Smart Cities Funding and Financing in Developing Economies 2019-10-27آ  Smart Cities Funding and...

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Transcript of Smart Cities Funding and Financing in Developing Economies 2019-10-27آ  Smart Cities Funding and...

  • Smart Cities Funding and Financing in Developing Economies, including South African insights Assisting developing cities to finance their infrastructure gap through private sector participation approaches

  • Smart Cities Funding and Financing in Developing Economies

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    About Michael FlynnMichael Flynn is the Global Financial Advisory Public Sector Leader for Deloitte. He also leads the Deloitte EMEA Infrastructure & Capital Projects practice and focuses on advising public, private and banking team clients on finance raising, restructuring and refinancing of both project finance and corporate debt transactions including the development of government and infrastructure assets, real estate, energy, and renewable energy assets. This advice has included the incorporation of ‘smart’ into traditional infrastructure and considering value capture opportunities including asset recycling for government clients. Michael is a member of the United Nations Economic Commission for Europe (UNECE) PPP Business Advisory Board and the International Project Finance Association Council in Ireland. Michael is a member of the Deloitte Insights board.

    A. Kishore Rao Kishore Rao is a Principal at Deloitte Consulting and serves as Deloitte’s international development business global leader, serving multilateral development banks, public international organisations, and bilateral development agencies. Kishore has over thirty years of experience working for international donors, multinational corporations and private foundations in emerging markets expansion, international trade, investment, competitiveness, innovation, economic zones, regional cooperation, trade and transport facilitation, enterprise development, public-private partnerships, social enterprises, and private infrastructure development. Previously, he was a vice president at BearingPoint leading its Middle East and North Africa practice and CEO of a leading economic consultancy. Kishore has worked in over seventy countries and has experience in the aviation, maritime, media, IT and BPO services, real estate, infrastructure, manufacturing, energy/ utilities, agribusiness and transportation industries. He holds a BA in Economics from Reed College and an MBA from Georgetown University.

    Smart Cities Funding and Financing in Developing Economies

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    Drilon S. Gashi Drilon Gashi is a Senior Consultant in Deloitte’s Infrastructure and Capital Projects practice with 9 years of international experience leading projects and producing policy analyses for government and multilateral agencies. Drilon’s areas of focus are urban development, infrastructure finance, smart cities, economic development strategy, and energy infrastructure. Drilon has advised city governments in over 10 countries to design economic development strategies and finance new infrastructure projects. Drilon previously served as an Urban Development Consultant for the World Bank Group’s urban development global practice from 2014-2017, as well as external consultant to the Office of the Prime Minister of Kosovo from 2008-2010. He holds a Master of International Affairs (Economic and Political Development) from Columbia University and a Bachelor of Economics from Ramapo College of New Jersey.

    Sikhumbuzo Ngcobo Associate Director| Technology – Government & Public Services Deloitte Consulting – South Africa D: +27 11 209 6303 singcobo@deloitte.co.za

    Sikhumbuzo is a Public Sector Solution Lead in Deloitte Consulting South Africa. He joined Deloitte Consulting in 2017 primarily responsible for establishing and leading the Public Sector Enterprise Solutions. Sikhumbuzo has 13 years’ experience in Business Management Consulting working with public and private sector to deliver transformational programmes for large organisations. He has extensively focused on business process improvement and technology projects to assist clients to drive cost reductions and improve operational efficiencies. He has been instrumental in shaping the digital transformation agenda in South Africa and has lead numerous digital transformation project in the airline and aviation industry in South Africa. Sikhumbuzo has been instrumental in Brainstorm Magazines round tables on exponential technologies i.e Cloud Computing, Artificial Intelligence, Robotics, Mobility and Analytics. He recently featured on Brainstorm Magazine on the Smart Cities 2.0 and Cloud Roundtable articles. He has developed a point of view on “Building a Digital South Africa to Stimulate Economic Growth” which is due for publication in April 2019. Sikhumbuzo had a brief spell with South African Sugar Cane Institute and Agriculture Research Council Institute for Tropical and Subtropical Crops as part of his studies and internship programme.

    Prof. Neissan Alessandro Besharati Associate Director | IDO – Government & Public Services Deloitte Consulting – South Africa D: +27 11 517 4030 nbesharati@deloitte.co.za

    Professor Neissan Alessandro Besharati is the Deloitte Development Africa (DDA) Lead, focusing on Donor Funded business with International Donor Organisations, public and private sector entities across Africa. He holds a Masters in International Social Development and a PhD in Public Policy & Development Management. Neissan has over 20 years’ experience in the development industry, having worked on five continents serving in management and advisory positions with governments, NGOs and various multilateral organisations in a number of low-income, middle-income and post-conflict countries. He serves as a senior research associate of several prominent international development think- tanks and is a visiting professor at the Pontifical Catholic University of Rio de Janeiro, the University of Bern (Switzerland), and is a post-graduate faculty member at the University of Witwatersrand, where he trains leaders from the public and private sector throughout Africa. Dr. Besharati provides regular policy advice and consulting services to governments, bilateral donors, regional institutions, private foundations, and sits on United Nations, World Bank, African Union and OECD expert groups and committees. His areas of expertise include international development cooperation, monitoring and evaluation, emerging economies, public-private partnerships, development finance and education policy

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    Introduction South Africa is a developing country that is experiencing national and international migration. This is largely experienced by metropolitan cities that need to have or develop infrastructure that can deliver services across spectrums i.e roads, health, education, water, electricity, and sanitation.

    It is evident that most South African metropolitan municipalities are struggling with the demand to deliver services. The demand exceeds the supply with a constrained budget required to invest more into infrastructure that enables service delivery.

    The ENE 2018 report sets out South Africa’s budget amounts to be allocated from the National Revenue Fund for funding and financing the different national development and/or initiatives requirements for 2018/19. The ENE publications also include information on how government institutions across different departments have spent their budgets in previous years and how they plan to spend their budget for upcoming years.

    According to the ENE 2018 report the consolidated expenditure amounts to R1.67 trillion in 2018/19, R1.8 trillion in 2019/20, and R1.94 trillion in 2020/21, and is expected to increase at 2.1 per cent in real terms over the MTEF period1. Main budget expenditure, excluding the contingency reserve, is also set to increase at an annual average of 1.8 per cent in real terms over the period, from R1.33 trillion in 2018/19 to R1.54 trillion in 2020/212. Revenue collected in 2017/18 amounted to roughly R1.22 trillion3. These amounts are not nearly enough to meet current demand for learning and culture, health, social development, peace and security, economic development, community development and general public services. Certainly, it will not be enough to meet those needs in the future.

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    The South African government aims to reduce spending within and across function groups by means of reallocation of resources, prioritisation and cost of initiatives while retaining/gaining positive growth and value4. While government budget allocations from National Treasury are traditionally the major source of finance, National Treasury budget allocation will not alone be able to finance these national needs on a sustainable level.

    The volume of private participation in financing developing economies’ such as South Africa remains low and thus governments particularly in cities, may likely need to achieve a pipeline of privately financed or “bankable” initiatives for future demands.

    International development organisations (IDOs) can help cities through providing lower-than-market-rate concessional finance, technical assistance to structure government investment projects, and additional capacity to mobilise private financing. Yet ultimately, city governments themselves should evaluate and understand at the outset the private financing approaches available, identify the financing structure for their high-impact initiatives and choose the ade