2016 Africa PPP Conference and Exhibition Post Show Report

Radisson Blu PoRtman Hotel | london, uK24-26 OCTOber 2016

ConFeRenCe & sHoWCase

Official carrier eXHiBiTOr

BrOnze SpOnSOrGOlD SpOnSOrplaTinUM SpOnSOr

www.africappp.com

DeLIVerING INFrASTrUCTUre PPPs FOr SUSTAINAbLe AND INCLUSIVe GrOWTH

CPD-CerTIFIeD Pre-CONFereNCe TrAININGMANAGING PPP CONTrACTS FOr VALUe & IMPACT

POST SHOW rePOrT

8AFrICAth www.africappp.com

@africappp #africappp

POST SHOW

rePOrT

STATEMENT FROM THE ORGANIZING COMITEE ..................................................................................... 02

EVENT ATMOSPHERE IN PICTURES ............................................................................................................... 03

AFRICA PPP 2016 IN NUMBERS ....................................................................................................................... 04

SPECIAL FEATURES ............................................................................................................................................... 05

SPEAKERS ................................................................................................................................................................... 06

CONFERENCE PROGRAMME ............................................................................................................................... 08

TESTIMONIALS ......................................................................................................................................................... 10

ACKNOWLEDGEMENTS ........................................................................................................................................ 12

OFFICIAL CONFERENCE ExECUTIVE SUMMARy ..................................................................................... 14

PRESS COVERAGE ................................................................................................................................................... 22

CONTENT

STATEMENT FROM THE ORGANIZING COMITEE

The 8th edition of the africa ppp was a resounding success with 42 speakers, 148 delegates from 23 countries in attendance. Highly interactive discussions took place around the future development of PPP projects in Africa that can and will enhance social and economic growth across the continent.

The key message throughout was the need to increase and reassess the level of partnerships across the board to build a deeper sense of trust, cooperation and collaboration.

Thank you to all our sponsors, speakers, delegates and partners! Without your support, this event would not have been possible. We look forward seeing you at the 9th Africa PPP event, where we aim to include updates on the development of the PPP project pipelines, host additional one-on-one meetings and increase the involvement of PPP units & project developers from across Africa.

On behalf of AME Trade and the Africa PPP team

Emma Sayers Senior Conference Producer

02www.amEtradE.org / africappp



POST SHOW

rePOrTEVENT ATMOSPHERE IN PICTURES




POST SHOW

rePOrT

04

CAMEROON COTE D’IVOIRE EGYPT ETHIOPIA FRANCE GHANA INDIA JAPAN KENYA MALI MAURITANIA MOROCCO NIGERIA SENEGAL SINGAPORE SOUTH AFRICA SPAIN SWITZERLAND TURKEY UGANDA UK USA ZAMBIA

SPEAKERS SPONSORSMEDIAPARTNERS

DElEgATES COUNTRIES

41 15 3

148 23

AFRICA PPP IN NUMBERS

PARTICIPANTS’ BREAKDOWN

MAP OF PARTICIPATING COUNTRIES

www.amEtradE.org / africappp



POST SHOW

rePOrT

CPD-CERTIFIED PRE-CONFERENCE TRAINING Managing PPP Contracts For Value & Impact

As part of our on-going commitment to training programmes within the PPP arena, we hosted a CPD certified one-day training workshop on Managing PPP Contracts for Value and Impact at the 8th Africa PPP Conference & Showcase.

During this highly interactive workshop, delegates gained insights into understanding the challenges of managing PPP contracts, risk allocation, performance management frameworks, contract management structures, as well as how to managing unsolicited bids.

SPECIAL FEATURES

The expert facilitators included:

gori oluSina daniEl lead transaction advisor africa ppp advisory

chinyElu oranEfo Senior associate, Banking & finance, real Estate, nabarro llp

JamES aiEllo Senior project advisor, ppp unit, national treasury, South africa

chidi K.c.izuwah Snr icrc, federal republic of nigeria

The room was full to capacity and lead to informative and proactive discussions throughout the day.

05

INVESTABLE INFRASTRUCTURE PROJECTS

ROUND-ROBINA new addition to the Africa PPP programme was the introduction of the Investable Infrastructure Projects Round-Robin session.

During the pre-booked on-on-one meetings, potential investors, funders and project developers took the opportunity to speak further with PPP Units from Kenya, cameroon, nigeria, uganda and ghana. The Zambezi River Authority’s Chief Executive Officer was also on hand to showcase the Batoka gorge hES project.

Companies used this time to ascertain additional information and discuss possible funding and development of the relevant bankable PPP projects pitched during earlier in the day.

36 meetings took place during the round-robin and generated new contacts for growing partnerships.



