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WATER . ENERGY . ICT & TELECOMS . TRANSPORT . FINANCE

9 – 10 June 2016 Sandton Convention Centre • Johannesburg, South Africa

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AFRICAN INCLUSIVE INFRASTRUCTURE FORUMHosted by

CONFERENCEPROCEEDINGS

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CONFERENCE PROCEEDINGS . 9 – 10 JUNE 2016

TABLE OF CONTENTS

Acronyms and Abbreviations used throughout the conference 3

DAY 1: 09 JUNE 2016 4

Plenary 1: Welcome Keynote Address 4

Plenary 2 Keynote Address 6

Plenary 3 Address 8

Plenary Panel 1 The Ministers Debate: Regional Integration & Gender 10

Panel 2 Financing Infrastructure Development in Africa 12

Panel 3 Assessing Risks versus Opportunities of Investing in Africa 14

Panel 4 Energy Solutions for All: Alternative Energy for Households 16

Panel 5 Project Bankability 20

Panel 6 African Leadership & Talent Development 22

Panel 7 Development Partners: Complementary Approaches to Inclusive Infrastructure 24

DAY 2: 10 JUNE 2016 27

Panel 8 Regional Project Development 27

Panel 9 ICT & Telecommunications – The Growth in Connectivity in Africa 29

Panel 10 Getting the Framework Right: Policies and Regulations for Inclusive Infrastructure 31

Panel 11 Invest in the Energy Continent 34

Panel 12 The Development of Transport Infrastructure 35

Panel 13 Maximising Opportunities, Meeting Needs:

The Private Sector in Delivering the Gender Dividend in Infrastructure 37

Panel 14 Agriculture and Trans-boundary Water Projects in Africa 39

Panel 15 Investment in African Infrastructure 41

Panel 16 Skills Development for More Inclusive Infrastructure 43

Plenary Panel 2 Where is African Infrastructure Development Heading? 46

Closing Keynote Address 49

Closing Remarks 50

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ACRONYMS AND ABBREVIATIONS USED THROUGHOUT THE CONFERENCE

AAFAWA Affirmative Action Fund for WomenADB African Development BankAU African UnionCAD Fund China Africa Development Fund CBO Community based organisationsCDB China Development Bank CODESRIA Council for the Development of Social Science Research in Africa COIDIC China Overseas Infrastructure Development and Investment CorporationCOMESA Common Market for Eastern and Southern Africa COP 21 2015 Paris Climate Conference DBSA Development Bank of Southern AfricaDFI(s) Development Finance Institution(s) DFID UK Department for International DevelopmentEAC East Africa CommunityEADB East African Development BankECOWAS Economic Community of West African StatesECREE ECOWAS Centre for Renewable Energy and Energy Efficiency GDP Gross domestic product GIZ Deutsche Gesellschaft für Internationale ZusammenarbeitGTZ Deutsche Gesellschaft für Technische Zusammenarbeit, now GIZGW GigawattsHFO Heavy fuel oil (sometimes referred to as ’Residual Fuel Oil’) ICT Information and Communication TechnologyIDZs Industrial Development ZonesILO International Labour Organization JICA Japanese International Cooperation AgencyJSE Johannesburg Stock Exchange kWh Kilowatt hourMOU Memorandum of understandingNDC National Debt ConnectionNDP National Development Plan NEPAD New Partnership for Africa’s Development OEM Original Equipment ManufacturerPIDA Programme for Infrastructure Development in AfricaPMAESA Port Management Association of Eastern and Southern AfricaPPP Public-Private Partnership PTA The Eastern and Southern African Trade and Development BankS.M.A.R.T. Safe, Mobile, Automated, Real Time traffic managementSA South Africa SACBTA Southern Africa Cross Border Traders Association SADC Southern African Development Community SARETEC South African Renewable Energy Technology Centre, Cape Peninsula University of Technology SDGs Sustainable Development GoalsSME(s) Small and Medium-sized Enterprise(s)Terrawatt TWUN United Nations UNECA United Nations Economic Commission for Africa WEISED2020 Women in Entrepreneurship, Infrastructure and Sustainable Energy Development

WomEng Women in Engineering

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DAY 1: 09 JUNE 2016

PLENARY 1: WELCOME KEYNOTE ADDRESS

SPEAKER: Geraldine Fraser Moleketi, African Development Bank Group

The African Development Bank (ADB) is proud to be a co-sponsor of this year’s Infrastructure Africa Conference, which has proven to be an important infrastructure event for Africa. What is striking this year is the landmark combination of infrastructure development in Africa and inclusivity. Inclusive infrastructure is the Africa Development Bank’s call to infrastructure investment that will pay special attention to the many people, particularly women and girls who are the living infrastructure in many parts of Africa.

Infrastructure in Africa is a critical element of any African or global economic strategy. Infrastructure affects the competitiveness of any business in any country. It is the bedrock of a country’s prosperity. It determines the supply of water and power in homes, how workers can travel to their workplaces, and facilitates trades in cities and how factories function in their processes. If Africa’s infrastructure is second rate, then Africa will be second rate as well.

Why the focus on inclusivity in infrastructure development? There is the scale of the infrastructure gap in Africa, and the need for investment across the continent to close this gap. The Africa Development Bank is leading efforts to get such investment and facilitate the substantial involvement of the private sector in closing this gap. Much of the discussion of closing the infrastructure gap has focused on large scale infrastructure developed around regional corridors and ports, power stations and sub-stations and telecommunications.

These are vital and critical to the development of African economies; however, the benefits of such infrastructure investments are not evenly felt, particularly in all sectors of the economy, and sections of society. Many people particularly women and girl children, are acting as living infrastructure in many parts of Africa, not only because of the lack of infrastructure investment but also because of the priorities made around the kind of infrastructure that should be supported and how accessible these are. Greater focus must be placed on large power plants in order to ensure the increased availability of power; but if only 19% of the population have access to electricity connections then the majority will not gain from the benefit extra power can bring – in terms of the time saved, the economic opportunities available and health benefits.

Instead, these power gains will be captured easily by the rich and the urban households, the small proportion of businesses and multinational businesses in power hungry sectors such as mining. It is estimated that 85% of the population depends on women and girl children who spend up to two hours per day collecting firewood, and absorbing the pollution created by indoor fires for cooking and heating houses.

There are substantial efforts being made to make entrepreneurs realise the renewable energy resources that Africa has. The constraints that women entrepreneurs face in getting start-up loans from the bank and setting up businesses needs to be addressed, if the continent is not going to lose the entrepreneurial potential of half the population.

Sustained focus must be placed on investment in major regional road corridors, e.g. the North - South corridor from Durban to Lusaka, that brings economic benefits especially to landlocked nations like Zambia. However, according to UN Women around 70% of people engaged in cross-border trade in Southern Africa are women. However they trade in amounts that are too small to hire a truck or container, and have to wait hours for transport that travels when there are enough passengers.

Visa issues with regard to cross-border trade need to be addressed if regional integration is to become a reality. Currently, work is going on that involves the ADB, the African Union, the United Nations Economic Commission for Africa (UNECA)

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and others in looking at the facilitation of the movement of goods and people across border in Africa. In this respect, the East African Community deserves to be applauded for relaxing cross-border visa restrictions in their region.

The rise in mobile telecommunications across Africa and the increase in internet access on the continent must be celebrated, along with the usage of MPESA that has become a household name in Africa. However, greater effort in terms of private sector investment is needed in connecting landlocked countries, in order to harness the benefits of fast internet. Despite the increases in internet access in Africa, many rural areas still lack reliable internet connectivity. As a consequence, the many benefits that the internet can bring in terms of education and service delivery are not harnessed due to lack of incentives.

Moving forward, there is the need to scale up and deliver infrastructure in accordance to the UN’s Sustainable Development Goals. The ADB as of the end of 2015 had financed 114 infrastructure projects across 44 countries worth USD11 billion. Multinational projects (currently 40%) contribute increasingly to the ADB portfolio. The ADB has also invested in 26 one stop border posts that reduce the cross-border processing time from one day to just five hours. In addition, the ADB’s mandate on green and inclusive growth considers the economic effect of its projects, and tries to ensure that women and marginalised groups reap the benefits of the ADB’s projects.

Projects such as the hydro-electric power dam Kariba, the ICT project of the West Africa cable system, and the regional connectivity of the Tanzam railway all point to the realisation of the bricks and mortar Pan African ideal. These projects impacted heavily on the lives of people in those countries. New infrastructure, such as the Trans–Saharan railroad, the Djibouti to Dakar highway, and the Gambia River Basin project all promise growth. While Africa’s economic growth has been impressive over the past five years or so- it has done so with inequality. The challenge of infrastructure development in Africa is not only to deliver growth, but to contribute to greater equality. As such, the right policy choices need to be made to deliver infrastructure that ensures that everyone will benefit from the economic growth that accrues from infrastructure development in Africa.

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PLENARY 2 KEYNOTE ADDRESS

SPEAKER: Tas Anvaripour, The Abraaj Group

The Africa Development Bank Study that states that USD93 billion per year is needed to develop infrastructure in Africa, is outdated. There are new infrastructure investments being added-and this number does not include renovation and the upgrade of the infrastructure on the continent. A closer look at the USD93 billion figure – reveals that USD30 billion of this USD93 billion comes from governments; USD9 billion comes from the private sector and USD6 billion comes from development finance institutions (DFIs).

The shortfall of USD48 billion, of infrastructure funding can be attributed to possibly not being able to use the available limited capital efficiently and correctly and the inability to develop and finance bankable projects. In fact, there is no lack of financing for infrastructure projects. Over 50 public-private partnership (PPP) infrastructure projects are financed from the equity side and the debt side as well. As such, financing is not a problem and in fact, there are not enough infrastructure projects to be financed.

How then can roles and responsibilities be shared to hasten infrastructure delivery? How can available capital be deployed in an efficient way for infrastructure projects?

For this purpose, three different groups for infrastructure assets need to be created. There are projects that cannot be financed by the private sector, such as rural roads and social infrastructure. These are projects that governments must finance, and should use borrowing limits to finance these projects. A further class of projects that can be turned into PPPs are revenue generating projects. These PPP projects can benefit from the expertise and the financial muscle of the private sector. Rather than governments borrowing funds for power plants, such projects can be given to the private sector.

With regard to road infrastructure, certain kinds or parts of roads cannot be turned into PPPs. However, certain kilometres of roads where the traffic is high can be turned into PPPs. PPPs can help generate revenue for governments. As such, governments will not only borrow against these projects, but they will generate revenues as well.

Another class that is widely used in the world is the ‘availability payment’ model, where transmission lines, roads, government buildings, bridges, social buildings and schools are built. In this model, the private sector finances, builds even maintains these amenities and rents them to the governments on the availability of 25 years or 30 year leases based on the size of the asset. These are projects that government does not invest in or has limited budget or borrowing limits into these projects. Looking at these three different infrastructure asset groups, the inescapable conclusion is that partnerships are essential in using the limited capital available in order to deliver infrastructure projects in Africa.

How can capital be deployed in the most efficient way?

Firstly, it is better for governments not to showcase a number of projects to investors, but rather focus on a few projects in order to attract and convince private sector investment. It is also advantageous to use the available grant facilities to do pre-feasibility studies which can create the investment appetite for investors. Once the project reaches the financial close, whoever closes the project must be paid back the grant which can be revolved and used for other pre-feasibility studies.

Secondly, it is crucial to minimise the investments used in non-revenue – generating projects and rather borrow finances for such projects. Borrowing limits should not be used for infrastructure projects where the private sector is involved. Instead, the availability model can be used for infrastructure projects as is the case in Turkey and the United States where courthouses, prisons and bridges are financed by the private sector, and are rented back to governments. The private sector builds and rents to government for 35 years. It is highly strategic to leave the revenue making projects to the private sector; the private sector can build maintain and create revenues for governments.

PPPs are a highly preferable alternative to tenders, and in this regard, open book negotiations are better than tenders since

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the process of awarding tenders is a time consuming process and infrastructure cannot be delivered in a timely manner. In such matters, DFIs are important partners that assist in providing grant facilities to governments. These Institutions conduct pre-feasibility studies for infrastructure projects in order to make them bankable and commercially viable for private sector investment.

It is important to set up key legal and regulatory frameworks that create an investor friendly climate in Africa, with regard to investment laws, PPP laws, forex convertibility laws; dividend repatriation, etc., DFIs can assist African governments to set up such legal and regulatory frameworks. It is also important to provide support through partial risk guarantees to de-risk the projects, but also provide support to commercial lenders through partial credit guarantees. This helps them lower their risk and increases the tenor of the loans they can provide. BASEL III banking requirements restrict the ability of commercial banks to provide long term 15–20 year loans for infrastructure projects.

It is also essential to provide funding for government for associated PPP social costs, such as ‘viability gap funding’ that caters for the resettlement of displaced people and others. This has been done in the past and should continue as in the case of Dakar, Senegal, where the government resettled 20 000 people, with the aid of the ADB.

Guarantees given by governments should be reconsidered. Currently the total amount given in a guarantee, such as on Power Purchase Agreement, is considered 100% debt and forms a large portion of the borrowing limits of governments. When institutions such as the World Bank provide partial risk guarantees, they only put 20% of these on their books. Why can these not be offered to African governments? If an investor wants to put invest in a power plant with 1000 MW capacity, the investment will not materialise simply because the government will not be able to provide the potential investor with the Power Purchase Agreement guarantee, which is part of its borrowing limits.

Equally, support must be provided to the new generation of DFIs in Africa such as The Eastern and Southern African Trade and Development Bank (known as the PTA), Africa Finance Corporation and AfriExim, which were created and supported by the ADB and are well-suited to dealing with African needs. Africa50 must be supported as a brainchild of the ADB. The ADB should continue to support Africa50 because a large number of investors are waiting for this programme to become operational. Support should also e given to African governments in developing their local capital markets.

With regard to investing in infrastructure, the private sector and private investors must take early risk. Instead of waiting for Africa to be de-risked, the private sector should start taking the risk by providing much needed equity. This is because in most cases when the infrastructure projects reach bankability, they wait for another two years for the equity to come in. In this case, it is highly strategic to form partnerships that have complementary skill sets for operational efficiency, with parties such as insurance providers, with export credit agencies, equipment providers and alternative financiers. There is no need to sit and wait; the private sector has to create its own options.

Abraaj Developments Group a major global infrastructure investment player invests into energy projects in Africa, and has mustered an Africa Fund of USD990 billion. Abraaj Development Group understands that investing in infrastructure projects through equity financing requires getting totally involved throughout the project life cycle. The Abraaj Group is currently developing 1 700 MW of energy projects in Africa, using development capital that is pulled from its balance sheet. These projects will be offered to private equity companies that will provide much needed equity. This deals with two problems: the provision of risk capital and the attraction of equity investment from private capital.

