Private Infrastructure Development Group (PIDG) A consortium of nine donor organisations who have joined together to help facilitate PSI in infrastructure in developing countries, with a principle focus on SSA Countries

Current Members of PIDG AustriaSwitzerland Australia The Netherlands Germany United Kingdom IrelandWorld Bank Group Sweden(through the IFC)

Investment in New Infrastructure in Africa 65% Governments 20% PSI 15% ODA Current investment totals c US$24 billion per year. WB/AfDB estimate that this needs to be more than doubled if even basic needs are to be met within the coming decade. Distribution of Current Investment

Constraints to PSI  Lack of an appropriate enabling environment  Shortage of long-term FX debt  Shortage of local debt  Limited local capacity

What PIDG and its Partners are doing to help PPIAF (a PIDG partner) - helps improve the enabling environment InfraCo Africa – develops projects for the market EAIF – provides long-term hard currency debt to bridge financing gaps GuarantCo – provides local currency guarantees to local debt providers TAF – helps build local implementing capacity

InfraCo Africa February 2011 Creating viable infrastructure investments across Sub- Saharan Africa

Lack of resources Lack of technical expertise Lack of funds Africa faces a Capacity Gap 7 Developing Countries: In developed countries governments have the capacity and funds to develop PPP projects “in-house” and attract private sector investors Developing country governments face a capacity gap: Capacity Gap Project/PPP Development Cycle has Three Main Components ConceptualizeDevelop Build & Operate Developed Countries: InfraCo was created to bridge the Capacity Gap Government’s Role Private Sector’s Role

InfraCo and Procurement 8 As a publicly funded entity, InfraCo must ensure value for money and transparency in all its procurement activities InfraCo follows PIDG (European Union) procurement regulations: All contracts are procured competitively and assessed transparently Major contracts (e.g. EPC, O&M) are advertised widely in the business press and the European Journal Consultancy work is procured through competitive bidding, or if there is only one qualified bidder, value-for-money benchmarking is used InfraCo selects equity investors through a competitive bidding process and uses competition to ensure costs of debt are kept low

Governments across Africa are Partnering with InfraCo Cape Verde: 26MW Wind Farm Project Ghana: 340MW Gas Turbine Power Plant Guinea: Mini-hydro Project Senegal: Wind Power Zambia: Agricultural Irrigation Zambia: Hydro Power Project Kenya: Nairobi Rail eleQtra Offices Senegal: River Transport Mozambique: Bio-ethanol Uganda: Multi-sector, road & water transport, water, power 9

Some InfraCo Projects Cenpower, Ghana: 340 MW Combined-Cycle Gas Turbine power plant near Tema Approx. project cost $400m InfraCo has led development in partnership with local private developer Site, Permits and Generation license secure InfraCo secured PPA with ECG, has managed EPC procurement Equity investment secured from Africa Finance Corporation Competitive EPC procurement ongoing with bids received from multiple bidders 10

Some InfraCo Projects Bugala Island, Lake Victoria, Uganda: Two New Ferries plus two landings: –Design and Build contract with Johs. Gram- Hanssen A/S of Denmark and local Lake Victoria shipyard –Ferries $3.5m each / 120t carrying capacity / 60 vehicles 120 passengers / 10 knots –Training of Ferry Crew –Full cost recovery vehicle tariffs 65 km road / 1.6 MW solar-diesel power plant / distribution network on island / water supply Total project cost $40m Financing through GuarantCo (tenor extension), USAID (60% guarantee), Finnfund, Nedbank 11

Some InfraCo Projects Chiansi Irrigation, Zambia: $30m investment in irrigation infrastructure Water rights secured to extract from Kafue river Project will lease 2,300 ha of smallholder and commercial farm land for 25 years Landowners participate in project equity and receive share of cash flows from farming activities Smallholder farmers receive access to market garden irrigated plots Pilot project established in 2009 is producing wheat and soya on 150 ha of smallholder land Capital financing from ORIO, FMO, Lundin for Africa, EAIF and commercial investors 12

Some InfraCo Projects River Transport, Senegal: Up to $700m River Transport project for iron ore, phosphate and general cargo transport on the Senegal River including transfer to Panamax dry bulk ship in new port in St. Louis Senegal River Development Authority - OMVS - (advised by the Port of Rotterdam) have signed MoU with InfraCo to develop project as a PPP The Project is currently in the Evaluation stage Nairobi Commuter Rail, Kenya: JDA signed with Kenya Rail, currently in feasibility stage $200m refurbishment and extension of commuter rail system in Nairobi Permission from Kenyan Public Utility Oversight Authority to do a negotiated contract on the basis that “the services offered by InfraCo are unique” 13

Some InfraCo Projects Cape Verde Wind Farm: 26 MW power plant, total project cost €65m Will provide 25% of national power needs replacing expensive fossil fuel generation InfraCo began development in partnership with Electra and GoCV in 2006 InfraCo secured site, permits, PPA, government guarantee and finance and managed procurement Vestas selected as EPC contractor following competitive process Financing secured from AFC, Finnfund, AfDB and EIB Construction started in November 2010 and will be completed by late MW 8MW 4MW 8MW

Cape Verde – Case Study – Awarded Contracts Cape Verde Awarded Contracts: Owners Engineer - €300,000 Wind Assessment - €40,000 Environmental Consultant - €230,000 Lenders Engineer - €130,000 Financial Advisor Contract - €700,000 Owners Legal Counsel - €1,500,000 Lenders Legal Counsel - €1,100,000 Wind Farm EPC contract - €45m Wind Farm Maintenance Contract - €500k / yr 15 6MW 8MW 4MW 8MW