POST SHOW

rePOrT

06

gORI OlUSINA DANIEl leaD TranSacTiOn aDviSOr, africa ppp aDviSOry

CyPRIAN MAROwA General ManaGer infraSTrUcTUre finance anD fUnDS inveSTMenT, DevelOpMenT Bank

Of SOUTHern africa (DBSa)

ChINyElU ORANEfO SeniOr aSSOciaTiOn, BankinG & finance, real eSTaTe, naBarrO llp

JAMES AIEllO SeniOr prOjecT aDviSOr, ppp UniT, naTiOnal TreaSUry, SOUTH africa

TOM MINNEy african GrOwTH parTnerS lTD

MAhAD AhMED fOUnDer anD ManaGinG DirecTOr, aMe TraDe

ANAS ChARAfI inveSTMenT Officer, africa50

ANgElA NAlIKKA ManaGer, infraSTrUcTUre finance anD ppp DiviSiOn, afDB

ChRISTOPhER MIllwARD SeniOr UnDerwriTer, acTinG reGiOnal HeaD, eUrOpe anD Mena

MATThEw REES DirecTOr Of THe Office Of parTnerSHipS, pOwer africa, USaiD

AbOUbACAR gUISSé TecHnical aDviSer On leGal iSSUeS anD inSTiTUTiOnal, MiniSTry Of inveSTMenT prOMOTiOn anD

privaTe SecTOr, Mali

ENg ZIRIA TIbAlwA waakO, DirecTOr, TecHnical reGUlaTiOn, elecTriciTy reGUlaTOry aUTHOriTy, UGanDa

ATTER EZZAT HannOUra, DirecTOr, ppp cOnTrOl UniT, MiniSTry Of finance, eGypT

ANA hAJDUKA fOUnDer & ceO, africa GreencO

ChIDI K.C. IZUwAh Snr eXecUTive DirecTOr, THe preSiDency, infraSTrUcTUre cOnceSSiOn reGUlaTOry cOMMiSSiOn, niGeria

JACK vAN DER MERwE cHief eXecUTive Officer, GaUTrain

PAUl hORROCKS leaD ManaGer, privaTe inveSTMenT, OecD

ROMAIN Py HeaD Of TranSacTiOnS, aiiM (african infraSTrUcTUre inveSTMenT ManaGerS)

wIllIAM MIChAEl DAChS cHief OperaTinG Officer, GaUTrain

EKOw COlEMAN SeniOr inveSTMenT Officer, GHana infraSTrUcTUre inveSTMenT fUnD (Giif)

JINg lI SeniOr inveSTMenT Officer, infraSTrUcTUre finance anD ppp DiviSiOn, afDB

SPEAKERS




POST SHOW

rePOrT

07

ShEIlA gAllOwAy GrOUp cHief eXecUTive Officer, UTHO capiTal

NAOll MARy cOUnTry ManaGer, eGypT, fcc aqUalia

KwEKU KORATENg SeniOr inveSTMenT Officer, infraSTrUcTUre finance anD ppp DiviSiOn, afDB

STANlEy KAMAU DirecTOr, ppp UniT, MiniSTry Of finance, kenya

DIEUDONNE bONDOMA yOKONO preSiDenT, SUppOrT cOUncil fOr THe realiSaTiOn Of parTnerSHip cOnTracTS

(carpa), caMerOOn

bEATRICE flORAh IKIlAI acTinG DirecTOr, ppp UniT, MiniSTry Of finance, planninG anD ecOnOMic DevelOpMenT

UGanDa

lIESEl lOMbAARD cHief DirecTOr, GaUTenG infraSTrUcTUre financinG aGency

MARK flOwER DirecTOr, flUOr, SOUTH africa

PARITOSh gUPTA cHief eXecUTive Officer, il&fS

TONy ClAMP ManaGinG DirecTOr, cOMpaSS infraSTrUcTUre

JUNglIM hAhM reGiOnal prOGraM leaDer, eaST & SOUTH africa, MiDDle eaST, pUBlic privaTe infraSTrUcTUre

aDviSOry faciliTy (ppiaf)/wOrlD Bank

JOhN SEED HeaD Of infraSTrUcTUre finance, eUrOpe, rUSSia & africa, MOTT MacDOnalD

AlEx KATON eXecUTive DirecTOr, infracO africa

ENg. M C MUNODAwAfA cHief eXecUTive Officer, zaMBezi river aUTHOriTy

JOAN MIqUEl vIlARDEll parTner, alG GlOBal

fRANçOIS SERRES lawyer, francOiS SerreS & aSSOciaTeS

hANNES vAN wyK ManaGinG DirecTOr, TOll infraSTrUcTUre ServiceS

JACqUElINE ODOUlA-lyAKURwA acTiviTieS cOOrDinaTOr, african DevelOpMenT inSTiTUTe, african DevelOpMenT Bank

PETER RObINSON DirecTOr fOr africa reGiOn, ecOnOMic cOnSUlTinG aSSOciaTiOn (eca)

JOANNE fOlEy eXecUTive DirecTOr, williS TOwerS waTSOn

hElEEN gOSSARD aSSOciaTe, riScUraw

SPEAKERS




POST SHOW

rePOrT

08

Monday • 24th OCTObER pre- cOnference TraininG

MANAgINg PPP CONTRACTS fOR vAlUE AND IMPACT | cpD certification (pre-registered participants only)

Tuesday • 25th OCTObER cOnference Day 1

registration and welcome coffee

Official conference Opening and plenary Session

welcome remarks : Angela Nalikka, Manager, infrastructure finance and

ppp Division, african Development Bank (afDB) Chris Millward, acting regional Head, europe &

Mena, MiGa Anas Charafi, investment Officer, africa50 Matthew Rees, Director of the Office of partnerships,

power africa, USa

coffee Break

SESSION 1: hARMONISATION IN PPP POlICIES AND REgUlATORy fRAMEwORKS

Session focus: Africa’s infrastructure can be improved by public and private pooling financial resources and expertise to advance much needed infrastructure projects and delivery of basic services. However, governments need to simplify PPP policies, set standards and develop solid legal frameworks for PPP readiness. Panellists on this session will discuss current PPP policies, what is working and what needs to be improved on to encourage more public-private partnership developments focusing on the High 5 priorities.