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PLENARY 3 ADDRESS

SPEAKER: Dr Elham Mahmood Ahmed Ibrahim, African Union Commission

Infrastructure development in Africa requires increases in engagement via partnership with the private sector in infrastructure investment. Several analyses conducted by the AU, ADB and the New partnership for Africa’s Development (NEPAD) Planning & Coordinating Agency, highlight the inadequate and fragmented ICT, energy, transport and water energy infrastructure systems of Africa that are constraints to Africa’s competitiveness and development.

Africa’s economic development depends on adequate and functional infrastructure. Inadequate infrastructure hampers inter-regional trade and cripples national industrial and manufacturing output. It is impossible to attract significant investment to Africa without infrastructure. The time has come to treat infrastructure investment as a business and not a social issue in Africa.

The AU Agenda 2063 is divided into a series of 10 year plans. The first 10 Year Plan of Agenda 2063 has already been adopted and the infrastructure development is one of its major enabling aspects. Under Agenda 2063, the Programme for Infrastructure Development in Africa (PIDA), of which the Priority Action Plan 2020 has been put in place for inter-regional transport, energy, water and ICT infrastructure, involves the joint effort of the AU, the ADB, the NEPAD Planning and Coordination Agency and other stakeholders. This programme has more than 400 infrastructure projects that have gone through preparatory phases and are ready for investment.

With regard to the transport sector, air transport has grown strongly in Africa in recent years and has seen the growth of numerous private air fleet services that have helped boost exports and imports. Special efforts by the AU are underway to create a single African air transport market. In the last two decades, the number of cargo ships passing through Africa’s ports has burgeoned considerably; this growth will require additional investments especially from the private sector in developing ports infrastructure.

Furthermore, great progress has been made in establishing road networks in Africa, with the development of corridors and institutions to manage these roads. However, Africa’s rural areas are still not well served with rural road networks. It is estimated that 70% of the African population still resides in rural areas, where the road conditions are deplorable and cannot be used to transport crops, largely harvested by women.

The energy sector has a key role to play in the economic and social development of African countries, as recently stated in the UN Sustainable Development Goals (SDGs). The SDG’s stress that without energy, there cannot be any real economic development in Africa, yet more than 600 million people in Africa lack access to energy. Fortunately, Africa has enormous renewable energy sources, such as 12% of the world’s technically feasible hydroelectric power that that can generate 1 800 terawatt (TW) years of electricity; geothermal power potential found in Rift Valley countries that can generate 20 000 MW, as well as abundant wind and solar energy found across all regions of Africa.

The Africa Renewable Energy Initiative, that is envisaged to generate close to three gigawatts (GWs) of renewable energy by 2030, is expected to attract big private sector investment. It is crucial to mitigate the risks of renewable energy through sources such as the AU Commission’s Geothermal Risk Mitigation Facility. To date, this facility has USD140 million from partnerships with Germany, the United Kingdom, and the Infrastructure Trust Fund from the European Union. On June 14, 2016, the AU will launch the fourth round of applications for this project. Currently, there are 16 geothermal projects supported by this facility, which is open for all geothermal projects, especially for service studies and drilling confirmation wells, the latter which are the riskiest stages of these projects.

Africa also has huge hydrological resources, with variable characteristics that call for variable water management systems. Even though Africa has ample water resources, there is need for management of water systems, in terms of investing in these systems to ensure water availability where and when it is needed. Water infrastructure investment projects

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are attracting many foreign companies, who are eager to partner with local companies and utilities to develop water collection, purification and distribution projects worth billions of dollars. The last area is ICT; infrastructure based on the mobile revolution has brought the ICT revolution into Africa. The increasing use of mobile phones has become an essential part of our daily lives and has increased the role of communication of market information in cities and urban areas.

Women are part of a slowly growing pool of experts, engineers, financiers and business people engaged in infrastructure development that is making a difference in Africa’s development. There is need for infrastructure programmes that emphasise equal participation of women and men.

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PLENARY PANEL 1 THE MINISTERS’ DEBATE: REGIONAL INTEGRATION & GENDER

MODERATOR: Geraldine Fraser Moleketi, African Development Bank GroupPANEL MEMBERS: H.E. John Byabagambi, Republic of Uganda H.E. Mamadou Hachim Koumare, Republic of Mali Abdallah Hamdok, UNECA Tas Anvaripour, The Abraaj Group H.E. Dr Elham Mahmood Ahmed Ibrahim, African Union Commission

KEY QUESTIONS:• What are the key success factors for infrastructure development?• What successful models exist in Africa and that can be replicated?• What is the role of women in driving issues of development and equity in Africa?• Do mechanisms and instruments exist that allow for better regional integration?

KEY POINTS:• Regional integration and co-operation are key to ensuring the development of infrastructure in Africa• Projects require political will and co-operation between all levels of government in order to succeed• Regional infrastructure projects require efforts at the national level to drive them forward• There are a number of ways in which regional integration can be supported, including through technology, institutions

and political initiatives

SYNOPSIS:Regional integration is of supreme importance for the development of infrastructure in Africa. Infrastructure development in Africa requires the operation of partnerships, at project level, between countries. A good example of this is the successful project preparation of the East African regional 2400 km railway project worth USD22 billion envisaged to run from Mombasa to Kigali. The business plan for this project was completed in just four months.

Another good example of the cooperation between countries in regional projects is the development of the Northern Corridor in East Africa. The Northern Corridor programme is coordinated from the Presidential level, and cascades to the Ministerial and the directors’ level down to the bottom level. Regional integration in the case of the Northern Corridor Project is driven by political will, which is a crucial factor. In addition, there are quarterly meetings at the Presidential level and Ministerial monthly meetings of people working at the project level. At these meetings – every single project under the Corridor aegis is discussed. It is such meetings that led to the scrapping of border and visa controls across East African countries, to allow the untrammelled flow of people and goods between countries and across these borders.

Cooperation among the East Africa Community (EAC) member countries and the political will of the leaders of Uganda, Kenya, Rwanda, Tanzania and Burundi, has resulted into the abolition of border controls and visa restriction, to facilitate the seamless flow of goods and people across borders. In addition, it has resulted in the introduction of one tourist visa for all countries in the East African Community.

Furthermore, a one network system has been introduced in East Africa where there is one common phone charge throughout the region. As such, there are no roaming charges in East Africa, which has significantly brought down the price of voice and data in East Africa and has served to promote trade with cheaper communication costs. The East African Standard Gauge Railway Project that currently passes through Nairobi and Naivasha to Uganda’s border, has been driven from the top and is a stellar example of the value of quick decision-making and strong protocols between countries.

In addition to the Railway Project, there are several hydro-electric power projects being developed in East Africa in Uganda and Ethiopia. The decision has been made to interconnect all Northern Corridor infrastructure projects in the EAC, with the help of the French Development Bank, the ADB and other banks.

Gender issues are integral parts of government business and corporate governance. Policy requires that one-third of company boards in Uganda must be women. In the National Parliament, it is a prerequisite that every district has a woman

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representative. Women also head key infrastructure agency positions in Uganda.

As in East Africa, leadership and political will are instrumental in driving infrastructure projects forward in West Africa. Security concerns have accelerated regional integration in West Africa, with regard to the construction of road and rail networks across the region. In this respect, attention has been paid to developing roads that open up remote areas in the interior, which have development potential. Regional integration facilitates the free movement of people and goods across borders in West Africa.

The West Africa region has one Identity Document that is used by all peoples resident in the Economic Community of West African States (ECOWAS) countries, and there is even one common driver’s license for the entire West African region. The AU and other institutions have played a key role in realising regional integration in West Africa and are continuing to do so.

The Trans-West Africa Coastal Highway, which is an AU, ECOWAS and NEPAD project, is funded by the African Development Bank and is a key regional integration initiative. It is expected to link 12 West African coastal countries and will yield significant economic benefits. Political will has been instrumental in driving key ECOWAS regional infrastructure projects such as the new railway network that links Benin, Burkina Faso, Ivory Coast, Ghana, Niger and Togo. Regional infrastructure projects require efforts at the national level to drive them forward. Although they are regional projects, they require sufficient national and political will to push them forward.

The AU plan for the African Free Trade Continental Area, expected to start in 2017, can only be realised with infrastructure that connects the whole of Africa. Regional infrastructure is key essential to the realisation of this grand project. Political will and leadership at the regional and continental level will be crucial in the realisation of this grand initiative.

The relaxation of border controls and use of one visa in the facilitation of goods and people, is important for strengthening regional integration. This is the case in the EAC and ECOWAS, where one common regional visa is used between member states. The AU intends to extend the usage of its African passport to all Minsters of Foreign Affairs in Africa, as well as the African Heads of State.

Regional integration is also needed to harness the resource potential Africa possesses. Energy, road, and ICT infrastructure among others is a necessity for regional integration. The AU is planning to create Regional Internet Access Exchange points/hubs to facilitate the seamless flow of internet traffic regionally, which will save time and lower communication costs between countries in regions.

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PANEL 2 FINANCING INFRASTRUCTURE DEVELOPMENT IN AFRICA

MODERATOR: Coenraad Bezuidenhout, FTI Consulting PANEL MEMBERS: Rajen Pillay, Garuda Finance David Renwick, Barclays Africa Peter van den Dool, OPIC Admassu Tadesse, PTA Bank

KEY QUESTIONS:• How are Africa’s regional DFIs funding infrastructure projects?• What different roles do banks play in financing infrastructure projects in Africa? • Who are the emerging financiers in Africa and what does this mean for domestic and African capital financiers who

want to invest across borders? • What funding options for infrastructure projects are feasible in Africa given the waning appetite for dollar currency

based funding?

KEY POINTS:• Development Finance Institutions (DFIs) are indispensable players in the infrastructure investment space in Africa• Local and regional banks are becoming key players in infrastructure project financing in Africa • Using local currency to fund infrastructure projects as opposed to dollar based funding is the cheapest option available

for financing infrastructure projects in Africa.

SYNOPSIS: Development Financial Institutions (DFIs) play a strategic role in unlocking financing for infrastructure projects. In this regard, they help in closing the infrastructure-financing gap, and also act as ‘enablers’ that catalyse processes for other funders to invest. The present day situation in Africa with regard to the infrastructure financing climate is the best ever in Africa’s history. This is because governments have funds to finance projects and the availability of commercial capital on the continent.

However, upstream issues and challenges, such as the lack of adequate project preparation, continue to bedevil infrastructure financing. Special initiatives developed by DFIs, such as project preparation funding, have been crafted to deal with such issues. DFIs also provide risk capital. With regard to downstream issues, the creditworthiness of utilities, among other issues, continues to be a big issue. The other ‘classical issues’ that have always been a challenge to infrastructure delivery and investment in Africa are still present. Moreover, there are many opportunities of infrastructure development that are not yet convertible due to the presence of these issues.

PPP units and the ministries that regulate them in Africa do not always have the necessary capacity. These are some of the risks that DFIs face, alongside other financiers and investors. Risk capital still continues to be an issue, even when the feasibility studies have been done and all the preparatory work is completed. There is not enough risk capital to act as a bedrock and attract finances into the fund infrastructure projects in Africa.

Banks play two roles in infrastructure development in Africa: Firstly, by balancing sheets of infrastructure projects in Africa; and secondly, by raising money through capital markets. With regard to balancing sheets of infrastructure projects in Africa, the present economic downturn in emerging markets has lessened the commitment of banks to financing infrastructure projects in Africa. At the same time, there is a growing trend amongst local and regional banks to become more active in funding infrastructure development projects in Africa. However, these institutions are also starting to feel the pressures of the emerging markets economic downturn. This has resulted in the tightening of credit policy and the restriction of credit processes by these banks.

Banks can raise money for infrastructure projects through debt capital markets processes, and in this respect dollar liquidity for funding infrastructure projects has become more expensive. As a consequence, a number of projects have become over-exposed to hard currency in terms of funding. In the past five years, several African currencies have depreciated

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considerably against the dollar, and as a result, many infrastructure projects face challenges in terms of loan repayment in dollars, which were used to finance these projects.

The waning use of dollar funding for projects presents an opportunity for banks. Banks can attempt to harness the wealth opportunities available in Africa in terms of asset management and insurance companies in local currencies in countries across the continent. Local asset managers or life insurance companies need to match assets and liabilities in local currency in order to fund infrastructure projects. This is particularly the case for those long dated infrastructure projects, which have received solid cash flows in local currency. The local currency asset base, which is developing in the insurance and asset management sectors across Africa, can be harnessed to fund infrastructure projects.

Tapping into local pension funds and local monies, is the cheapest option to fund projects. On the other hand, dollar based funding can be used in two main ways, without the grave fears that people have. Firstly, it is advantageous for companies that are borrowing in dollars, to possess a rand hedge especially where the company is looking for finance in dollar-loans and dollar borrowings. Under such conditions, export policies or export proceeds can be used to offset. This is one of the best methods of hedging, as other instruments are very expensive, especially in the short to long term.

Dollar lending can also be viable in infrastructure projects with ‘monopoly pricing power’. If capital costs run away because of currency depreciation, it will be a matter of time before prices can be adjusted upwards. If a project has monopoly pricing power in a particular sector or geographical area, this kind of pricing can recover the increases in capital costs, by passing those costs on to consumers. As such, the projects do not have to collapse. These are two areas people do not pay attention to, that can provide some kind of benefit.

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PANEL 3 ASSESSING RISKS VERSUS OPPORTUNITIES OF INVESTING IN AFRICA

MODERATOR: Muzi Kubeka, Norton Rose FulbrightPANEL MEMBERS: TapiwaDube, IDC Gaurav Nair, Jaltech Robert Appelbaum, Webber Wentzel Jonathan First, Development Bank of Southern Africa Raldu Nel, Blank Canvas International

KEY QUESTIONS:• What are the current infrastructure opportunities on the African continent?• What are the associated risks of investing in infrastructure in Africa?• Which African countries have the greatest opportunities?• How can African institutions, governments and public sector players, work together to better market the opportunities

on the continent?

KEY POINTS:• Africa needs to recognise its enormous wealth, both in terms of mineral resources and population• There are significant challenges to developing infrastructure in Africa, including political risks and concerns around

currency exchanges• There are a number of options and ways of addressing the challenges including support from the IDC and DBSA

SYNOPSIS:With a third of the world’s minerals in Africa, a tenth of oil reserves, two thirds of the world’s diamonds, together with a prediction that it will have the largest population of any continent by 2050, Africa needs to recognize that it is a very wealthy continent and it has enormous potential in terms of consumer base. There are also huge risks associated with investing in Africa, and investor appetite is fuelled by a shared a vision of a United States of Africa, where countries collaborate and trade freely with one another

Demand for infrastructure in Africa has been underestimated. Currently those wishing to ensure investment in Africa need to look at what the continent has; what is needed and how that can be leveraged. However without infrastructure, it is very difficult. The funding for projects is sometimes available, but sometimes the keys for unlocking the projects cannot be found.

