As the G-20 now tries to encourage greater attention to such projects, it is worthwhile keeping in mind the huge challenges that have severely constrained this work in the past.

The key challenge posed by such projects is that they are radically different from typical, national-level infrastructure projects that might attract private sector participation.

Inga III, a huge hydropower project planned for the Congo River Basin in the Democratic Republic of Congo (DRC), is a good example of these differences. Inga III tops almost every list of transformational projects in SSA because of its potential to generate power that could be exported to countries as far away as South Africa and Nigeria. But after more than a decade of international planning and negotiations, Inga III has made very little progress, while project costs have been escalating precipitously....

1 comment:

Mbuanza said...

This is particularly relevant to Angola, as it holds huge hydro potential, and somewhere around 12% of Africa's fluvial water resources.