SESSION 2: INvESTINg IN INfRASTRUCTURE – fINANCINg PRIORITy PPPS

Session focus: Africa’s infrastructure gap is estimated at a cost of US$90bn per annum, around the crucial areas such as energy, agriculture, industrialisation, cross-border integration, and social and economic improvements. During this session, speakers will discuss the different sources of funding available for PPP projects and the criteria needed to ensure that the project will produce sufficient cash flow to service the debt.

luncheon

SESSION 3: bEST PRACTICE SCENARIOS - SUCCESSfUl PPPs IN AfRICA

Session focus: Africa is achieving many successful PPP projects as skills and capacity improve and examples of best practice and lessons are shared across the continent. The Gautrain in South Africa is a good example of what PPP can achieve in transforming cities and lives, and is busy readying for further expansion. This session will highlight leading PPP success stories across the continent and discuss how lessons learned are best shared.

SESSION 4: fOcUS SeSSiOn PROJECT PITCh Of INvESTAblE INfRASTRUCTURE PROJECTS

Session focus: PPP Units and Government Entities from across Africa will highlight their pipeline projects that are in development phase or near financial close and showcase their offerings directly to project developers and investors alike.

coffee Break

SESSION 5:

close of Day 1 proceedings

Official cocktail reception – Sponsored by AfDB

During this interactive session, potential investors, funders and project developers will have the opportunity to speak with the PPP Units and Government Entities directly in a round-robin format. Companies will be use this time to ascertain additional information and discuss possible funding and development of the relevant PPP projects pitched in the previous session.

South Africa has aggressively been working towards increasing infrastructure PPPs – including renewable energy, transport, roads amongst others. During this interactive debate, panellists will delve into the strategies being implemented to foster development for the benefit of the country and communities alike.

INvESTAblE INfRASTRUCTURE prOjecTS rOUnD-rOBin

SOUTh AfRICA fOCUS panel DiScUSSiOn

PROGRAMME




POST SHOW

rePOrT

09

Tuesday • 26th OCTObER cOnference Day 2

KEyNOTE ADDRESS: lESSONS fROM INDIA – ThE wORlD’S lARgEST PPP MARKET

Session focus: India has been actively providing various African countries with support and advice on PPPs in Infrastructure projects. This session will showcase developments in India over the last few years in innovative investment vehicles for financing of infrastructure, the systems in place that have made India a leader in operationalizing PPPs, options for PPP structures, the lessons learnt by India. It will also provide guidance to participants on the important issues such as design of PPP policies and approaches for capacity building at the public sector.

SESSION 6: PROJECT PREPARATION fACIlITIES ROlE IN ACCElERATINg A PIPElINE Of bANKAblE PPPs

Session focus: Project Preparation Facilities have been created to coordinate efforts for the support of national and regional infrastructure development in Africa and assist in preparing, structuring and placing PPPs in the market to attract private sector investment and prioritize infrastructure projects with regional cooperation, sustainable development, and climate change elements.

coffee Break

SESSION 7 wORKINg TOwARDS INTEgRATINg AfRICA’S PRIORITy PPPs

Session focus: Taking an integrated approach to infrastructure mega projects is vital for the industrial and social development of Africa as a whole.

13:00 luncheon

SESSION 8 SOCIAl AND ECONOMIC CAPACITy bUIlDINg – TOOlS TO IMPROvE qUAlITy Of lIfE fOR ThE PEOPlE Of AfRICA

Session focus: Inclusive growth is essential for the long-term success of PPPs, because the “public” part of the partnership involves popular and voter opinions. People need to feel their expectations are being met and they can see concrete results and improvements. Community resistance can block PPPs or prevent them operating effectively. This session reviews best practice for PPP projects in engaging communities and ensuring they understand the long-term benefits, and can witness improvements to their livelihoods, skills and capacity building, and opportunities via:

• Supporting technological transfer and capacity building

• Accelerating social and economic growth

• Shaping PPPs to lead to inclusive growth

• Promoting entrepreneurship

coffee Break

SESSION 9 lIvE STREAMINg Of DEbATE: RISK AND REwARD – why PPPs NEED TO CONTINUE TO gROw

• Effectively combining the strengths and resources of both the public and private sectors

• Continued refinements in the PPP process

• Managing and Mitigating Political and Commercial Risks

• How to ensure public sector obtains value for money from PPPs

• What can Africa learn from successes/failures of PPP programmes across the globe?

• Where to from here?

conference roundup and overview of outcomes

PROGRAMME




POST SHOW

rePOrT

The event gave us the opportunity to meet with the decision makers and champions from all the African countries that are here in one conference - that really attracted us to be involved and partner with Africa PPP Conference. The conference was well organised at a very convenient, just networking with all made it worth the effort.

DBSA is a development finance institution with aspirations to profile itself as the development partner in the Africa region and is a partner of choice of financing the PPP projects, therefore Africa PPP conference is considered as a creative platform to meet and share experiences with other DFIs with the highest level of concentration of skills and experience where experts are showcasing the PPP success stories. Africa PPP Conference is the right sort of platform for DBSA to support.