There are a few challenges that potential investors face when looking at risk and opportunities in Africa. The first is the operating environment: in order to make the operating environment more enabling, it is necessary to look at the political risks, and to simplify procurement legislation and related processes. In some places, it is over-engineered and fragmented, in others it is very vague and sometimes it is only good at face value which only becomes apparent when the project commences. The continent needs to capacitate institutions and governments, to produce the correct forms of legislation and to implement and monitor them correctly. It is also important that projects are procured properly to avoid contentions down the line.

The second challenge is the high costs attached to infrastructure projects, which for investors is the availability and convertibility of currency. Getting dollars out of the country is an overriding concern for investors. Another challenge is that the debt and equity is in foreign currency, while the off-take is in local currency. Investors are also concerned about money that gets held in countries due to undisclosed or unforeseen charges and taxes, which often results in financial losses.

Thorough upfront due diligence is critical for projects to succeed. There is a wide spectrum of tools available for mitigating risk. Those wishing to invest in Africa should be aware of the tools available, but should also note that each situation requires fresh thinking on how to deploy those tools.

Environmental, social and compliance aspects in infrastructure projects have been neglected, but that is where the opportunities lie for Africa. Sustainable operations need to be considered in the early stages of project development.

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Other types of investment that need to happen in Africa are investments around technology, innovation and research, as well as skills development.

There are ways of addressing some of these challenges that include getting assistance from the Development Bank of Southern Africa (DBSA). The DBSA has a project preparation group that is funded from grant money. They take projects that have potential, undertake a feasibility study and then decide if it can be turned into a bankable project. When the project is deemed bankable, it puts the developer in a position to get equity.

The Industrial Development Corporation (IDC) also offers support through funding. Their funding comes in two phases: there is the development phase in which the investor has to decide on the structure of the finance deal and the viability of the project, and it is at this point that the idea is evaluated for bankability. The IDC provides funding for this, after which there is a financial clause phase, where all permits are put in place and other shareholders, major equity players, as well as debt players/funders, can come on board. At the financial clause phase, the project developers get a premium and can roll that money into equity, or take the money and allow the project to proceed.

There are also a wide range of financiers with different risk appetites and entrepreneurs need to leverage off the tools available.

Opportunities are still available in the South African renewable energy programme. The only risks are the failure of the South African government, and some project risk in terms of the delivery of power from the project to Eskom’s transmission or grid. However, it should be recognized that opportunities are not only in major infrastructure projects. There are other areas to invest in. Investors and the sector need to look at the net positive impact of projects, to determine which projects are priorities for Africa.

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PANEL 4 ENERGY SOLUTIONS FOR ALL: ALTERNATIVE ENERGY FOR HOUSEHOLDS

MODERATOR: Sheila Oparoacha, Energia PANEL MEMBERS: Cynthia van der Hoeven, Marida Vivek Mittal, Millennium Resource Strategies Ibrahim Sory Sylla, Carbon Guinea Mary Chege, Development Finance International (DFI) Anne Githuku-Shangwe, UN Women Janade Du Plessis, African Development Bank (ADB)

KEY QUESTIONS:• What are examples of best practices of gender-aware household energy access policies or projects?• What mechanisms can ensure that women’s inputs are considered in designing and implementing energy policies and

projects for household access?• What delivery models are able to properly serve the energy needs of women, for both electricity and cooking?• What methods can be used to advocate for innovative targeted policies to support women’s access, productive uses of

energy and economic empowerment in the household energy sector?

KEY POINTS:• The African Development Bank (ADB) has initiated a “New Deal for Energy for Africa”, by which universal power and

electricity should achieve 100% of all urban areas and 95% of all rural areas by 2025• The ADB has included a gender inclusive requirement for all its projects and has launched a fund to finance women

entrepreneurs• There is a need to move from technology-driven infrastructure development to “citizen-centric”-driven development• It is critical to bring a gender perspective to energy• African households spend a lot on non-renewable energy; there are thus resources that can be tapped into to develop

more sustainable energy sources.

SYNOPSIS: The African Development Bank (ADB) has a ten-year strategy, and energy is a very important aspect of that strategy. Recently, the strategy was defined into five key priorities that the Bank is working towards, the most important of which is “Light Up and Power Africa”. The others are “Feed Africa”, “Integrate Africa”, “Improve the Quality of Life in Africa”, and “Industrialise Africa”. Towards 2016, the ADB signed the biggest energy deal on the continent, to get all African countries to commit to a “New Deal for Energy for Africa”. The New Deal’s strategic goal is to have universal power and electricity by 2025 to 100% of all urban areas and 95% of all rural areas. This means adding 160 GW of on-grid generation capacity and 130 million new on-grid connections, so that 150 million additional households will have access to clean cooking energy. The New Deal will be achieved by spearheading flagship programmes, which will start by working with governments’ utility companies and the private sector. They will implement and evaluate those programmes and use the ADB’s financial muscle to support the resources required to implement those projects.

In terms of households and gender, it is important for the ADB as a bank to work with the private sector and governments, to look at smart funding solutions for women in the sector. A key focus for the ADB is to look at clean cooking solutions. At the moment, almost 700 million Africans do not have access to the right cooking solutions. This has huge implications on households, on their access to power, and also on health. The Bank wants to develop gender inclusive programmes that assist women in accessing the energy market. The ADB has already started to implement the procedure that, for every new investment, the investment team has to engage the Bank’s energy division to justify to what extent the new investment project is bringing women on board. At the moment the ADB’s procurement policies exclude the gender aspect, but the Bank is busy revisiting its policies. In terms of financing, the ADB recently launched an “Affirmative Action Fund for Women” (AAFAWA), through which it could access financing for their businesses. The ADB has committed 100 million to the Fund

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and is working with other financial institutions to leverage the Fund by up to 3 billion. The ADB does not lend directly to the SMEs, but works with financial institutions that provide loans to the women.

The ADB’s goals of the New Deal are even more inspirational than the targets set by the Sustainable Development Goals (SDGs), for universal access to energy by 2030. UN Women is credited for garnering commitment for the Sustainable Development Goal 5 (SDG 5) on “achieving gender equality and empowering all women and girls”. One of the reasons for this success is the growing recognition that women have a critical role to play in all the SDGs.

UN Women has a partnership with the ADB to achieve the energy targets in terms of gender equality. UN Women places SDG 7, the aim to increase sustainable renewables, in relation to SDG 5 for women: through their research they recognised that women entrepreneurs can play a strong role in the renewable energy sector. They are thus beginning to work with governments to change their preferential procurement policies for renewable energy, to make them more accessible to women. In this, South Africa is a good example: it has about ZAR190 billion set aside for the energy project, of which about ZAR9.6 billion is set aside for women in particular.

This means that behaviour needs to change: UN Women works on both the supply and the demand sides. On the supply side it asks governments to closely track which money is reaching women. In fact, of the ZAR9.6 billion, only 3% has reached women. From the policy side, governments need to make sure that procurement policies are structured in a way that enables women to actually access them. The way procurement is delivered has to be simplified so that it can be understood by rural women, women cooperatives, and smaller women enterprises.

On the demand side, UN Women works closely with women to help them understand what procurement opportunities are available, and to build up the capacity to access renewable energy.

Addressing one or two SDGs often means several other SDGs are also covered. Thus, linking SDG 7 and SDG 5 addresses SDG 1 on poverty, simply because there is improved health and improved nutrition amongst households. Improved nutrition of a family means that SDG 2, zero hunger, is tackled. It also means that children live longer; this links us to the next level, SDG 3, reducing infant mortality. By ploughing their income back into their families and communities, women invest in their children’s education, SDG 4. SDG 7 also involves the issue of getting women involved in work outside of subsistence agriculture, which means that they move up the value chain and become involved in the manufacturing processes, the aim of SDG 8. It can also take us to SDG 9, industry infrastructure.

Women in general do more with a dollar than men. Research suggests that women can accomplish with USD10 what men would need USD110 for. Women thus tend to stretch the dollar, and they invest not only in themselves and their children, but also in their communities. Thus, if women are given access to resources, there is a high likelihood that it would have a high impact on their communities.

At the moment, 50% of agricultural labour in Africa is performed by women, and yet they are only responsible for bringing in 2% of overall income. Encouraging women to move up the value chain from agriculture to manufacturing, would double their income. Yet, this is only possible if the women have access to power.

The New Deal indicates that Africa’s poorest people are paying among the world’s highest prices for energy. A woman in northern Nigeria spends about 60–80 times per unit more for her energy than a resident of New York or London. This means that access is not enough, but other issues, such as affordability, are equally critical to change access to actual use.

In South Africa (SA), of 8 cents per kWh, 4 cents go to interest and equity return, and the remaining 4 cents go to capex and ONM. In sub-Saharan Africa, where the cost is approximately 12 cents, capex and ONM remain at between 4–5 cents, but the remainder is absorbed by the cost of capital, which is more expensive. Off-grid energy is approximately 50 cents per kWh, with a significantly higher cost of capital, which has an effect on the cost of household energy.

Affordability is critical for several reasons. First is the high cash expenditure that poor people invest in energy every year. The opportunity is thus to substitute USD500 billion of expenditure. This is significant if one considers that off-grid electric generation, such as diesel or heavy fuel oil (HFO) for SMEs, households and industry swallows about USD25 billion per year, expenditure that is really wasted. So there is actually affordability, Africa is spending money, but renewable energy, focused expenditure and targeted investment and spending, can reduce this bill much more quickly.

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In the New Deal, the ADB has set a very ambitious target to provide clean cooking energy for 130 million households by 2025. Clean cooking in Africa has been an aim since the 1970s, and yet this goal has still not been achieved. A primary reason for this is that the clean (renewable) energy cooking stoves that were developed, did not in fact address the needs of the people. Too often the stoves were designed by engineers who tried to fulfil technological requirements, but ignored the needs of the users, such as safety.

Introducing new stoves into the African market requires entrepreneurs like Marida, to build up a large customer base, both for the entrepreneurs selling the stoves, as well as for those selling the renewable energy source (such as wood pellets). Building the customer base requires market development, which needs to draw on the help of people within the communities to educate and help people, to see what people need, and to see what they can spend. Business models must be adapted to these realities. The stoves and energy sources offer the location where women can come in as agents, where they can start learning about entrepreneurship.

Similarly to Marida, Carbon Guinea sees it as essential to work with women in the household: it is women who manage the households and who cook. In this, women do three things that have a critical effect on the environment: their cooking demands large quantities of wood, which leads to the release of CO2. This can have an effect on the health of the women. Carbon Guinea argues that it is necessary to produce stoves locally and to adapt them to the local conditions - with which they have been successful. They promoted the stoves with the help of the National Debt Connection (NDC). The NDC agreed to help distribute one million of these stoves between 2016 and 2020. It is not much yet, but they are continuing to improve the stove. Solutions need to be found in the connection between the environment, women and access to energy: it is women who buy the wood because they want to cook; it is here where solutions must be found. Therefore, is it important to evaluate the economy in which these women are engaged, because this is the place where they can become entrepreneurs.

For the last 30 years, work in the energy sector has been driven by technology-centred thinking: it looked at what resources are the most economical and then scaled these up. This work was based on grid-connected capabilities. Yet, the grid has not reached a lot of people and in order to address them, one needs to look at what they do.

Millennium Resource Strategy works with a group that does solar water plants for irrigation. Those solar water pumps have shown a nine-fold increase in productivity of farmland: a farmer can plough three times as much land and can have three crops per year instead of just one. The solar water pumps also provide lighting. Hubs are created around solar water pumps with health services, e-education, etc. This brings the cost of the system down because it provides so many additional services to the community that could not be afforded previously. There are a number of elements required to deliver this, especially a lower cost of capital by de-risking the initiatives and indigenising the manufacturing of the technology. All of this is based on policy. In the world, renewable energy investment matches fossil fuel investment, 50% to 50%. The same should be the case for off-grid and on-grid investments: at the moment Africa is going for on-grid investment; policy makers should incentivise equal investment in off-grid investment, as this would mobilise the scale of capital required to bring low-cost capital to the sector.

Cooking and solar home systems are needed to give people tools to develop themselves. But it requires innovation in technology, finance, as well as organisation. In Africa, one would need a large customer base, a good distribution system and ideally a good internet tool to carefully organise this system. It would need cooperation with new types of banks, such as Capitec, and with mobile phone companies for money and data collection. This is a new way of doing business that has not been done on a large scale before. It requires partners in finance, banking, IT and local government.

ADB launched its Affirmative Finance Action for Women in Africa with an investment of USD300 million, to leverage another USD3 billion for financing women entrepreneurs. UN Women has launched a Sustainable Energy Entrepreneurship and Access Programme at COP 21. UN Women and ADB have a memorandum of understanding (MOU) between them to work together on these shared goals. The UN Women programme is a flagship, large-scale initiative that started out in Senegal and Morocco as a region, but other countries are taking up the model and developing it for themselves. UN Women works first and foremost with governments; so the first part of the initiative is to look at policy and preferential procurement. Not many governments have made specific commitments in this regard. The second part is financing and UN Women sees the ADB as the large partner in financing; the challenge is to organise the money in a way that women can gain access to it. The third part is terms of skills and information, so that women can access the information they need as entrepreneurs. For this

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UN Women has an online platform called “Women Power” – a space where women are connected to real opportunities. The platform would also allow a tracking of monies.

Carbon Guinee works strongly at the community level because this is where the need is located (the people at this level know what they need). The women want to make a lot of things but do not necessarily have all the information and means to do so. But financing and government institutions often do not think of the limits that these women confront. So what is necessary is collaboration from both sides. More than 50% of the African population is rural and 53% of this is female. The idea is to introduce developments together with these women, and to initiate activities for them in these environments, in ways that do not put pressure on the environment.

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PANEL 5 PROJECT BANKABILITY

MODERATOR: Dr Martyn Davies, Deloitte PANEL MEMBERS: Mandisi Nkuhlu, ECIC Clive Ferreira, GAIA Infrastructure Capital Limited Tas Anvaripour, The Abraaj Group Lida Fitts, US Trade & Development Agency Elliot Monama, Development Bank of Southern Africa

KEY QUESTIONS:• What are the fundamentals of infrastructure project bankability?• Of what importance is risk management to issues of project bankability?• What factors need to be considered for infrastructure project bankability?• What are the major challenges facing infrastructure project bankability in Africa?

