November 2015

The Infrastructure Consortium for Africa’s annual report, researched and produced by analysts at African Energy and parent company Cross-border Information (CbI), points to positive trends in financing for energy and other critical sectors across the continent. But while public donors and private investors are keen to buy into more deals, implementing cross-border mega-schemes is more difficult

The Infrastructure Consortium for Africa (ICA) reports that out of the four sectors it analyses – energy, transport, water, and information and communications technology (ICT) – transport operations attracted the most financial commitments ($34.5bn) of any sector in 2014, taking all sources of finance into account. This was largely due to $17.6bn in national government budget allocations and the $8.4bn of investment certificates for Egypt’s Suez Canal expansion. Among ICA members, which include leading national and multilateral donors, the energy sector received more commitments than any other sector in 2014, when ICA members committed $9.2bn out of the $22.4bn committed to the sector from all sources of finance.

Public and private sector operators expressed concern about the slow progress of major regional projects, notably the Programme for Infrastructure Development in Africa (PIDA) and its Priority Action Programme (PAP). Many operators see smaller schemes and new commercial models as the way to provide power to hundreds of millions more consumers across sub-Saharan Africa.

Unveiling its annual report, Infrastructure Financing Trends in Africa 2014, the ICA Secretariat said a total of $74.5bn was committed last year to its four sectors of focus. This figure is based on reported ICA member data, identifiable commitments made by 42 African national governments, non-ICA member external public sector funders and the private sector.

This was less than the $99.6bn reported in 2013 (AE 290/19). However, the headline figure obscures some promising trends in support for energy and other infrastructure apparent since 2012 (AE 266/19). The reported downturn was largely due to a sharp fall in Chinese commitments, particularly for transport projects, from $13.9bn to $3.09bn, as recorded by ICA’s monitoring (AE 309/19). The 2013 figures were also skewed by the inclusion of an exceptional $7bn of commitments from US President Barack Obama’s Power Africa initiative, a slowdown in private sector commitments to the transport sector, and a more rigorous approach to reporting of central government budget allocations in ICA and other methodology.

Among ICA members, multilateral development banks led the way in providing funding flows. The World Bank Group (WBG) reported commitments totalling $2.3bn to energy projects, while the AfDB made an unprecedented $1bn allocation to Angola’s power sector reform programme.

The ICA’s bilateral and multilateral members reported total commitments of $18.8bn in 2014. Although this was less than the $25.3bn reported in 2013, it demonstrates a steady underlying trend: when the exceptional $7bn US contribution is excluded, their 2013 commitments totalled $18.3bn. The report comments: “On a like-for-like basis with reporting by broadly similar organisations, ICA members’ annual commitments for 2012-14 respectively were $18.7bn, $18.3bn and $18.8bn.”

Conventional financing instruments remain the most used by ICA members in 2014, when loans accounted for $14.3bn (75% of the total) and grants for $2.7bn (14%) of commitments. Meanwhile, ICA members’ disbursements held steady, “edging to a record peak of $13bn in 2014, compared with $12.7bn in 2012 and $11.4bn in 2013”. The bulk of recently committed funds has yet to be disbursed, despite US efforts to drive Power Africa forward (AE 306/8).

African Energy's work with the ICA

African Energy's parent company Cross-border Information (CbI) is consultant to the ICA Secretariat for its Annual Report. Our work with the ICA includes data collection, collation and analysis and the African Infrastructure Investment Survey of private sector attitudes.

Our research work on African national governments’ infrastructure budgets in 2014 produced data for 42 countries, substantially drawn from official budget statements, expenditure frameworks or other official government documents. We also provided some perspectives on subnational funding that indicated that funds generated by city, municipal and other subnational governments as well as state utilities may make significant contributions to Africa’s infrastructure development.

Download the pdf of the full 2014 report

For more information about the report and our work with the ICA contact:

Mark Ford
t: +44(0)1424 721667
e: mark@cbi-research.com