CyPRIAN MAROwA General Manager infrastructure finance and funds investment, Development Bank of Southern africa (DBSa)

ANgElA NAlIKKA Manager infrastructure & ppps, afDB

It was a very enriching experience as usual. The networking sessions provided for a rich source for business.

What I like about the Africa PPP event is the enthusiasm of the banking sector to invest in PPPs and the expertise of the transactions advisers and that it covers the whole life cycle of the PPP project. Africa is a very difficult continent; it has the English and French speaking sections - so how do you convey the message to both sides? You have to have the exponential learning where you learn from other people and could exchange ideas. At Africa PPP conference, we share what worked and what did not work with our PPP projects.

JACK vAN DER MERwE chief executive Officer, Gautrain

hANNES vAN wyK Managing Director, Toll infrastructure Services

The event emphasised 4 key outcomes for African PPPs: 1. how to close the funding gap in africa ppps was clearly established at this conference. 2. project preparation is a vital tool for unlocking the development of the infrastructure via the ppp procurement mechanism. 3. community or public participation in ppp projects is of crucial importance. 4. the need to standardise the ppp framework across different countries because as an investor you do not want to face different frameworks

TESTIMONIALS




POST SHOW

rePOrT

The conference has been consistently insightful since its inception.

Africa PPP Conference is extremely important because it digs into issues which people in boardrooms do not like to discuss. But this event brings the issues out, it brings the experiences and pitfalls which ‘beginners’ should be aware of. The quality of discussions is mindboggling.

ENg. MUNyARADZI MUNODAwAfA chief executive Officer, zambezi river authority

EDwARD KAbwE Director - finance, zambezi river authority

We had a great experience at the Africa PPP Conference in London. It has added tremendous value to our business as ZRA, particularly the Batoka Gorge HES Project.

It was wonderfully prepared, lots of knowledgeable participants in the entire value chain for PPP. List of the PPP projects (operational, at construction stage, design and feasibility study stage) which enables the governments to appreciate the progress in other countries, developers and sponsors to identify the potential areas for investment. I liked the standard outline for the presentations to show case of the current PPP projects in the respective participating countries.

ZIRIA TIbAlwA Director, Technical regulation, electricity regulatory authority, Uganda

EKOw COlEMAN Senior investment Officer, Ghana infrastructure investment fund

TESTIMONIALS




POST SHOW

rePOrT

12

ACKNOWLEDGEMENTS

ON bEhAlf Of ThE ORgANIZERS wE wOUlD lIKE TO ThANK All Of ThE fOllOwINg ORgANIZATIONS whO CONTRIbUTED TO AfRICA PPP 2016:

gOlD SPONSOR

bRONZE SPONSOR

ExhIbITOR SUPPORTER

PlATINUM SPONSOR




POST SHOW

rePOrT

ON bEhAlf Of ThE ORgANIZERS wE wOUlD lIKE TO ThANK All Of ThE fOllOwINg ORgANIZATIONS whO CONTRIbUTED TO AfRICA PPP 2016:

MEDIA PARTNERS

OffICIAl CARRIER

InternationalProjectFinanceAssociation


ACKNOWLEDGEMENTS



POST SHOW

rePOrTOFFICIAL CONFERENCE ExECUTIVE SUMMARY

OFFICIAL CONFERENCE OPENINGIn his welcome address Mr Ahmed noted that the importance of promoting infrastructure through PPPs to development in Africa was shown by how well the conference and training had been attended and that diplomatic representatives, government officials, professional practitioners and investors were all clearly keen to continue to engage with the attractive subject matter.

He gratefully acknowledged the sponsors that year after year allow the APPP Conference to continue: the development Bank of South africa (Platinum Sponsor), the african development Bank (Gold Sponsor), toll infrastructure Services (Bronze Sponsor).

Cyprian Marowa said that he was pleased to see such expertise represented at the conference and encouraged questions on the different PPPs that were to be presented, as he believed it is important to see how solutions differ from country to country.

KEY CONFERENCE RECOMMENDATIONS:

• There is a gap in funding available for PPP feasibility studies – addressing this would help more projects get to bankability stage

• PPP teams should seek to engage with the private sector more in the early stages of project planning• There are a wealth of tools available for project preparation, and better dialogue can mean that people

know how to find tools that are appropriate for their scale and type of project• Successful PPPs, like those in South Africa and India are being looked at more and more by other

countries as governments seek frameworks to help them achieve success• SED should be increasingly a focus for PPPs, and one way of doing that is embedding it into tender

documents and regulation, as well as better engagement with the grass roots• A long-term view that includes long-term infrastructure maintenance and operation is the right

approach to infrastructure development• A high level of political engagement is needed to do successful projects – politicians need to understand

their opportunity to leave an infrastructure legacy, not just to ‘cut the ribbon’. Project impetus needs to be able to withstand regime change

• PPPs are developing as a professional practice, with an increase in standardisation in the necessary skillsets; more courses and training are becoming available