KEY POINTS:• Good project preparation is an absolute necessity in guaranteeing infrastructure project bankability in Africa• Cash flow visibility is a key determinant for attracting financial institution funding for infrastructure projects • A country’s economic and political cycle is important in securing funding for infrastructure projects • A country’s affordability of infrastructure projects determines infrastructure project bankability.

SYNOPSIS:Bankability is made up of two words: bank and ability. Bankability simply refers to the ability of the bank to finance a project. Bankability is not defined by what a project needs, but is defined by what the bank needs in order to finance an infrastructure project.

With regard to bankability, there are a number of factors that must be addressed: the first is the issue of sponsors. If the project is to pass the ‘bankability muster’ it is advisable to partner with associates or companies that have a good track record of carrying out infrastructure projects. Second, the choice of the country where the project is going to be situated is critical. There are countries whose banks do not like so it is unwise to develop projects in these places. Such countries are not bankable from the banks point of view. So, it is important to get the right sponsor doing the right project in the right country.

Third, the infrastructure project has got to be done in the right sector. Water infrastructure projects are politically sensitive from an African point of view and should rather be left alone. Energy projects are much better projects to deal with, because at the end of the day, they have better returns when compared to water projects.

Fourth, the project must be done in the right economic cycle. Currently, the commodity prices slump affecting African economies has negative connotations for infrastructure projects involving constructing roads and railways for the transportation of cocoa or coffee. Such projects are not likely to be financed by banks because of their poor economic viability. Last, it is advisable conduct projects in the right political cycle. It is unwise to start projects in an African country having elections in six months. It is better to stay away until a new government is in place, and then start the infrastructure project.

The reason why most infrastructure projects are not being financed, and are not bankable in Africa is because of inadequate preparation. Typically, the project preparation cost is 10% of the total. A number of viable infrastructure projects in Africa have been deemed ‘unbankable’ simply because the project developers had poor advisors who lacked knowledge of what the bank required, and what the equity financing needs are, amongst other salient matters. In addition to a lack of knowledgeable advisors, is the lack of risk takers. In this regard, the private sector is particularly risk-averse when it comes to infrastructure projects. Typically, project development capital can be considered to be like venture capital. Morever with regard to infrastructure projects, the expectation is that the project must be done with the investors exiting in two or three years, with higher returns.

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However, this is not the case with infrastructure projects whose life span is ten years and even longer. With regard to bankability, private capital investment should not be concerned about the risks involved in infrastructure projects in Africa, as long as these risks can be properly mitigated against factors such as the structuring and financing of the transaction.

When it comes to issue of financing projects in Africa, one of the challenges in Africa is that African countries have different sets of risks. Morever, there are significant differences between African countries; different countries face different challenges and are at different stages of development. This becomes critical when testing the bankability and viability of infrastructure projects, or when evaluating the vulnerability of the project to other economic forces in that particular country.

Poorly prepared projects in Africa are the reason why projects on the continent are not bankable. In some cases, the work of project preparation itself is not done properly often failing to look at the bigger picture and the market risk. Often insufficient attention is paid to how risks can be mitigated, as well as the failure of business models to account for where the revenues will come from, in the infrastructure projects.

Project bankability is also linked to the affordability of the infrastructure to that economy. In an IPP or PPP road infrastructure project, where the government works with the private sector, the ability and capacity of the consumer to pay the road tolls is not unlimited. Faced with this challenge, governments can increase the tariff and pass on the risks to the consumer, or they can top up the road payments and give to the private sector. In some cases, the government may want to pass the risks on to the private sector. Such a payment risk typically manifests itself as ‘political risk’ and in such cases the government may be willing to pass on the risk to the users, looking at the political trade-offs that this move involves.

This forces some governments to create a PPP model where the buck stops with the governments. Such governments are saddled with debt obligations, or contingent liabilities in the form of hard currency, which the country must have access to in order to service foreign bank loans. Bankability and affordability go hand in hand.

Cash flow issues are invariably linked to bankability problems. Any viable infrastructure project relies and depends on the cash flow. Banks will not fund any infrastructure project that does not demonstrate significant cash low visibility. In addition to this, it is advisable to figure out first who is going to pay for this project and then determine the cash flow associated with the project. How legitimate is it, and how sustainable is it? Issues of bankability also revolve around the first revenue stream of the project. If this can be fixed right at the start, then other factors can be easily factored in, such as the investors, the contractor, etc.

Furthermore, it is important to get the procurement processes of the infrastructure project right. Investors need to know that they are making investments where issues of procurement are correctly done and are 100% reliable. This is another key aspect that determines the bankability of projects.

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PANEL 6 AFRICAN LEADERSHIP & TALENT DEVELOPMENT

MODERATOR: Nigel Gwynne-Evans, the dtiPANEL MEMBERS: Sharron L McPherson, WEDI International Dr Bola Olabisis, WEISED 2020 Dr Justina Dugbazah, Gender Development Dr Sunita Pitamber, African Development Bank Tabassum Qadir, Skywise Dr Dumisani Magadlela, DBSA

KEY QUESTIONS:• Can Africa strengthen its leadership position, grow its next generation of leaders and set the vision for world-class

infrastructure?• Where are the emerging political and business leaders that can make good policy decisions resulting in certainty,

transparency and economic growth?• How does a nation ensure leadership for economic growth?

KEY POINTS:• Responsibilities of the private and public sectors in providing leadership in countries where they operate• Good leadership is imperative for the future of Africa• Current leaders need to pass on their skills and mentor the next generation of leaders in order to ensure Africa’s future

success• Current leaders face enormous pressures, which hampers their ability to mentor and build capacity.

SYNOPSIS:In order to begin the discussion it is necessary to first define leadership. Leadership is about service. Without the capacity and willingness to serve, leadership defaults to authority and control. It is necessary to hold leaders accountable in terms of their capacity and willingness to serve. When talent development is discussed, the operative word is development. Infrastructure projects and other development projects need to enable actual development in people’s lives. When looking at leadership in communities, business or institutions, what is being sought is consensus building and inclusivity. Development is not only about looking for the transfer of knowledge, but also the transfer of leadership skills. To ensure success it is necessary to have successful leadership together with accountability. Leadership is not only about managing but also about getting things done in a better way, and at a higher level, in whatever institution or context, then transferring those skills to developing young talent.

The role of women and young people in leadership is critical. Capacity building and training in leadership has made a huge impact. There needs to be more capacity building and innovation. Coaching and mentoring is also very important. At the moment there is a need for leadership role models that will challenge society to think beyond the current state, and envision a future that is more positive. There are great leadership role models who have done incredible things across the continent; however, there are also examples of poor leadership. Africa needs to produce more effective leaders.

The cultures in Africa are very different and diverse, so a practice in one country may not apply to another country. It is not easy in a cultural environment like South Africa. People do not want to pass on their expertise and skills because there is still a great deal of racism. In other cultures, people just do not have the confidence to assert themselves. There is also the challenge of traditional leaders, some who have always been stubborn. However, it is about the approach; it is not always about changing mindsets, but about creating mutually beneficial propositions. It is also important to consider that African leaders are under enormous pressure, and the demands on leadership are immense. Under these circumstances leaders are not good at taking on mentorship and transferring skills.

Countries really need to look at what is happening right now. If they keep doing what they have been doing, then they are going to get the same results. Maybe there needs to be more think-tanks to get people thinking about what is happening, and to look at which ingenious ideas exist that can assist in making Africa more competitive. The majority of people fear

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change. Only those people who can truly lead, can begin to make an impact. While some experts believe that there is a need to define leadership further, other experts believe that there should be less talk about leadership, and more getting on with doing what needs to get done. Leaders need to coach, teach and develop future leaders that are selfless and will serve. Going forward, institutions will play a huge role in creating and empowering leaders through development programmes.

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PANEL 7 DEVELOPMENT PARTNERS: COMPLEMENTARY APPROACHES TO INCLUSIVE INFRASTRUCTURE

MODERATOR: Yana Watson Kakar, Dalberg PANEL MEMBERS: Charles Reeve, UK Department for International Development (DFID) Tomomi Tokouri, Japanese International Cooperation Agency (JICA)/Development Bank of Southern Africa (DBSA) Karen Stefiszyn, PowerAfrica Michele Ruiters, Development Bank of Southern Africa (DBSA) Noel Kulumeka, African Development Bank Group

KEY QUESTIONS:• What is the current overview of the role of development partners in supporting the development of inclusive

infrastructure?• What are potential models and approaches being developed to ensure inclusive infrastructure?• What are potential models to build capacity of Africa’s infrastructure sector to develop inclusive infrastructure?• How are we seeing the trend of inclusive infrastructure becoming the norm in how projects are planned, designed and

executed? • How are development partners helping to accelerate the process of inclusive infrastructure becoming the norm?

KEY POINTS:• Inclusivity calls in particular for the inclusion of women, youth and vulnerable populations • Inclusivity ensures that all citizens in a country are considered and thus fulfils human rights requirements • Development finance institutions (DFIs) need to make inclusivity a requirement of their investment • Infrastructure development needs to take into account that climate change will be one of the most critical challenges

facing vulnerable communities in Africa in the future • Governments need to plan infrastructure for the future and be more proactive in terms of maintenance, policies and

the development of new legal and regulatory conditions.

SYNOPSIS:The urgency to accelerate infrastructure building is pressing; there is still less than 40% access to electricity; internet penetration is less than 10%; only 25% of the road network is paved.

There is a significant financial and business reason for inclusive infrastructure. A more inclusive project has thought through key operational and execution risks, so that the likelihood of interruptions is lower; it is more attractive for public investment, which means access to capital in the early stages of the project at more affordable rates, and it has a greater likelihood for long-term success.

Key partners in inclusive infrastructure projects are development partners that can be national or sub-national public organisations, donor agencies, bilateral technical agencies, etc. They are critical in transforming inclusive infrastructure from a good idea to reality.

Currently, the scale of projects is getting bigger so that governments have to deal with complex financial project arrangements, as well as many different stakeholders. They have to look out, not only for national projects, but also for corridor based and regional projects. There are several key factors that governments should focus on: building institutional capacity to make projects run through more quickly and efficiently; improving policies to support complex projects; improving governance, and strengthening their relationships with other countries, so that they have the basis to tackle cross-cutting issues in the process of development, such as gender or youth.

Development partners can be more effective in guiding governments if they ground inclusive infrastructure in a human rights approach. This means emphasising that governments are accountable as to whether the infrastructures they build, meets human rights obligations and development commitments. Thus, in terms of gender, inclusive infrastructure needs

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to ensure participation, as this ensures the project satisfies the human right of inclusiveness. Guidance thus reminds governments that they are accountable to certain human rights and development commitments, such as the sustainable development goals (SDGs).

Development partners have to partner with each other in order to speak to governments with one voice, thereby avoiding sending conflicting messages. Inclusiveness has to start at the beginning of the project cycle. If the people are involved or affected, it is more likely they will see the new infrastructure as a common good that needs to be cared for and looked after.

DFIs could be advisors to governments as part of the national development plan process. By the time that projects come to DFIs for financing, the assumption is that communities and affected parties have been consulted, when in many cases they actually have not. So DFIs have a responsibility to ensure that communities are involved in the process. The DBSA, as an advisor to the SA government, plays a big role in the SA government’s implementation of its infrastructure projects. As part of its work it brings communities together to discuss the financing of public goods, e.g. education and health infrastructure. Regional projects, however, are more challenging to the DBSA, when they come in as secondary financiers, and also where the communities affected are in regions where the DBSA does not work.

In inclusive infrastructure, care needs to be taken that the definition of who is included does not automatically exclude other communities. For example, in a corridor project, those communities living next to where the corridor infrastructure is being built should not be excluded; neither should rural people be excluded when urban infrastructure projects planned.

In terms of inclusive infrastructure regarding small rural communities, climate change needs to be kept in mind. It directly affects whether these communities have water and food security. If they do not have this, then governments have to provide it. Therefore, if one wants to lay the basis for good economic growth in small rural communities, one has to have infrastructure, such as small irrigation projects and a water supply, so that they can lift themselves out of poverty. They need access to markets, roads, market facilities, cold storage facilities, and support to grow appropriate crops. The water sector needs to be hydro-supportive. In this regard, government needs to work with the big users of water (commercial agriculture, mining, hydro power, industry) to develop an infrastructure project. The private sector is often the main employer in rural areas and effectively becomes the government – it plays a crucial role in terms of the stewardship and corporate social responsibility, with which government must work.

The DBSA had a sustainable development communities programme that assisted municipalities with development projects. In this programme, communities and ward leaders met, discussed the development needs of the community, and defined development programmes, and the DBSA assisted in the collaboration and debate, bringing in technical knowledge and capacity building. The programme was taken over by government, but it has not been replicated with the same success as was seen under the DBSA. The infrastructure delivery section of the DBSA is currently trying to use the same approach in terms of building housing and health infrastructure.

In rural areas, climate change is leading to a situation where there is increasing competition between humans and animals for water resources. Animals tend to go towards the waterway corridors, but this is also where humans grow crops. DFID is working together with the secretariat of CASA to provide small scale water and irrigation schemes away from the rivers so that communities not near the waterways can survive with water and food security. At the moment, DFID has six small-scale projects in Namibia, with boreholes, wind turbines and solar panels at a total cost of less than USD300 000. In this way, they provide communities with an opportunity to participate in the tourism value chain in the area. Planning is now being done to upscale this to a much wider area. Each project is small but the aggregate result is large, and moreover, it gives an important role to the private sector.

JAIGA is a bilateral development organisation but, based on the decision of the G8 summit in 2005; it expanded into region and works in corridors. It has now developed a corridor master plan with priority corridors: the Nakala Corridor (from Zambia to the Mozambique coast), the Central Corridor (from Rwanda/Burundi to the Kenyan coast), the North–South Corridor (from Zambia to Durban), and the West African Growth Ring (linking Burkina Faso, Ghana, Cote d’Ivoire, Togo, Benin and Nigeria). JAIGA focuses on these corridors and tries to develop comprehensive and inclusive development plans. It looks not only at the physical infrastructure component, but also at the efficiency of the logistics, as well as the potential of industry along the corridor. If JAIGA can show the situation of the three factors, then the hope is to attract the private sector, especially from Japan. The private sector can then bring its technology to improve the quality of the

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infrastructure. With regard to including vulnerable groups, they look at the social aspects in the corridors, locally, regionally and nationally, and put this together inclusively.

In projects run by the Power Africa Transactions and Reform Programme, as one of the main implementing partners of Power Africa, it made the experience of a disjuncture as to how gender issues were integrated in the development of the projects. Gender is covered by a gender advisor situated in Pretoria. But projects are developed all over Africa by transaction advisors who are under pressure to close deals and who themselves do not have any gender training. The gender advisor thus becomes something of a thorn in the side of the transaction advisors, rather than someone closely incorporated in the development of a project.

