AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” The Bank Group’s Contribution to Transport Infrastructure Development in East Africa 9 December 2013

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” OUTLINE Getting to Know the AfDB Bank’s Long-Term Strategy Transport and ICT Implementation Strategy Main Issues and Challenges Bank Response The Way Forward/Conclusions

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Getting to Know the AfDB

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” The African Development Bank Group The Group comprises three distinct entities, The African Development Bank (ADB), the parent institution established in 1964 (52 Regional and 26 Non – Regional Member Countries) The African Development Fund (ADF), a concessional resource affiliate established in 1972 (26 members), and The Nigeria Trust Fund (NTF), the other concessional resource affiliate established in 1976 Although legally and financially distinct from the ADB, the ADF and NTF share the same staff, and are subject to the same high standards.

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Group Objectives and Functions The main objective of the Group is to mobilize resources to finance operations that will foster economic development and social progress in the Bank’s Regional Member Countries (RMCs).

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Group Objectives and Functions (contd.) The Group pursues its objectives by using resources at its disposal to finance investment projects and programs, mobilizing resources through co-financing with bilateral and multilateral development agencies as well as funds from financial markets; promoting international dialogue and understanding on development issues concerning Africa

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Group Objectives and Functions (contd.) fostering government and private investment in Africa through policy reforms; providing much-needed technical assistance to African countries for the selection, study and preparation of development projects.

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Lending Instruments i) Project loans: Investments aimed at creating specific productive assets or increasing identifiable outputs; ii) Lines of credit: Funds channeled through national or sub-regional development finance institutions aimed at financing a number of specific projects, most frequently from small and medium-scale enterprises; iii) Sector investment and rehabilitation loan - investments aimed at strengthening or rehabilitating sector specific planning, production or marketing capabilities; often used to finance the importation of equipment or input for a sector;

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Lending Instruments (contd.) iv)Sector adjustment loans: Credits aimed at supporting policy changes or institutional reforms in a specific sector; v) Structural adjustment loans: Credits aimed at fostering specific macro-economic policy reform; vi) Private Sector Operations: The Bank’s support to private sector development through direct lending to private sector enterprises. vii) Others include, Sector Wide Approaches (SWAP), Project Preparation Facility (PPF), and Budget Support Loans/Grants

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” The Group’s Long Term Strategy ( ) Country Stratgy Preparation Negotiations Implementation / Supervision Evaluation Project Cycle Identification AppraisalApproval

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Transport Sector Strategy  Increase National and Regional Connectivity  Focus on Transport Corridors and Backbone communication Infrastructure  Leverage partnerships to plan and finance regional infrastructure  Promote Policy dialogue to remove barriers and increase trade AfDB Building the Continent’s Transport Infrastructure  Reduced transportation cost  Enhanced accessibility and mobility  Raising income levels  Create jobs  Enhance Trade  Gender Mainstreaming & Climate Change

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Main issue: High Transport Cost Freight tariff USD per Ton/km USA 0.02 USD per T/Km, Kenya 0.04 per T/Km, Uganda per T/Km, Rwanda per T/Km Niger 0.13 per T/Km Congo DRC 0.12 per T/Km Burundi 0.11 per T/Km Burkina Faso 0.09 per T/Km Transaction Costs (Freight as % of value of imports) 8% in Europe, 11% in Africa, 30% East Africa, 35 % - 40% Rwanda, Burundi, RDC (East) Picture: Thika Road Kenya

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” 13 Transport infrastructure challenges Poor Intermodal Linkages; Low Capital Investment;Investment High Costs of Services; Low Capacities-Congestion and Inefficiency; Poor Sustainability; Poor Private Sector Participation; Weak Institutional and Regulatory Capacity;

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Transport – the Bank’s Response Main Activities procured Civil Works Feasibility Studies, Detailed Design, Design Reviews/construction supervision Technical Assistance (e.g. project management, contract management services Sector-wide activities e.g. Policy Development, Economic and Sector Works Main Areas of Intervention Roads: Re-gravelling; Periodic Maintenance; Rehabilitation; Re-Construction Rail: Studies/Design - Rehabilitation; Urban Transport: Rehabilitation and New works. Airport/Ports: Feasibility Studies Transport Sector Main Areas: Roads, Rail, Port, Airport, Urban Transport, Multinational/Regional

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Finance Transport & ICT - Total Bank Approvals (US$ million)

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Portfolio Transport & ICT 2013 Portfolio By Region

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” ON – GOING PROJECTS

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” ON – GOING PROJECTS (Cont.)

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” The Way Forward/Conclusion Private sector participation in the sector to drive efficiency. Innovative and tailor-made PPP schemes. Strong project management expertise Innovative construction technologies. Knowledge transfer – Training Programme. Preparation of projects. Implementation of PIDA’s Priority Action Plan (projects). Innovative investment instruments to complement public-sector lending. Picture: Tanzania: Arusha – Namanga Road Project: One Stop Border Post Construction at Namanga

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” Thank you AfDB Contacts: George Makajuma, Task Manager, Transport, East African Resource Centre,

AFRICAN DEVELOPMENT BANK GROUP “building today, a better Africa tomorrow” 21 infrastructure deficits Overall Deficit =USD90 billion/annum;annum Transport =USD30 billion/annum East African Railway Network; Requires USD1.2 billion/year for rehabilitation of existing network to good service levels; Cost of Standard Gauge upgrade=USD29 billion;