• SMEs should increasingly become a focus and concern of project planners• There are large-scale problems with liquidity in the debt markets in Africa; beginning to solve these

would make more mature and diverse debt funding solutions available• Project bonds as a mechanism for finance are being increasingly looked at, with South Africa close to

achieving this with the Johannesburg Stock Exchange• Project refinancing needs to be considered from the earliest stages to liberate capital for further investment• The private sector is the answer to closing the funding gap for infrastructure in Africa, however it is not

just international but local financiers too that need to be mobilised • On local engagement there is no one-size-fits-all approach, as different communities respond in

different ways; good public participation is key to mitigating risk and will only occur when engagement is done with integrity

• In terms of sustainability, standardisation is increasingly happening and projects will eventually need to align with the UN SDGs, and other relevant international standards




POST SHOW


SESSION 0: THE NEW DEAL ON AFRICA AND THE IPP FLAGSHIP INITIATIVEangela nalikka felt that working together in partnership on power and energy is the key to unlocking Africa’s potential. Energy is the backbone to the work the AfDB are doing in Africa and is the linking factor in agriculture, industrialisation, integration and improvement of quality of life, which together with energy itself comprise the bank’s ‘High 5s’ programme. She said, the New deal on Energy for Africa is a partnership-driven initiative, with the aim of creating a holistic approach by joining up those organizations active in the region, which may hitherto have worked in silos.

matthew rees of Power Africa a US initiative launched by President Obama in 2013, aims to bring power projects to financial close in the shortest amount of time possible, something Mr Rees said that no single development partner or agency could do on its own. Therefore, apart from its initial founding members (the AfDB and the World Bank) Power Africa has gone on to join with 12 development partners from the public sector and 120 private sector partners. This has led to over 130 transactions, which can be tracked in real time on their Power Africa Tracking Tool (a smart phone app), which keeps project information live and all stakeholders on the same page.

chris millward of MIGA thanked Angela Nalikka for outlining the aspirational goals that the AfDB has set out and stated that their spirit is fully aligned with the approach of MIGA. Ultimately, he went on, these goals are about leveraging public sector money to mobilise private sector financing. He stated that in 2015 40% of MIGA’s business was in Africa, and most of this was in energy sector, through their political risk insurance tool for project financing and their credit enhancement product.

anas charafi, Investment Officer at Africa50 then talked briefly about Africa50’s role in partnership. He first stated how pleased he was that Africa50 could play a role in the AfDB’s new initiative, and stressed that these programmes must be integrated. He proceeded to give some background on Africa50, a pan African investment platform, launched by the AfDB and now owned by 23 African countries. Their investment target is $1bn by 2017.

SESSION ONE: HARMONISATION IN PPP POLICIES AND REGULATORy FRAMEWORKSJames aiello outlined the current regulatory framework and policy initiatives in South Africa, going on to discuss new proposals for increasing private sector participation in PPP projects. One of these currently being explored is the use of listed project-specific bonds, and he said that the PPP Unit was working with the Johannesburg Stock Exchange to develop these. He mentioned that 26 projects have been successfully closed by the SA PPP Unit and that they have a further 50 in the pipeline at both the national/provincial and municipal level.

aboubacar guissé of Mali said that PPP processes are quite new in Mali, and their experience is predominantly in the electricity sector. He stated that his government has decided to draft a special bill for PPPs. This bill is now being put through parliament. He said that prior to the new bill, out of 53 proposed projects, only three were seen as viable PPPs. He went on to say that the new bill applies to the government department level as well as the municipal and regional level, and that it also contains a requirement to encourage PPPs to subcontract work to local companies as a way of growing SMEs.

atter Ezzat hannoura then gave the delegates a glimpse of what is happening in Egypt. He stated his view that anything that falls in between a fully owned state project and full privatisation can be a PPP. Mr Hannoura said that Egypt had learned a lot since starting to work with PPPs around ten years ago and wanted to use this platform as a chance to point out some of the major mistakes that delegates might make on their own PPP projects.

ziria tibalwa waako, brought the perspective of the Ugandan Electricity Regulatory Authority to the discussion. In her presentation she outlined Ugandan models of PPPs as well as the risk sharing mechanisms employed, which aim to split risk appropriately between the public and the private sector. She used the examples of the Bujagali Power Station and the GetFiT to show how these models have been deployed – more effectively in some places than in others.




POST SHOW


SESSION TWO: INVESTING IN INFRASTRUCTURE – FINANCING PRIORITy PPPs

cyprian marowa noted that Africa has current infrastructure needs of almost $100bn and that this translates to a funding gap of $47bn. By region, Southern African has the biggest funding gap as well as the largest spend. In South Africa, however, the funding gap is just over $1bn for infrastructure. He said that the work of the DBSA could be summarised by three pillars – support in adequate preparation of projects, the financing those projects in conjunction with other partners, and finally deployment of the Infrastructure Delivery Division.

ana hajduka said that innovative financing models have been used, but there we are a long way to closing the gap of $70bn per year needed annually up until 2030 to achieve the AfDB’s New Deal targets. Currently funding is at 4.8bn year, 50% of which comes from public sector funding. There have been 59 IPPs outside South Africa over the last 30 years, so the requirement to scale up is still huge. The focus of Africa GreenCo is to come up with alternative approaches.

romain py then introduced AIIM as the largest investor on the continent. He said also that in the last five years they have been responsible for investing into 2.25 GW of power. He noted that the first important thing any government needs when doing a PPP in Africa is proper planning, as infrastructure development is a long-term process which needs realistic targets, not ‘white elephants’. Secondly, he said that people are agnostic in how projects are financed. However, it is critical that projects are economically viable

Ekow coleman introduced the Ghana Infrastructure Investment Fund and its aim of being a catalyst to attract more private investment into infrastructure projects in Ghana. He said that they also want to make sure that projects are economically viable. The fund is also trying to address some of the long-term issues; e.g. most banks are focussed on short-term ends and therefore the fund is there for the midterm, to make sure deals are beneficial to the country in the long term. They are also driving other funding approaches and so seeking to exit their projects – for example, alternatives like stock exchanges – to draw other buyers in.