Private-public partnerships (PPPs) can be filled with tensions that come from a lack of clarity as to the delineating of roles and responsibilities between government and the private sector. There has been a failure on the part of African governments to maintain and rehabilitate existing infrastructure. Many governments think that they can mobilise funds from development partners to build infrastructure, then forget about the infrastructure once it is built. No strategy for maintenance is put in place, resulting in disrepair. Governments should thus limit their responsibility to the building of the infrastructure, and once it is built, they should allow the private sector to take over the management and maintenance, using performance based contracts. This would cost less over the long term.

The ADB is developing a new instrument, adapted from the ADB, to ensure all operations have inclusive goals, focusing mainly on women. Once this instrument is approved, every ABD project will need a category that determines to what extent the project will include beneficiaries in its design activities. The ADB has already had conversations with the governments of Zambia, Kenya and Tunisia, and all have been very supportive. The reason for this support is that most African countries have in their constitutions guidelines for gender-based, inclusive growth; however, but they do not know how to go about ensuring it.

There is a danger of stopping development by imposing too many conditions. Development partners must be supportive of national and regional development paths.

Inclusivity should include not only women and youth, disabled and other vulnerable communities, but should also include the informal sector. It is in this sector that 90% of new jobs have been created over the last 20 years.

There are platforms for DFIs to meet and talk about common agendas and strategies, where they try to create more than one-year programmes to address infrastructure projects. However, cooperation works best at a bilateral level where a development partner works with one government at a time. As yet, multilateral cooperation is not yet as well developed.

Inclusion may take time, but infrastructure also takes a lot of time. Including the people who will be affected by the infrastructure is a form of investment and is therefore time well spent. There are some good examples of this: when building a dam in Lusaka, the community raised the concern that during the flooding season; the children would be cut off from their school. As a result, the project built a bridge. It was an easy and cost-effective solution, based on community knowledge, which brought their buy-in for the project. As such, inclusiveness is about a process of how to do things; it need not be expensive and time-consuming in order to make a big difference in people’s lives.

Similarly, road building projects should investigate how women and men would use the roads differently. Women often use a different type of transportation mode than men do - often ox carts, bicycles or walking. For these purposes, roads should be designed to be safe for all types of users, and not only for cars and trucks. When the ADB now finances road building, it demands that roads include seam shoulders for these road users.

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DAY 2: 10 JUNE 2016

PANEL 8 REGIONAL PROJECT DEVELOPMENT

MODERATOR: Paul Runge, Africa House PANEL MEMBERS: Stanely Subramoney, Mentson Holdings Hildabertha Kundu, Development Bank of Southern Africa (DBSA) (International Finance Team) Jurie Swart, African Infrastructure Investment Managers Shamilah Grimwood, Bowman Gilfillan

KEY QUESTIONS: • What are the necessary criteria to make a regional project work?• What makes regional projects successful?• How can regional projects be funded? • How do all different types of funders play a role in infrastructure development? • How is the change in developmental finance scenario relating to regional projects?

KEY POINTS: • East Africa is the one region that is a good example of interconnectedness • There are different kinds of technology that can be applied for cross-border projects • Task teams are needed to align trans-national frameworks and differing agendas • Technology is key to ensuring accountability and transparency.

SYNOPSIS:The first criteria that needs to be met for a regional project to succeed, is leadership. If one observes failed projects across the African continent, or across the world, it is failed leadership and clear direction that are the primary causes. The second criteria that needs to be met, is that of certainty. What businesses do not like is uncertainty; they thrive in environments that provide certainty. Thirdly, one needs to ask if there is a market and whether money can be made. Africa has billions of people, and it has the largest growth population that is mobile, therefore Africa has a market. People live in the digital age; the age of technology and the age of mobility. Above all people live in the age of change. What is really important these days is to embrace technology, and in that technology, there is innovation.

One of the issues around cross borders is simple harmonisation – not only of gauges but harmonisation of the legal set up, taxation set up, the corporate structure set up, etc. When you are dealing in multi jurisdictions (as part of certainty), you need to make sure that when the project is up and running you do not get blocked by bureaucrats in terms of tax issues. But above all, when looking at regional projects- which are large-scale, multi-country projects- they have to make financial sense. Another issue, is that of funding a project. The future for large-scale projects has to be around blended funding. What is typical in public-private partnerships (PPPs) is for the private sector to take all the benefits, and for government to take all the risks (when projects went wrong government bore the brunt of the risk). So blended funding is a new model, where the question becomes, ‘how do we share the risks?’

The world is awash with money, in other words, there is plenty of money floating around the world. One of the challenges with this money is that there are not enough bankable projects. So good projects are available, but they have not reached the bankability stage. What one finds is that traditional developmental agencies are there, but there is also ‘cheap’ money looking for returns. Observing Ethiopia’s project the Grand Renaissance Dam, we see the bulk of the project being funded by Ethiopian funds. The government said this is a national project, of national pride; as a result they raised the energy fund. To a large extent the project is self-funded. What is phenomenal about Ethiopia is the committed leadership. It self-funds most of the initial work so it can maintain control.

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Section 28 of the South African Constitution allows significant investment in infrastructure. One of the down sides is that African pension funds (with the exception of South Africa) do not invest their funds internally, so most of the African pension funds have the bulk of their money in London, Frankfurt or New York. Consequently, African savings are taken to fund infrastructure in the developed world. However, government officials and finance ministers have been advised to ensure that African governments invest in their own countries, because there is no better message to a foreign investor than when domestic investors invest. When looking at the models for funding, one of the key issues is how much local money is coming into the projects. Projects are looking at far more aggressive debt equity ratios than they used to, taking greater risks, because people are saying that money is cheap so the risk appetite is improving.

When a cross border or regional project is not going to be commercially bankable, or when it needs some sort of blended finance, or if it needs to be an entirely government project, it is recognised early on, because ultimately the private sector is there to make returns that are seen as a big evil thing. However, at the end of the day those are the very same. For example, a few years ago Swaziland decided that 30% of all savings needed to be repatriated to Swaziland and invested; however, there was nowhere to put it. So 30% comes back but it merely sits in the bank; a bit of a chicken-and-egg situation. As part of their role, investors believe that they should get projects off the ground and make them investable, and in so doing, grow an investable market for people on the African continent to be able to place money where it can get returns in their own country.

Private sector investors welcome local investments, as they are one of the biggest political protections one can get where people can ensure a significant injection of local money into the projects. Risks need to be appropriately boxed and if there is a responsibility to keep an enabling environment in place that is the responsibility of the government. Risks need to be passed correctly and the private sector needs to act in a way that ensures the deal is fair. And as one might have observed, if the deal seems too good to be true, then it probably is and one will be trading backwards.

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PANEL 9 ICT & TELECOMMUNICATIONS – THE GROWTH IN CONNECTIVITY IN AFRICA

MODERATOR: Anesu Charamba, Frost & SullivanPANEL MEMBERS: Peter Kahiigi, NITA Byron Clatterbuck, SEACOM Onyebuchi Memeh, Standard Chartered Bank Asif Valley, Oracle

KEY QUESTIONS:• How can Africa foster a business climate and a development environment that increases the drive to modernize the

continent with regards to technology?• Can Africa translate its mobile sector boom into growth of its ICT & telecoms sector?• How much investment in voice and broadband infrastructure would be required to achieve universal population

coverage for Africa?• How much investment is required to improve connectivity across Africa’s regions?• What examples are there of infrastructure projects that have brought broadband to Africans and what stage of

development are they at?

KEY POINTS:• The ICT sector has seen massive expansion over the last year• The public and private sector need to work together to ensure future growth of the sector, this means improved

legislation, regulation and support• There are still high costs when entering the ICT sector in Africa due to the high costs of implementation and these are

passed on to the consumer• Regulation is key to making ICT affordable especially to lower income groups.

SYNOPSIS:ICT and telecommunications, which are needed everywhere, can help lead Africa into the next century. The penetration of mobile technology has grown 20–25% in the last year. There are people with smart phones and feature phones; however, a number of features and applications need to be translated into a service that can be used on all types of phones. ICT and mobility remains just such an enabler. This infrastructure is already established; it is innovation that needs to come next. A number of ICT companies are investing in education through various innovation hubs. The best use of technology has been seen is in micro finance banking and health care. There is no doubt that far more will be seen in coming years. ICT is the backbone of innovation on the continent.

In the public sector there are two views: of the consumers and the other of the suppliers. Government usually has to take the lead on ICT investment because the private sector looks at return on investment, rather than social good. Public and private sectors need to work together to help with providing access to infrastructure, and also with legislating, regulating, and promoting consumption of local content.

One challenge that exists is that Africa still lacks policies such as data governance, data sharing etc. There is not much clarity about legislation, enforcement of claims, contracts, and policy in this sector. From the business side, growth is still coming from large companies. Governance around data needs to be solved. Once that has been resolved then Africa can compete globally. Currently, the existing circumstances mean that the sector is restricted, and without transformation, it is unlikely that there will be growth. Furthermore, regional integration in terms of policy is needed.

The other challenge is the high costs of ICT infrastructure projects. Every time a new player comes in and has to invest in new infrastructure, they pass on the cost to the consumer, and when this happens, the cost of access becomes expensive. Continual upgrading is also necessary and the developer has to be aware of the cash flow post-development; sometimes this gap is closed by government institutions purchasing their receivables. The other challenge involves educating

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communities about the technology and the cost of vandalism, which also impacts on the cost of the project. Over time costs will come down and that is when progress will be seen. Barriers are starting to break down; however, if a company wants to be a primary provider, it may already be too late, or the barrier may be too high.

Providing access to infrastructure for the low income demographic is also a challenge. Access is dependent on cost of service and the cost of the device needed to access the service. Regulation is very important in solving this and government needs to enforce these regulations so that together with private partners, they can increase access across the board.

There have been changes over a number of years. Skills were in short supply; however, today the continent is in a different paradigm, and is better able to bring in technology, speedily and at lower costs. There needs to be a higher return for everyone including the customer. Consumer patterns are changing and the sector needs to be cognizant of those changes. This will help ensure better planning in industry and as government.

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PANEL 10 GETTING THE FRAMEWORK RIGHT: POLICIES AND REGULATIONS FOR INCLUSIVE INFRASTRUCTURE

MODERATOR: Daniel Makokera, Pamuzinda Productions PANEL MEMBERS: Mahama Kappiah, ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREE) Vivienne Apopo, East African Development Bank (EADB) Ebrima Sall, Council for the Development of Social Science Research in Africa (CODESRIA) Sindiso Ngwenya, Common Market for Eastern and Southern Africa (COMESA) Nozipho Mdawe, Port Management Association of Eastern and Southern Africa (PMAESA)

KEY QUESTIONS:• What are the gender differences and other inequalities in the infrastructure sector in Africa?• What is the business case for the social and economic potential of inclusive infrastructure policies?• How can we ensure that women’s inputs are considered and their needs met when creating policies, resource budgets

and?• What are best practices and lessons learned from countries, and other relevant stakeholders that have begun to reform

policies and regulations?

KEY POINTS:• The planning and design of infrastructure projects needs to take into account the needs of all communities affected by

the project, even if they are not the final recipients of the service • Infrastructure needs to take into account the human capital that is involved • Governments should put proper structures and policies in place and establish industrial development zones through

which women can produce goods• Women, especially those in rural areas or the informal sector, need assistance in organising into associations, to be able

to take the economic opportunities that may be available

SYNOPSIS: Africans interact with infrastructure almost passively because of the way the infrastructure is structured. It does not take into account citizens challenges (e.g. lack of electricity, water, and oil, or gas lines bypassing the village when they move into urban or peri-urban areas). We need to consider all citizens, irrespective of social standing or geographical locations.

Many countries do not have forward-looking policies or legislation that takes into account the growing population and the new challenges people face today. There is a need to overhaul and review existing policy frameworks that take into account real challenges. We need an infrastructure that supports a youthful population, both in urban and rural areas, so that they have the basic amenities of life to support themselves.

Development projects in one sector (e.g. water, roads, agriculture, economy) tend not to look out for the policies of other sectors. There is thus a need for an overview that regulates how sector policies speak to each other and that projects address the needs of the majority.

Often the priorities of infrastructure projects are set by the funding agencies rather than by the needs of the communities affected by the new infrastructure; this includes not only the direct recipients of the service of the new infrastructure, but all communities affected by its building.

Infrastructure often does not serve the entire population, for example a road that does not provide for pedestrians. The problem lies in the planning process. The template that is applied mostly does not include the variable of gender: it understands everybody as a consumer and everybody as the same, even in the interview process done for the social and environmental impact assessments. Yet, women and men have different preferences and uses of infrastructure, both in terms of household purposes, as well as for economic purposes. Infrastructure needs to consider how women use infrastructure, for which purposes, their preferences for new infrastructure, and what they need for their economic endeavours to benefit their income levels.

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ECOWAS has developed and implemented a gender policy. Its section on energy has developed gender focal points that determine the elements that need to be considered at each stage of a project to ensure that women’s needs are addressed and that women are increasingly employed in projects. In its experience, however, the governments aligned with ECOWAS do not implement gender policies in their infrastructure departments; even where there are gender ministries, gender considerations do not flow into the infrastructure departments.

The infrastructure of ports and waterways are not utilised and exploited. If women were developed and empowered to utilise them, then it would be possible to turn the majority of imports into Africa, into majority exports from Africa. At the moment goods are imported that can be, and are, produced in Africa, often on a small-scale level by women, such as in agriculture (e.g. sugar, tea, fish). Empowering women would mean putting proper structures and policies in place and establishing industrial development zones through which women can produce goods that can be beneficiated.

Ports have a number of structures for developing the women who are employed within the system. However, what they do not yet have, is policies that force the development partners building new infrastructure, to integrate gender policies – e.g. to benefit the women who do not yet have employment. Needless to say, even for the women employed within ports, inflexible employment policies make it difficult for them to have both a job and look after their families.

Developing integrated infrastructure is critical in order to deal with the doubling of the urban population within the next decades.

Infrastructure includes not only economic infrastructure such as roads, railways and airports, but also social infrastructure, such as education and health.

Africa is home to some of the fastest growing economies in the world, but it is also home to some of the most unequal economies and societies in the world today. It is the continent with the lowest productivity levels. The keywords in the development agendas are inclusivity and transformation: we need inclusive and transformative infrastructure policies, but also inclusive and transformative social and economic policies. The importance of inclusivity is demonstrated, for example, by Tunisia, which had all the necessary infrastructure, but where the majority of the population did not feel included in the economy and society.

