From a strategic point of view, the Bank places strong emphasis on infrastructure and PPPs as intervention instrument to overcome the bottlenecks that have hampered developing countries' ability to attract foreign direct investments (FDI). In this perspective, the Bank intends to scale up infrastructure financing by leveraging its financial resources. The scaling-up will include PPPs as an intervention instrument to leverage additional resources from the private sector and improve risk transfer to the parties that are better equipped to deal with it.
The Bank's Private Sector Development Strategy 2004-2007 and its subsequent update 2008-2012 introduced PPPs as an instrument for Bank operations. The New Partnership for African Development's (NEPAD) Infrastructure Project Preparation Facility (IPPF) established by the Bank in 2005 equally offered another stimulus for PPPs in Africa. More recently, the Bank's new Private Sector Development Strategy 2013-2017 highlighted PPPs as key intervention instruments. Also, the Bank Governance Strategy and Action plan document stressed the strengthening of PPP policy, legislation and regulatory frameworks for infrastructure development as a work-stream for its Governance pillars while improving the policy, legal and regulatory frameworks for Business Enabling Environment (e.g investment codes and tax regimes), of PPPs, including the analytical capacity for PPPs selection, preparation, monitoring and evaluation.
Similarly, the Bank developed an operational framework for the participation of the private sector in funding the infrastructure investments (as PPIs or PPPs) in conjunction with its private sector development strategy, where PPPs figure prominently. At present, three PPP hubs are managed by the Bank and are located in Pretoria for Southern Africa, Nairobi for Eastern Africa and Abuja for the Western part of Africa. The Bank Group Industrialization Strategy for Africa, approved in April 2016 as one of the Bank's High-Fives, intends to manage up to thirty (30) hubs across the continent.
During the period under review (2006 - 2016), the Bank's PPP portfolio consisted initially of 39 projects, totaling USD 2.4 billion. However, the stocktaking exercise identified only 33 projects, representing a total financing from the Bank of USD 1.87 billion (or UA 1.45 billion) as being PPP-structured operations, with contractual obligations between the public and private parties for the provision of infrastructure services. Further analysis as part of the Inception phase of the evaluation identified 32 PPP operations for the 2006-16 period, of which the private sector and public sector windows of the Bank respectively financed 29 and three (3).
The Bank commitments for these PPP projects represent 12% of its total net commitments for reviewed the period. This percentage varies across the African regions with a concentration in the North region, representing 27% of the total PPP commitments during the period. The sectorial distribution of the Bank's PPP portfolio shows a strong concentration in the power sector, which represents 63% of the Banks PPP net commitments over the covered period. The transport sector follows with ten (10) PPP projects approved, totaling UA 446.7million. The total Bank commitments for PPP were unequally distributed across the years with an average yearly commitment of UA 142 million. This very low level of PPP financing when compared to the Bank's total annual financing for the same period confirms the need for a concerted effort to boost PPP infrastructure project development and financing to help close the infrastructure gap in Africa as committed in the High Fives and the Ten-Year Strategy.
On the enabling environment side, the Bank financed Eighteen (18) PPP-related Institutional Support Projects (ISPs) in 15 countries. The bulk of the PPP-related ISPs was for the creation of the PPP legal and regulatory framework and the development of PPP Units (77% of net amounts), while only few (1.4%) were allocated to operationalizing the PPP Dialogue platform. Nevertheless, the development of the PPP policy framework represent the third of the total ISP numbers but only 17.7% of the total net approval amounts (with an average of UA11,4 million per project). In addition to these PPP-related ISP projects, the Bank has funded technical assistance for PPP projects via the FAPA fund as well as a loan to build capacity for PPP infrastructure.