Jing li spoke next of some of the instruments that the AfDB have used to support the development of infrastructure through the financing of PPPs, like partial risk guarantees. They have also approved a EUR500m partial credit guarantee to Cameroon, she said, to support government obligations related to cross-currency swaps needed to hedge the proceeds of their Eurobonds, allowing the country to tap into the international capital markets. She also referred to the bank’s technical assistance in advisory services, as well as equity investments that they do.

paul horrocks described the OECD’s overall aim in finance into Africa as ‘getting from the billions to the trillions’. He also discussed the OECD’s work with the G20, as the de facto secretariat, in providing support thinking about long-term investment, for example project bonds (as already mentioned) as well as getting pension and insurance funds interested in refinancing projects at critical points during their lifecycle. They are focussing with their bilateral donors particularly on blended finance and what the most effective structures are to mitigate external factors such as foreign exchange and political risk - as these are significant to investors.

william dachs noted that in South Africa it is more common for the public sector stay engaged with the PPP project after during operation, as they have done with Gautrain. One of the difficulties with PPPs in the transport sector is that they are relative inflexible, as lenders have signed up to a particular risk and operating profile. Thus he said when they sought to expand the project, they formed a partnership with the DBSA to develop a credible plan. He noted Gautrain’s financial sustainability: equity returns and debt repayments are all on target.




POST SHOW


SESSION THREE: BEST PRACTICE SCENARIOS

Jack van de merwe of Gautrain began his discussion of the Gautrain PPP by noting that it was seen as more than just a transport project – indeed it had specific targets and KPIs that the project managers were aiming to hit. His presentation gave an overview of the preparation planning, implementation, objectives, finance and funding structure of the project. He also spoke about the current operational running of Gautrain as well as the future phases that are planned. He lastly covered the economic impact of Gautrain as well as the SED commitments of the project.

naoll mary then gave a presentation on the New Cairo Waste Water Treatment Plant Project. He noted at the beginning that his company, FCC Aqualia, had chosen to operate 100% in the local currency and that the $100m project requirement was entirely funded by investments from local banks. His presentation gave an overview of the challenges they had encountered, noting the contractual force majeure event that occurred as a result of the Egyptian revolution in 2011, as and how this was overcome.

Kweku Koranteng, lastly, gave the perspective of a DFI by presenting on the HKB Bridge PPP in Abidjan. He noted the project’s significance in the French-speaking West African region and that because Côte d’Ivoire had suffered a long period of political turmoil, AfDB had played a key role in reassuring investors and partners that the PPP was a safe project to be involved in. Additionally, because the bid was awarded in 1996, but financial close only happened in 2012 (probably due to unrest in the country), the role of the sponsor, Bouygues Group, was also key in seeing the project through to completion.

SESSION FOUR: FOCUS SESSION – PROjECT PITCH OF INVESTABLE PROjECTS

Beatrice florah ikilai of Uganda introduced the PPP Unit and giving the delegates some economic background on Uganda, she proceeded to outline the investible projects that the country currently has in the pipeline. These ranged from solid waste projects to road infrastructure, parks and government accommodation. The projects discussed were all at an early stage and seeking investment.

dieudonne Bondoma yokono of Cameroon addressed the delegates next. After explaining that lack of infrastructure has been an obstacle to economic growth in Cameroon, he gave an overview of the country’s present economic situation. He then went on to describe a range of projects that were at the feasibility study stage, which included dams, railways, highways, a hydroelectric power plant and an oil depot.

Stanley Kamau, director of Kenya’s PPP Unit spoke next. He began by describing the macro economic advantages of investing in Kenya, for example the GDP growth rate of 5.9%. He stated that the Kenyan government are trying to push projects through a using framework that they have devised, pointing to 71 projects at various stages (from conceptual to operational) that were going through this pipeline. He drew attention to PPP projects in the transport sector, in particular to six road PPP projects that are about to issue RFQs, as well as student hostels that are at an advanced stage.

Lastly, chidi K.c. izuwah Snr of Nigeria presented an overview of infrastructure investment in Nigeria. He noted that Nigeria is Africa’s largest economy and that the Nigerian government is politically committed to PPPs. He then gave a quick rundown of the country’s active PPP projects, such as the Garki Hospital in Abuja, noting that these are successfully run by their private sector operators. He rounded up with a short case study of a mobile phones operator that won a bid in 2001, when the country was deemed risky for investors, and today earns over 30% of its global revenue from their Nigerian subscriber base.




POST SHOW


SESSION FIVE: SOUTH AFRICA FOCUS SESSIONHow did the idea of PPPs originally took root in South Africa? James aiello said that it started from a successful PPP program for municipalities in 1999 that people felt should be established at the national level. He said that, with the strong support of Trevor Manuel (the Minister of Finance at the time) and very little resistance, a cabinet memorandum was drafted, which is the effective mandate for forming a government department.