Infrastructure is determined by a liberal economic paradigm, which is applied even to education and health sectors. But economic arguments cannot do it alone – they are critical but may not be exclusive. A focus solely on economic growth loses sight of the fact that despite growth, inequality has been increasing. The aim should thus be to decrease inequality rather than following the simplistic aim of increasing growth.

In addition, many considered the poor not to be economic actors in themselves at all, until microfinance showed that they are indeed bankable.

It is necessary to recognise the constituencies that would be directly interested in infrastructure development (as, for example, civic groups, women’s groups, associations of drivers or teachers), and which need to brought in. The mobilisation of civil society can build the political will for certain developments, or for developments to happen in certain ways. Because, finally, development requires the support of leadership: the state needs to be brought back into infrastructure development. In many situations, policies for inclusive development have been worked out, but are not implemented because leadership is not strong enough. Leaders do not have a vision of where they want the state to be in 50 years. Societies need to keep leaders accountable, so that they give proper leadership and that policies are implemented.

If infrastructure is an enabler of development, then the planning, policies and implementation should be done holistically rather than at sectoral level, as it is currently done. This would ensure that the infrastructure takes into account the human capital that is involved. Infrastructure connectivity is basically about connecting people. This connection is essential for people to engage in economic activity. It also demands mobility and access. For this development, local content is crucial.

Despite the first African countries achieving independence 50 years ago, this development still needs to happen because many countries continue to work with infrastructure the same way they did during the colonial period. Thus, the traditional model was to build infrastructure to connect the source of a mineral directly with a port for export. It ignored social issues around this. In terms of social infrastructure, such as schools and health centres, they were placed in urban areas where

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they were considered to have a direct impact on the economy and where users are considered able to pay for it.

The EADB aims to achieve the highest impact and social return for its projects. Because women are the larger part of the population, they are more likely to be affected by the development.

Often women are not sufficiently organised to take the opportunities presented in infrastructure development looking to further women. Here new ways are being found to assist these women to organise together and to utilise the available funding.

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PANEL 11 INVEST IN THE ENERGY CONTINENT

MODERATOR: Jason Schaffer, Nano Energy PANEL MEMBERS: Prof. Mosad Elmissiry, NEPAD Energy Andrew Etzinger, Eskom EbrahimTokalia, Monetizing Gas Kannan Lakmeeharan, McKinsey & Company Robert Ashdown, Swiss Re Solutions

KEY QUESTIONS: • Why invest in energy?• How do we apply capital more efficiently?• Has something been done for the power pull process? • In the United States they have replaced coal with baseline gas, is it possible for African states to adopt the same strategy? • Is it possible for Eskom to generate power from the sea? • How is procurement seen for the future in the energy sector?

KEY POINTS: • Energy generates more revenue than any other sector and this is largely because energy has a constant demand as

anything that needs to function requires energy• When funders invest in energy, they indirectly contribute to different sectors, such as agriculture, water, technology, etc. • Exportation of electricity to other countries contributes in various ways to the South African economy and the GDP • Project finance is the most inefficient way to raise capital• Cost-reflective tariffs are important for the private sector.

SYNOPSIS:The important elements of getting the private sector involved include (1) sorting out the payment issue (once this is finalised a lot of things become easy); (2) checking who your customers are over time, and whether they are willing to protect you, and lastly (3) needing to be specific and have a tenet approach within each country.

The bottom of the pyramid consists of 650 million people; they spend about USD30 to USD50 billion on energy and energy equivalence a year because they do not have access to modern energy. There are about USD25 billion that gets spent on diesel for back-up generation and off-grid generation for those without access to electricity. Once this is quantified, one gets into the process of monetising and getting capital to come.

Eskom is highly capable of exporting power, even though it is essentially unable to tap the power from different sources. Therefore, taking advantage over a utility such as Eskom (to assist and push transmission all to the SADC power pull) is something with which funders and investors can assist. There is a small utility based in Kenya that is already looking at purchasing power and linking transmission lines all the way to Ethiopia, and also essentially exporting the power to Tanzania and Rwanda. Investors pick up on the utilities that are capable of transmitting power and then link them to the countries that are generating large amounts of power.

Eskom has conducted a situational analysis to evaluate if it is possible to generate electricity from the sea. It was found that the African coastal areas have very deep oceans; the shelves drop over very quickly and the rough waves are not suitable for electricity generation. As such, the research did not turn out well and market forces sidelined it.

Everyone is talking green energy. As a result coal has been categorised as a ‘bad thing’, and as one might have observed, large international pension funds contend that they are not considering coal going forward; instead they will rather sell off all the dirty technology generation. Regardless of the hazardous effect coal has on the environment, many people still hold the view that coal plays a significant role in the development of a country.

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PANEL 12 THE DEVELOPMENT OF TRANSPORT INFRASTRUCTURE

MODERATOR: Mervin Chetty, TransnetPANEL MEMBERS: Christopher Olobo, IFC Dr John Tambi, NEPAD Agency Ibrahim Gourouza, NEPAD Agency Prof Gina Porter, University of Durham

KEY QUESTIONS:• How can the costs of transport be reduced and the quality of services improved?• What are the possibilities for increasing both public and private financial investment in transport infrastructure?• What can be done to improve the maintenance of transport infrastructure?• How can the formal and informal (physical and non-physical) barriers to the movement of people, goods and services

be removed?• What support for regional cooperation and the integration of markets for transport services is possible?

KEY POINTS:• Africa is the second fastest growing region in the world• There are still challenges to growth, such as poor access to basic services and the internet, as well as high transport

costs• There are a number of challenges facing transportation infrastructure, including political risk and poor governance• Regional integration is a major stumbling block for infrastructure development on the continent.

SYNOPSIS:There is a gap between people already investing in Africa who understand the risks and opportunities, versus those who are overwhelmingly negative about investing in Africa, which makes bringing projects to the point of bankability challenging. Foreign Direct Investment continues to increase and Africa remains the second fastest growing region in the world. At the same time, there are still challenges, such as low access to basic services as well as Internet and massively high transport costs.

The Infrastructure required to sustain a growth rate of 7% is $80 billion investment per year for the next 10 years. Currently, the investment stands at about $40billion. The key challenge is financing that gap and bringing projects to bankability.

There are some key issues that need to be addressed in relation to transport infrastructure development: The first challenge is political risk: There is an issue of poor governance because governments are not investing in building good governance institutions, which continues to threaten peace and security on the continent. Also, the change of governments and ministers lowers investor confidence and raises risk profiles.

Another important issue is regional integration. In Africa, only 10–12% of trade is with other African countries. Pipelines need to be integrated regionally in order to improve trade within the continent. In some situations such as with the North/South corridor, all countries may not agree on projects and in such cases, the project should become a bilateral agreement, otherwise it will remain a pending project and will never get implemented. Without effective leadership and harmony between the countries, integration becomes very difficult, because what is priority in one country may not be priority in another.

In addition to regional integration, integrated transport systems are also a priority. In order to be able to integrate the transport infrastructure, the various transport systems such as road, rail, sea, air and pipelines, need to be understood. Transport infrastructure systems were inherited and the different transport systems were considered in isolation. Seamless integration is needed between the systems. The integrated approach to infrastructure development improves bankability of these projects. Leaders are also looking at S.M.A.R.T. (safe, mobile, automated, real time traffic management) integrated infrastructure corridors. In the past, heavy emphasis has been put on physical infrastructure; however, currently what is needed is to address the soft infrastructure issues (or the policy and regulatory environment) such as non-tariff barriers,

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immigration and customs issues.

A further concern is that of skills training and development. There is a lack of capacity in Africa to build infrastructure projects, and the skills that are available are cast aside to make room for talent that has been trained overseas. Each year USD50 billion leaves the continent in illicit financial flows and an estimated 85% of that money is due to tax evasion. There is no capacity in African financial institutions to deal with these challenges, making it another area of capacity building that is required. Where safety education is concerned, it is being provided for but is largely inadequate.

One major aspect affecting transport infrastructure development is the high capital costs of these projects. Infrastructure in Africa is on average twice the price it should be, due to high profit margins in projects, lack of economies of scale and competition. There are also high national debt levels affecting credit rating, which makes lending expensive. Infrastructure projects have long gestation periods and sometimes governments need to contribute financially. A project does not always have to be profitable but investors and developers need to look beyond bankability and look at investability. It is now necessary to look at the net gains of the infrastructure projects over long periods of time, especially when it comes to inclusive transport infrastructure.

Once the public sector is on board, seven key points need to be addressed:1. Market assessment: countries must know where they want investment. 2. Countries and regions must have a framework to provide clarity. 3. There is a need to have a credible private partner. 4. Termination and compensation: investors need to be clear about what will happen in the event that a project is

terminated down the line. 5. Currency risk: A principle should be to get as much local money as possible into infrastructure projects. 6. Environmental considerations: international environmental guidelines must be followed. 7. The public sector needs to have capacity, so training needs to be provided.

Pre-feasibility studies are very important in offsetting these high costs. It should be noted that there is a high cost attached to preparing a proposition, which needs to be considered. Without doing a thorough pre-feasibility study, the project may end up being a waste of time and money.

Although there is consensus that effective and efficient transport infrastructure is crucial for any nation to develop, a further consideration is the issue of maintaining existing transport infrastructure. Big projects are important; however, emphasis needs to be put on sustaining current resources.

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PANEL 13 MAXIMISING OPPORTUNITIES, MEETING NEEDS: THE PRIVATE SECTOR IN DELIVERING THE GENDER DIVIDEND IN INFRASTRUCTURE

MODERATOR: Dr Kadi Sesay, Sierra Leone PANEL MEMBERS: Jacob Makambwe, South African Cross Border Traders Association (SACBTA) Siza Mzimela, FlyBlueCrane (South African domestic and regional airline) Julia Prescot, Meridiam Infrastructure Fund Honourable LaDoris “Dot” Harris, US Department of Energy

KEY QUESTIONS:• What are the ways that the private sector is engaged in a dialogue on infrastructure?• How is it possible to ensure that women, as private sector operators, are considered in designing and delivering

infrastructure investments?• How can opportunities be showcased and best practiced from the private sector of inclusive infrastructure and

infrastructure services?• What methods can remove investment barriers and create equal opportunities for women’s entrepreneurship, decent

employment, and access to technologies in the infrastructure sector?

KEY POINTS:• Small-scale traders, especially women, who trade across borders, are essential for national and local economies, but

have not traditionally been considered in the building of cross-border infrastructure • The top three challenges identified by leaders in the energy sector worldwide, have been challenges to the inclusion of

technology, diversity and women, as well as innovation• It is easier for long-term investors to create projects that are inclusive because they are in a region over a long period,

and are also dependent on the goodwill of local communities • Investors often assume that businesses by women are by definition small-scale. This is a limiting assumption

SYNOPSIS: Small-scale traders that trade across the borders face a lot of challenges: storage of their goods at the borders; accommodation in the border areas where they are trading, and a centralised system to acquire export permits when they are trying to export to other countries. If the private sector wants to play a role in delivering the gender dividend in infrastructure building, it would need to involve women at the level of planning infrastructure. An example is building infrastructure at the border. Cross-border trade is undertaken to 70% by women, but they have not been provided for in terms of planning. In order to get their voices heard, the private sector involved the women in forming an association as a platform through which they could advocate for the infrastructure that would best serve them. Part of this is the building of storage facilities, as well as the advocacy with government for more centralised systems of issuance of permits.

Air transport is critical in Africa where currently it is often necessary to fly to Europe in order to reach another place in Africa. In addition, all training and equipment can only be received from overseas. This is an opportunity for the African Development Bank and other private sector investors to promote the aviation industry in Africa, making it easier, for example, to lease the aircraft and thereby to reduce the capital outlay necessary to run an airline. The industry as a whole, as it exists today, is very male dominated. The private sector should put measures in place to increase the participation of women in the sector.

Women in Africa should partner with African-American women, because the latter have enormous experience that can assist Africa become a better continent.

The top three challenges identified by leaders in the energy sector worldwide have been 1) technology; 2) diversity and women, and 3) innovation.

Projects should be accountable to gender, by demanding that the companies who are involved give scholarships and internships to women. For example:

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Women and girls need to be encouraged to get into the transport sector that is so strongly associated with men.

It is much easier for a long-term investor to support inclusivity. The reason is that this kind of investor needs to work with the community in order to build and reinforce the relationship with the local communities, which is necessary to build the infrastructure successfully. A solar power project in Senegal worked very closely with the community and purposefully wanted to engage women at all levels – in the consultation of the planning stage, jobs within the project, and setting up micro-financing for women to set up businesses within the context of the new infrastructure.

Often when investors deal with women, they think small – they expect a woman to run a small-scale project. But if a woman proposes a large-scale project, investors react with insecurity.

Investors are looking more and more for inclusivity. The question is, however, how this can be measured to prove that it has been done. There is a need for the development of a reliable method to quantify the benefits. At the moment, it is the tools of review that are run after a project or a stage has been completed, that allow one to prove that inclusivity improves the success of infrastructure project.

Regional integration cannot be achieved without gaining the participation of women and men in regional trade – as they are important trading partners for each other. A challenge for small-scale traders is the standards that are imposed by the countries to which the traders could possibly export. Within regions in Africa, initiatives have been implemented to simplify trade for small-scale farmers.

The role of traders can be very significant as a strategy for poverty alleviation, as seen for example in Zimbabwe, during the worst periods of drought, lack of food and poverty. The traders are the ones that brought the resources to the country for people to survive.

The Southern Africa Cross Border Traders Association (SACBTA) has created the Africantraders.border.org platform. It gives information on the goods that are allowed to cross which border and at what cost. This association provides evidence that women traders are facing bigger challenges than men experience. The platform also aims to grant women a space to address challenges and to bring them forward. The challenge in this regard is that women need to be able to read and write in order to use this system well. SACBTA has also been approached to develop a training manual for women in South Sudan who are interested in cross-border trade.

An important driver to assist women engaging in business and being entrepreneurs is for them to have mentors that guide women on how to take the next step.

Women who work in infrastructure sectors need to work on changing their sectors from within. They need to realise, though, when entering this space, that it is orientated towards the dominant male goal of rising to the top, regardless of the means . This male space does not consider a balanced life or a family with children as anything near as important as a career. Women should also come together in associations for networking and gaining knowledge by learning from others.

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PANEL 14 AGRICULTURE AND TRANS-BOUNDARY WATER PROJECTS IN AFRICA

MODERATOR: Eleni Giokos, CNN PANEL MEMBERS: Dr John Purchase, AgBiz Loyiso Ndlovu, Land Bank Kabiito Karamagi, Ligomarc Advocates Harvey Keown, Africa Foundation for Sustainable Development Josephine Gustafsson, African Regional Centre

KEY QUESTIONS:• How can the sector increase agriculture productivity and ensure that people use water efficiently?• How do water users look at governance and the water stewardship around the resources? • How can the private sector address the innovative solutions that are needed? • What will make agriculture viable in Africa?