How much politicians draw their popularity from their ability to deliver these infrastructure projects, and how PPP professionals can steer their way through the resulting debates? liesel lombaard agreed that this was true in some cases, noting that in South Africa there had recently been political changes at local level and felt that this was due to poor service delivery.

How are projects best made a success for both public and private sectors? mark flower said that it is important that project execution skills are transferable from one sector to another, and that government should take a stake in the SPV formed to extract the benefit of a successful project. Jack van der merwe said that it was important for PPP units to negotiate aggressively with the private sector with a central bargaining team – that if a bidder didn’t like the way the project was structured then they didn’t have to tender, in fact.

The discussion then turned to multi-state PPPs. The panel was asked how development bodies could overcome the potential challenges of doing a cross-border PPP. Jack van der Merwe drew a parallel with the US structure of federal government and separate states, making the point that if development money could be centralised then that would force commonality. James Aiello said he felt there was a decent amount of cooperation between the East African countries and this was something that could be built on.

DAY 2 KEYNOTE ADDRESS: LESSONS FROM INDIA: THE WORLD’S LARGEST PPP MARKET

paritosh gupta of IL&FS summarised how India has transformed itself over the last 30 years into one of the best destinations in the world for PPP infrastructure projects. He also discussed Africa’s huge infrastructure needs, and how this creates an excellent opportunity for both private developers and investors. Africa, he said, shares a historical trajectory with India and so can learn a lot from the Indian story and replicate its success. India today has one of the largest PPP programs in the world, and has developed templates that can be used in other regions. Mr Gupta concluded by reiterating that, in the light of India’s success with PPPs, Africa contains some immense opportunities. He said that IL&FS are keen to partner with governments and private sector organisations represented at the conference, as well as in large format regional development initiatives.

SESSION SIx: PROjECT PREPARATION FACILITIES ROLE IN ACCELERATING A PIPELINE OF BANKABLE PPPS

Junglim hahm of PPAIF noted that the fund’s mission is to help eliminate poverty by facilitating private sector involvement in infrastructure, and that their work is mainly on creating enabling environments. She said that post-implementation support is often overlooked in project preparation, making reference to some of the project preparation materials published by PPIAF. She concluded by discussing the importance of effective communication with all relevant stakeholders.




POST SHOW


Sheila galloway gave an overview of the growing momentum of PPPs in Africa, as well as some of her experience giving technical assistance to the SADC countries. She noted that, in the case of early PPPs in South Africa, many of the frameworks were created only after going through the experience itself. Most countries in Africa have a PPP or coordinating unit, she said, but there is certainly a need for effective frameworks.

John Seed of Mott Macdonald his company’s perspective was potentially a valuable one to the members of governments present, as Mott Macdonald advise investors and so see things from their point of view. He said that there was certainly a massive need to build critical infrastructure in Africa, but it was getting the feasibility study and the business case right that would bring investors in. He noted that there might be 150-300 different risk elements to any project that an investor will assess, so, as the previous speaker said, he advocated engaging with the market at the earliest possible stage.

alex Katon, Executive Director of InfraCo Africa, stated that InfraCo provides risk capital and expertise to develop infrastructure projects in Africa. InfraCo Africa will invest into getting projects to bankable stage – which he noted was a gap already identified by the panel – and then exit by selling equity to the private sector. He said that on average typical projects need about $5m to get to financial close, and that they have closed eight projects to date, their largest being the Cenpower project in Ghana. This is now an IPP that will deliver just over 20% of Ghana’s electricity supply. matthew rees of Power Africa noted the importance of energy access as it ties together many other development needs. Power Africa’s approach to meeting its goals of increasing capacity by 30,000 MW and create 60m new connections (by 2030) is to leverage their relatively small funding pot of $7bn by bringing other partners, especially in the private sector. They have already mobilized a further $53bn from the public and private sectors, and he noted that 4613 MW worth of projects have been brought to financial close to date.

In conclusion the panel agreed that one of most important considerations was to make sure governments know how to find the right project preparation solution for the right scale of project.

SESSION SEVEN: WORKING TOWARDS INTEGRATED AFRICA’S PRIORITy PPPS

Eng. m c munodawafa began the session with a presentation on the development of the Bakota Gorge Hydro-Electric Scheme (BGHES) on the Zabezi River.. He then went on to discuss the BGHES, including its plan for implementation and eventual commissioning in 2022, and the benefits it will bring to the region, in term of renewable energy generation. He then enumerated some of the reasons the River Authority is seeking private sector involvement. He concluded by welcoming investors to closely observe the project’s progress, as it is approaching the procurement stage.

Joan miquel Vilardell of AGL gave his presentation on how best to leverage the private sector to boost cross-border infrastructure development in Africa. He noted that African international trade has a huge potential to grow but that infrastructure is very much needed to provide access to landlocked countries; once transport corridors are established we will see increased investment in the medium and long term. He noted the importance of trust in cross-border PPPs, and that there will be asymmetries in costs and benefits between different countries that would need to be addressed.

hannes van wyk discussed how to manage political and social risk on toll road concessions. He began with an introduction to his company, Toll Infrastructure Services, and explained that political and social risk are becoming increasingly significant factors to project planners. Mr van Wyk mainly advocated a high level of community and social engagement as way of quantifying and mitigating this risk. He said public participation means sharing information with the community and letting their response impact on the decision making process, and that solutions would have to be locally tuned – rather than copied and pasted from other projects in other places..