KEY POINTS: • Worldwide agriculture’s demand for water is often left until last • Agriculture employs 40% of the workforce, yet it contributes very little to revenue and very little feeds through to

government coffers• Investments into agriculture actually translate to more benefits than the other sectors, including employment

opportunities• Policy makers, funders, and investors need to start driving African solutions for Africa • Trans-boundary water projects are not the panacea, so waiting for conclusion of sovereign agreements on water

projects is not going to deal with the problems holistically.

SYNOPSIS: Agriculture plays a crucial role in the African continent. However, less attention is given to the agricultural sector; the level of priority and focus that is required in agriculture is the same as in infrastructure. If one looks at priorities across the continent, and the sectors that are chosen for being able to gain the greatest economic benefit, economic imperatives infrastructure sits at the top of the chain and agriculture generally occupies position number two or three. Agriculture is challenged by systemic issues and until agriculture is viewed as an infrastructure imperative; it will not be given the attention it needs with the same level of passion as other sectors. In order for this to happen, there are three relationships that need to be in place. The first is that agriculture needs to have access to water, not only domestically, but in a particular region. When rain falls it does not rain in a particular area, it is not limited by any border – it rains in a region or in an area, and the challenges faced by one place will inevitably be faced by the neighbouring regions.

The second is that water agreements are generally regulated by economic considerations, so to what extent can one use water in order to be able to drive other economic imperatives (power energy for example)? Agriculture generally comes as a second consideration, for example, when building a dam, to what extent can one use that dam to drive hydro power? Also consider farmers – will they be able to have access to the dam ? By their nature, at some stage, water agreements need to take into consideration, the requirements of agriculture. The third imperative, is that agriculture itself is a sector premised upon trade. So if regional economic protocols around agriculture, and the conversations that happen within the agricultural sector between countries, are all premised on the extent to which we can encourage economic activity, then will this encourage exchanging trade? If there was an opportunity to exchange water for trade, would we be able to produce in Swaziland, as there happens to be rain in that specific area? Could we exchange what is produced in Swaziland for produce from other areas so that we begin to look at food security in a region, versus food security as a domestic imperative, and then change the agreements around water so that they focus on agriculture, food security and stability? There is an opportunity that is being missed in aligning regional agricultural priorities, trade agreements and water agreements with a three-way tripartite alliance.

If we look at the recent drought in South Africa, things would have been done differently if we had this in place. The question is would we have been able to mitigate the drought any differently by capitalising on the areas where people

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could plant and could produce effectively, rather than the impact it is now having on commodity prices (as volatile as they are)? There is work that really needs to be done in aligning trade, water and water rights, and the extent to which agriculture plays a very strong role in defining its space, and taking its rights to access to water, in order to be able to drive the sector.

South Africa is currently experiencing the worst drought in a century, and this is probably in the southern African region as well. The drought this year hit mainly the dry land crop production areas of corn, sunflower, etc. The next facet of this drought is going to be on high-value, irrigated crops, e.g. citrus, apples, pears, vineyards, etc. This heightening of the whole debate around water and the use of water resources is a focus area within the National Development Plan (NDP). Before the drought, the NDP stated that South Africa has about 1.5 million hectares of irrigated farmland, mostly for high-value crops, especially fruits and export crops that can be produced in this land. The NDP articulates that this can be expanded by 500 000 hectares, on condition that this occurs through savings and efficiency, and not through great water allocation.

The number one country with the least water per capita in southern Africa is South Africa (at about 1 100 and 10 cubic metres per person). Malawi is rated as the second country, with about 1 440, and that is available water. But like Malawi, the water is not available to people. These are the constraints that these countries experience and infrastructure also plays a big role. Namibia and Botswana are in a much better position than other countries, so this paradigm really needs to be looked at. The issue becomes how to manage the situation. South Africa and southern Africa need to rethink its water strategy, also around agriculture production. There is no doubt that a certain amount of agriculture production has to move to high water available areas, such as Zambia, Zambezi, etc.

In South Africa, the real issue around irrigation is going to be about efficiency of water usage. . South Africa will have to move to greater drip irrigation, which was pioneered primarily by the Israelis through Daniel Hillel. The Israelis have mastered this system and much of the Western Cape irrigation is already on drip irrigation, by far the most efficient system. Furthermore, through the NDP, the government has identified two new irrigation schemes for agriculture. The projects are allocated to black African farmers and women. This demonstrates that some projects consider inclusivity and reallocation of water, but largely the newer projects. These are the types of systems that need to be adopted to use water more efficiently. The whole issue around allocation and water use efficiency and how we try to meet the food demand will become critical in the future.

Other African countries, like Uganda, do not have many problems of irrigation, like South Africa; however, in 2005 Uganda suffered the worst drought ever. Uganda is generally an agricultural country, characterised by good soil and weather, and 80% of the population is involved in agriculture subsistence. The Nile River plays a significant role in the agricultural sector of Uganda. However, this is coupled with challenges of the colonial legacy, dating back to 1929, when a treaty was written and signed by the British that awarded Egypt veto power over any project involving the Nile. As a result, the rights of the Nile are really vested with Egypt, because the colonial-era agreements gave Egypt the biggest share of the Nile. So everything that related to the Nile River needs Egyptian approval, and Egypt is ready to go to war on the basis of those colonial agreements. The construction of the dam in Karumah was largely delayed because Egypt was being problematic. Ethiopia therefore, decided to go on its own and this has affected working relations. It is evident that trans-border projects are not easy to manage. This, coupled with working with various governments and sharing resources and infrastructure, adds to the challenges.

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PANEL 15 INVESTMENT IN AFRICAN INFRASTRUCTURE

MODERATOR: Paul Runge, Africa HousePANEL MEMBERS: Duncan Bonnett, Africa House Vanessa Snyman, KPMG Konrad Reuss, S&P Dow Jones Jonathan Berman, Fieldstone

KEY QUESTIONS:• What financial instruments are available?• How can project developers access funds for small and large infrastructure projects?• How can Africa foster a business climate and a development environment that increases the financial options available

to infrastructure project developers?

KEY POINTS:• The African infrastructure environment is becoming a great deal more complex • Decentralisation is an important factor in the success of infrastructure development• Funding sources are now differentiated according to the sector that they are financing • Private provision is growing and will be critical in improving efficiency and lowering costs.

SYNOPSIS:In the old days things were a lot more structured while today, things are a lot more complex.

Governments are looking at a much more integrated urban infrastructure development models. The goal is to create proper living spaces, which include integrated infrastructure and transport, as well as telecoms. These are critical in creating enabling business environments. In addition, there is also movement towards greener practices. Africa has a blank slate and the ability to move quickly; however, there is a lack of integration and corporation between countries. Cities were not planned to have such large populations and infrastructure is pressured. The solution requires clear allocation of responsibilities and municipal involvement. Governments need to transfer responsibility from the centre to municipalities. Although initially it may be costly, service delivery will improve.

The source of finance has changed over the years in relation to the four pillars of infrastructure development: telecommunications, water, energy and transportation. For telecoms, most funding comes from private investors, because construction risk is lower and revenue streams are more secure. Energy has become more attractive to private investors but there needs to be collaboration with government to put the proper regulatory structures in place. Water is still left to development institutions and governments, but we need to look at involving private investors. A lot of funding comes from China, especially for rail and road. Export credit facilities are increasing as well. Another key entrant is pension funds. They usually enter a project when it has begun implementation; however, there are instances where they fund up front. Development financing is another source, but developers are complaining that they aren’t providing enough financial support. There is also an immergence of special purpose acquisition companies listed on the Johannesburg Stock Exchange (JSE), which is an ideal vehicle for infrastructure development funding. US aid has also made significant contributions.

The struggle to finance projects is not unique to Africa. Infrastructure finance over the years has never lived up to its potential- perhaps due to regulatory uncertainty, complexity, high costs and a lack of understanding. Africa is not alone in its need for infrastructure so there is competition for the financing available globally. Africa needs to get more private sector investment and also needs to create domestic markets. In addition, Africa needs to look into building a pension fund industry that has an appetite for investing in long-term infrastructure projects.

A lot of the foreign financiers or project managers have never set foot in Africa, and therefore a lack of exposure to the complexity of building a plant, distribution, logistics, infrastructure, pricing and regulations, prevents them from understanding the operating environment. It is important for project promoters to know the environment.

Looking more specifically at the energy sector (energy is where the opportunity has been identified), these are the issues

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affecting investors.

Infrastructure financing has been disappointing because of institutional conservatism on the part of funders. Institutions have been slow to adapt to the idea of independent credit ratings. The issue with some deals is that you need government to guarantee an off-take for the project to be deemed bankable. Many governments simply cannot absorb that risk. There is a need to look at other models. Perhaps exploring deals that are backed up by other institutions, or looking at deregulating the power industry.

The second issue involves local currency. There is local currency funding in South Africa (rare in Africa). The continent has to move away from borrowing dollars because this model is not sustainable.

Thirdly, there is huge technological change. The advancements that are being seen will enable much cheaper power, and also much smaller and modular power. It is going to be interesting to see how fast the move towards off-the-grid power will be. The model that has succeeded, relates to the retail household level, which is consumer financed. Private provision will be critical in improving efficiency and lowering costs.

Where the public sector is concerned, in order to accommodate the low income demographic, there needs to be collaboration with government and perhaps the structuring of a model where a predetermined wattage of power is freely provided. Currently, companies undertaking infrastructure projects are under immense pressure to rollout CSI projects. What is important is a well-designed and transparent regulatory framework, with the help of the private sector involved in making this change.

In order to build infrastructure expertise and capacity, there needs to be a pipeline of bankable projects. One big project is not enough to entice private investors to invest in building capacity.

There is a need to understand that the delivery of infrastructure is changing the face of the continent. It is an enabler for many other things. It cannot be assumed that nothing is happening. The continent is opening up right now. Although there is a tendency to focus on the challenges, there is positive change. Opportunities are rife and people are willing to make it work. Regulation remains the challenge in unlocking some opportunities.

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PANEL 16 SKILLS DEVELOPMENT FOR MORE INCLUSIVE INFRASTRUCTURE

MODERATOR: Dr Bola Olabisi, Women in Entrepreneurship, Infrastructure and Sustainable Energy Development (WEISED) PANEL MEMBERS: Dr Sunita Pitamber, African Development Bank (ADB) Asfaw Kidanu, International Labour Organization (ILO) South Africa Mike Mulcahy, GreenCape Hema Vallabh, Women in Engineering (WomEng) Dr Tabarak Ballal, University of Reading

KEY QUESTIONS:• What are the lessons learned from financiers, companies, government, international organisations and civil society to

make infrastructure investments more inclusive? • Why have some projects led to sustainable business generation for local communities, while others have not? • How should projects be structured from the outset, and who has to be included in the preparation? • Which monitoring and accountability mechanisms have to be applied to ensure the projects contribute to the

attainment of the Sustainable Development Goals (SDGs) and Agenda 2063 of the African Union?

KEY POINTS:• The African Development Bank is investing in infrastructure in fragile states to assist with building cohesion and unity.

Gender equality is a condition for all its projects • Governments need to update their policies and laws to enable inclusivity • Company leaders need to change their mind sets regarding inclusivity for this to become accepted practice in the

infrastructure industry • The training of skills that are needed for building and maintaining new infrastructure, such as renewable energy, is risky

but highly necessary.

SYNOPSIS: The ADB holds projects for about USD40 billion across Africa. Infrastructure is a big priority, with skills development being done within them, addressing that specific infrastructure. It is the ADB’s responsibility to ensure that at least 50% of skills are targeted to women. Most projects are in remote rural regions so that inclusivity is also by regional diversity. It has, for example, started a programme in Eritrea to train women in technical vocations, and also to train teachers to encourage female learners to get involved in science and technology. The ADB focuses on supporting countries that are coming out of conflict and affected by crisis and fragility. Gender equality is a requirement for all projects in all their aspects. In these countries, they need to ensure that there are equal socio-economic investments in all the regions, especially those that did not receive development before the conflict, as this is often a source of the conflict. The ADB has a dedicated facility to support financial investments in fragile states.

ADB recently launched a Jobs for Youth in Africa strategy. The ADB decided that it is not enough to provide investment infrastructure development, but that there has to be an outcome that is related to jobs. It argues that all investments, from the ADB, development partners and the private sector, should be able to create those jobs because jobs are the priority. There are about 11 million new entrants into the market with only three million new jobs being created. That means there are about eight million youth who cannot find employment or who have jobs that are not meaningful or decent. The ADB thus aims to help create 25 million jobs in next 10 years and help equip about 50 million youth with the right skills and knowledge to generate their own economic opportunities in terms of entrepreneurship.

The ADB needs to work with governments to address their laws and policies that create bottlenecks to the creation of jobs for youth. In addition, the ADB sees it as necessary to increase its investment in creating skills in three key sectors: agriculture, information and communication technology (ICT), and industrialisation and diversification. This means granting the necessary technical knowledge, providing appropriate funding, and providing mentoring and coaching to assist youth and women to take these opportunities. The ADB is proposing Skills Enhancement Zones to help youth obtain , not only industry specific skills, but also skills in business management, financing, procurement and many other related areas.

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WomEng was founded to support women pursuing and remaining within engineering as an education and as a career. They have developed programmes at various levels to provide women engineers with the critical skills they are not receiving through their normal studies, and to enable them to better assert themselves in a very male-oriented environment. At school level, they inform female learners about engineering, and how and why it can be attractive to women. At university levels, they have programmes to provide women in engineering with entrepreneurship and business up-skilling skills. At industry level they provide platforms for dialogue and assist them with skills to assert themselves and begin to lead in a male-dominated sphere. WomEng aims to give women assistance so they can play active, cooperative roles in infrastructure projects and, in the end, to build their own companies.

There are two further core challenges to women in infrastructure jobs. First, leadership in companies, which is often still male, needs to change its mindset. Leadership needs to embrace a gender-inclusive approach to employment and skills within companies; otherwise those in lower levels will not follow and adopt this approach. Secondly, society is still strongly biased against women in infrastructure jobs and against women in jobs altogether, seeing it as their roles to look after a family. So WomEng looks at these peripheral issues, because it is these that cause female talent to exit the industry, rather than a lack of technical education and training.

Infrastructure development can stimulate economic activity and can be a catalysing factor for peace and stability in a country by creating assets, creating employment and by stimulating the local economy. It creates opportunities for learning and transferring skills. Many countries implement infrastructure investment to jump start economies during recession, civil unrest or after natural disasters. The ILO thus supports infrastructure development as a means to address social and environmental challenges across the world. The ILO promotes decent work for all, done freely and carried out in a safe physical environment, within the framework of the recognition of the rights of workers. The ILO engages more widely with assisting and guiding governments around employment from many different aspects: preparing decision tools, capacity building, developing standards in procedures, assistance with coordination and implementation of programmes, formulating and designing project work.

The ILO observes that training provided in infrastructure projects tends to be short term and project based, and not integrated into national plans for education. Training provided by development partners and institutions in infrastructure development is often too theoretical, does not provide practical experience and thus does not meet the needs of the sector.

The type of skills required for a project needs to coincide with the infrastructure being built. Skills typically have the longest lead time to ensure that the right skills are available at the right time. It involves early-stage development risk, at a time when many projects still fail. It is at this point that the South African Renewable Energy Technology Centre (SARETEC), based at the Cape Peninsula University of Technology, was founded in 2009 in cooperation with the German Development Agency (GTZ, now GIZ) and the Western Cape government, in order to take the risks of developing the centre, to provide the skills for the renewable energy sector when they would be required. To improve this training, GreenCape is involved in supporting SARETEC to accredit its training courses and to tailor them for specific Original Equipment Manufacturers (OEMs) so that appropriately skilled people can walk onto a site and be entrusted with maintenance, without requiring long and costly in-house training. The basic skills are highly transferrable to other sectors within the energy industry, so that if one type of infrastructure roll out never happened, they could be easily applied elsewhere.

There are two particular shortcomings in infrastructure projects in terms of delivery and design. First, in infrastructure projects, there is often a complete lack of engagement with local people who are directly impacted by the projects being delivered in their areas. Even when community consultations take place, it is often the voices of women and youth that get ignored. There is a lot of work required in terms of knowledge transfer and raising awareness and communication with local communities. Research has shown that the first 20% of decisions made in the life of a project account for 80% of the resources allocated. So if the voices of key stakeholders are ignored, this can have significantly adverse impacts on projects. Second, communities are not engaged in the delivery of the project (the design, planning, construction, operation, and maintenance stages). Here skills that are required, need to be identified, after which women and youth need to be up-skilled and receive on-the-job training, in order to deliver those skills. Too often foreign companies design and construct projects that do not engage in joint ventures with local firms, to transfer knowledge, skills and technology.

In March 2016, there were 11 210 youth jobs in the renewable energy sector in SA, based on numbers provided by the

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Department of Energy. The plan is to build 17.8 GW by 2030, which will add a significant number of more jobs for youth. What SARETEC has noted is that its curricula are becoming international curricula. This is an opportunity for SA to export skills to other regions. There is a large commitment from OEMs for the development of skills, with funding and support. GreenCape takes high school learners and educates them on the opportunities in the sector of renewable energy. It also works with industry associations and local training authorities to work towards functional curricula, as well as certifications for electricians to install small rooftop photovoltaic installations. The renewable sector is very labour absorbing, so these skills would allow this to take place.

There are numerous challenges to training, however, in contrast to the SARETEC experience, sectors are often subdivided, so that training is very specific to particular sub-disciplines and sub-sectors. However, it means that there is no space for skills development or growth paths. Secondly, tertiary institutions and technical colleges are too theoretically orientated, so that the graduates emerging from them do not have marketable skills. They still need to be trained on the job. Thirdly, the courses offered are not aligned with sector needs. Interventions offered by governments for training are often not growth oriented and do not have the growth paths of trainees in mind. Lastly, in many African countries governments have reduced in size and are outsourcing work to the private sector. However, the private sector is not taking on the responsibility of training, not even for their own needs; instead they recruit people from the public sector.

There are very practical measures in terms of gender inclusivity: female toilets, female-sized safety clothes, etc. Companies with women leadership regularly outperform companies with only male leadership. Women are decision makers in the economy, so their needs have to be taken into account. For whom are things being designed? How will they be used? The private sector also has to think about what the impact to GDP would be if they are more inclusive, because it can only grow the economy. Women in the developing world spend 90 cents of a dollar on other things rather than themselves, such as health, education, and transport. So they need to be taken more seriously. .

Public investment on infrastructure is a good instrument that governments have, and which can be used to integrate socio-economic and environmental objectives. However, the public sector is also a major employer in the infrastructure building and maintenance, so they have the influence to chart the way. To use this positively, certain factors need to be in place. First, there has to be appropriate macro-economic policies; secondly, the appropriate technologies are needed as it is not one-size-fits-all; thirdly, PPPs have to be nurtured, because ultimately the private sector is the job creator; fourthly, favourable procurement systems are required, and lastly, in order to align with the SDGs, one has to look at how to mainstream environmental and other social issues together with everything that is being done.

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PLENARY PANEL 2 WHERE IS AFRICAN INFRASTRUCTURE DEVELOPMENT HEADING?

MODERATOR: Dr Mzukisi Qobo, Tutwa Consulting Group PANEL MEMBERS: Nicholas Mitsos, China Overseas Infrastructure Development and Investment Corporation (COIDIC) Guang Zhe Chen, World Bank South Africa Karl Fickenscher, PowerAfrica Moe Shaik, DBSA Colin Coleman, Goldman Sachs

KEY QUESTIONS:• What are Africa’s growth prospects and economic forecasts?• What reports, data and figures that are relevant to the continent’s future build programmes?• How is it possible to incorporate climate resilience into infrastructure planning?• How can programmes Incorporate gender empowerment into future planning?

KEY POINTS:• PowerAfrica is a US government-led initiative to build infrastructure to bring energy to Africa • There is a funding gap to build energy infrastructure • Infrastructure building needs to incorporate maintenance right from the beginning to make it sustainable • The reliance by African countries on the export of single commodities or raw materials makes them very vulnerable • The China Development Bank is bringing a lot of capital for early project development into Africa, which will allow a

speeding up of the financial closure of projects and their implementation.

SYNOPSIS:Infrastructure is the centrepiece for Africa’s continent. There are about 600 million Africans without access to electricity and, moreover, the entire region has an installed generation capacity equivalent to Argentina’s lack of infrastructure cripples Africa’s growth prospects. Infrastructure funding on the continent is around USD93 billion per year until 2020, and 40% of this is for power. Of the USD93 billion, USD68 billion represents sub-Saharan Africa’s funding gap. If the continent would recover the approximately USD50 billion in illicit financial flows; this could go a long way towards closing this infrastructure gap. In 2012, African leaders adopted the Programme on Infrastructure Development in Africa as a strategy framework to run until 2040, to build cross-border infrastructure, ICT, energy, transport, trans-boundary water resources. The purpose is to strengthen consensus and energy on large cross-border infrastructure projects. This has led to increased support, initiatives and financial vehicles.

PowerAfrica is a US government-led initiative to build infrastructure across the continent to power up Africa, to add 10 000 MW of new generation power and 20 million business and household connections. This was tripled in August 2014. The focus is on all of sub-Saharan Africa. This infrastructure can only be tackled by creating PPPs with the private sector in the lead. It can mobilise US government tools in terms of funding and technology to assist with getting the projects off the ground. It deploys transactional advisors to facilitate African governments to identify infrastructure projects that have got stuck to push them forward and find solutions to the problems encountered. Their aim is to get more bankable deals. The projects reviewed are both on- and off-the-grid: 30–35 million connections will be through the grid, but for the rest it does not make economic sense for on-grid provision. Therefore, efforts have to be concentrated on off-the-grid solutions.

For the World Bank, poverty reduction and attacking inequality are central objectives. There are several challenges to this. One of the main issues is the funding gap. The new SDG in terms of energy is to provide universal access by 2030. At the current investment rate, even including PowerAfrica’s programmes, is not sufficient to achieve the goal on time. So financing is a key issue. To achieve the goal, Africa needs to add 6–7 GW of power per year, where at the moment it is only adding 1–2 GW of power per year. There is a huge scope for both public and private financing; however, at the moment most money comes from governments. Innovative ways for mobilising funding for power, but also water, transportation, etc., is critical.

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A second challenge is the necessity for infrastructure to be sustainable: maintenance needs to be included right from the beginning, which includes how to finance it, but this is often not done. Thirdly, the institutions that manage infrastructure, the power and water utilities, for example, are mostly managed by public organisations with low levels of efficiency and effectiveness.

A further challenge is that many African countries are too dependent on one commodity, and it uses the rents from that commodity for building infrastructure. This makes the building of infrastructure dependent on the economic position of this commodity. There is a critical need to diversify to other income streams. Infrastructure is built for a purpose: to facilitate the kind of movement of people, goods and services. But it needs to move beyond the core infrastructure – a road or an electricity line – to the cluster infrastructure around it. We want infrastructure to boost sustainable inclusive growth in countries.

There is a call for DFIs to become sustainable; that they manage their resources well and also that they can only get revenue from investment. This pushes the DFIs increasingly into the investment banking space. This does not help the overall infrastructure development agenda.

There is sincere concern about the pace of progress that Africa is making in addressing infrastructure backlogs. It has taken several steps backwards in the last 12 months, towards post-colonial behaviour. There are countries who have reneged on the shared African aim of respecting multiparty democracy, respect for the constitution and electoral process, and aiming to grow the economy within the last year. A year ago, Goldman Sachs was able to mobilise significant sovereign wealth for investment in infrastructure projects in Africa, which has currently slowed down significantly. In other countries, the convertibility of finance and the movement of goods is very difficult, making it difficult to get money and goods in and out of a country, and even of determining the conversion rate. This was not the case a year ago. The private sector does not flourish well in this environment.

The China Development Bank (CDB) is the world’s largest development bank with about USD2 trillion in assets. The China Africa Development Fund (CAD Fund) is a subsidiary of the CDB and makes equity investments in projects in Africa, mostly in minority investments. Over the last seven to eight years, it has had 85 projects in 34 African countries; it invested over USD3 billion of its own cash, representing about USD30 billion of total project capitalisation. The CAD Fund and the CDB together are the largest investor group in Africa. The aim is to increase this investment to USD100 billion of total capital.

The CDB gradually wants to shift, from mining to essential infrastructure and energy in Africa, but there are not many projects ready to go. To assist with this, the CDB founded the China Overseas Infrastructure Development and Investment Corporation (COIDIC), an early stage development fund, which prepares projects for the financing to come in. The CDB has committed USD500 million to it, for Africa.

COIDIC’s focus is on three areas. The first is to promote infrastructure (ports, railways, telecommunications, and transmission of electricity) that promotes intra-African trade. This includes building cross-border infrastructure. Africa as a continent has very little internal trade between African countries because a lot of the existing infrastructure was built for the export of raw materials. The second is urbanisation: Africa will double in population over the next 35 years and cities will double and triple in size; there will be a need to create urban areas for much bigger populations. China has done that. Over the last 35 years it has shifted 500 million people to urban areas. They have a lot of experience.

The lead shareholder of COIDEC is the CAD Fund. Among others are China Rail, China Gezhoub (developer of big power plants), China Minmetals, and China Telecom. COIDEC’s goal is to develop and bring projects to completion and, once proven and de-risked, to sell them in order to exit to the OECD institutional investors. Institutional investors will not put their money into early-stage or green-field projects in Africa unless there are exceptionally favourable terms.

African projects are not bankable. Bankability is a Western concept, but it is a different environment in Africa. In Africa, for a project to be bankable, it needs World Bank insurance, which makes projects very slow. The CBD shifts the questions from bankability to one of how to get OECD private investors and institutional investors to allocate more money to Africa. It looks rather at investability. The CBD is willing to take this risk because it knows that, at completion, there are vast funds likely to be available to buy these at a profit.

China developed from a poor country to a middle-income country within 35 years. For this, it did not base its development

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on the export of raw materials, the Western model of development in Africa, which has been proven not to lead to a sustainable economy. Instead, it invested heavily in infrastructure to support manufacturing: ports, railways, industrial development zones (IDZs). China has a lot to show and help African countries to move away from an extractive and export based economy.

The thinking about infrastructure development presented in this panel needs to draw much more strongly on the preceding panels at this conference on inclusivity, both in terms of gender and youth, and on the critical necessity of transferring skills.

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CLOSING KEYNOTE ADDRESS

SPEAKER: Admassu Tadesse, Eastern and Southern African Trade and Development Bank (PTA)

The conference began with a revisitation of the imperative of infrastructure development and the challenges this poses, such as structural issues, currency issues, structural issue of savings, lack of local savings, institutions and skills, efficiency, and accountability.

While the need for infrastructure is not new, the environment and context for it has changed: growth is significantly lower today than a year or two ago; the terms of trade have moved against African exporters; new controls have been imposed; tightening of external, and domestic financial conditions, in addition to increased interest rates, and exchange rate impacts.

The narrative of Africa rising has been muted because of shocks in a number of countries that have affected the export of specific commodities, in turn, affecting investments.

The conference has expressed a critique with the inadequacy of a resource-led approach to development, and the vulnerability that comes with that approach to development. It emphasised the necessity of diversification, and the necessity of building infrastructure that is integrated, inclusive and sustainable. Integration involved links to industry, ensuring productivity of that infrastructure, ensuring that it is useful, including the links to urban development and housing and the regional integration issues, all of which are ever more important, but very difficult to ensure The inclusive aspect was the gender consciousness that needs to come through more clearly, not only in terms of skills transfer, but also the social linkages that come with a gender conscious approach. Sustainability involves sensitivity to the environment.

There is a need to take a longer-term approach to infrastructure development, despite the enthusiasm around the viability and importance of infrastructure. There is a need to invest more upstream in the process, resourcing at the level of project development; ensuring the institutional environment necessary for partnerships to be able to take off. To get the private capital to come in, a lot more needs to be done upstream. The new initiative of the China Overseas Infrastructure Development and Infrastructure Company will help put more resources where they are badly needed.

The sense at the conference was of partnerships worldwide, that infrastructure development is not a zero sum game, but a win-win approach. African institutions become very important in all of this; African financial institutions play an important role in creating trust and ensuring that the right perspectives come through, and that discipline is imposed.

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CLOSING REMARKS

SPEAKER: Geraldine Fraser-Moleketi, ADB

This was the fifth summit on infrastructure development and included the first inclusive infrastructure summit in Africa ever. There were strong plenaries and panels with highly-experienced men and women, with an all-woman opening panel. The conference attempted to break the mould, issuing challenges to the pace at which things are being done and how they are being done. There were several situations of women speakers being the first female experts and leaders in various organisations and positions. The conference succeeded in bringing in people from infrastructure companies who would not normally talk about issues of inclusivity, demonstrating how it really is necessary and what impact it would make. The ADB will follow up on what was presented at the conference by visiting companies and infrastructure projects around the continent.

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