8AFrICA


POST SHOW


Lastly, françois Serres gave a more legal and regulatory perspective on mega projects, drawing on his knowledge and experience of West Africa. He noted at the beginning that the methodologies now being developed for integration in Africa might someday be reflected in a post-Brexit Europe. He then talked about some of the difficulties of cross-border cooperation and said that the point of integration is to connect countries, and this means overcoming geography to connect people. He said that historically there have been projects being pushed through where the state has not even clearly decided the structure of how the project will be executed, whether that is through a PPP, a PFI, or through public procurement.

SESSION EIGHT: SOCIAL & ECONOMIC CAPACITy BUILDING

Jacqueline odula-lyakurwa outlined the AfDB’s Inclusive Growth Strategy for 2013-2022, and how these work in line with the bank’s High Five priorities. She then drew attention to effect of the fourth ‘P’ of PPPs – people – and how the electoral cycle has a direct affect on PPPs and their success. Therefore governments need to work hard to explain the need for particular PPPs to the people well before deals are signed. She explained that the AfDB was working to increase capacity building by partnering with other initiatives, as well as increasing civil society engagement and media awareness. In summary she said that the community must have a positive view of the PPP project for benefit to flow from it to them.

Joanne foley expressed the importance of community engagement and inclusive growth. She stressed the significance of these factors to the risk profile of the project, from an insurers point of view. She noted that some of the factors have obvious insurance solutions and some don’t, but all solutions revolve around community engagement. She said that a growing PPP pipeline should ideally create greater opportunities for the local insurance market, but in reality insurance markets are led by advisories that have international ratings behind them, and those that work internationally.

Beatrice florah ikilai then spoke broadly on social and economic capacity building and tools that can be used in the PPP space to improve the lives of Africans. She noted that stakeholder engagement is of paramount importance in PPPs, as all sectors of society need to be included when doing PPPs. She used the AfDB’s High Five’s as a grid to view inclusive growth through.

peter robinson discussed relevant tools around PPPs to improve quality of life. He noted that the present focus on inclusive growth in development came about in the wake of the Second World War, and that more recent failure to provide basic services has raised pressure for greater participation in the benefits of economic growth. He stated that all infrastructure projects should contain social development components, and that PPPs in particular should adhere to principles of good governance like participation, transparency and accountability. He further noted that the concept of tools is very fashionable at the moment, but in his view there is a gap in the literature for integrating inclusive development into PPPs

SESSION NINE: RISK & REWARD – WHy PPPS NEED TO CONTINUE

Tom Minney put the question to the panel of whether we are at the point, in Africa, of where an actual coordinated pipeline was starting to develop or whether we are seeing separate projects being developed in silos. Are we seeing a regulatory framework developing? heleen goussard of RisCura said she is seeing progress and this is evident from the fact that the dialogue is evolving, particularly at the APPP Conference. When compared to the Indian story, she noted that Africa is only about a decade into the process, so refinements are still taking place. She said in terms of developing frameworks, the right laws have to be passed, so the political question is always an issue.




POST SHOW

rePOrT

Tom Minney then asked chris millward whether he felt the conditions are coming together for investment in infrastructure to grow dramatically. Mr Millward responded that it is not just foreign investors but local ones that would be key to this growth, as they have reduced perceptions of political risk and are not affected by currency exchange risk. He drew a parallel with India, saying that local financiers had been responsible for a lot its growth. MIGA, he noted, always has a very long pipeline of projects in Africa, but few of these come to fruition. There is no doubt that PPPs are part of a solution, as it is critical that the private sector plays a huge role.

chinyelu oranefo was then asked whether the African PPP market was on track. She said that she saw that there is frustration, as we should be further along then we are now. However, concepts need to be proven and mistakes need to be made and learned from – this will create an unlocking for PPPs to scale at an increased rate. She said she is excited as she can see this happening, particularly in the power sector. Heleen Goussard noted that private capital is created by the middle classes paying into pension funds and taking out insurance, and this is very much happening in Africa. She said that pension funds that are seeking to invest in Africa are not finding infrastructure projects with the right risk-return profile, however. She suggested the best approach for countries was to get a first PPP done, which allows investors to see results.

Tom Minney then asked about these investment funds and their potential to scale up the process of infrastructure investment. Heleen Goussard mentioned the lack of inflation-linked products for funds to invest into in Africa, and also that pension funds want to see past track record of similar investments working, because they are risk-averse investors. Mr Minney asked if the regulatory environments are right for pension funds to invest into Africa. Chinyelu Oranefo noted that there are other global funds that are looking for rates of return that can’t be found anywhere else but in Africa, but these have strict requirements in the way projects are structured, and that particular environmental concerns, for example, are correctly observed.

The panel agreed that even though there is a pool of projects available, only a selection will be attractive to the private sector. Additionally, each country is unique and has unique infrastructure requirements. PPPs need to grow but there is not one approach that can be taken, so the challenge is to develop partnerships that meet the varied need to fuel growth on the continent.

OFFICIAL CONFERENCE ExECUTIVE SUMMARY


2016 Africa PPP Conference and Exhibition Post Show Report

Documents

Transcript of 2016 Africa PPP Conference and Exhibition Post Show Report