Consultancy to Develop Policy-Research Papers on Innovative Methods for Financing Regional Infrastructure – Energy

• Country: Zimbabwe
• Summary: Consultancy to Develop Policy-Research Papers on Innovative Methods for Financing Regional Infrastructure – Energy
• ZWT Ref No: 17540147
• Deadline: 26 Oct 2017
• Financier: World Bank (WB)
• Purchaser Ownership: Government
• Tender Value: Refer Document
• Notice Type: Tender
• Document Ref. No.: ACBF/EOI/053/17/AFDB
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• Description:
• Expression of Interest are invited for Consultancy to Develop Policy-Research Papers on Innovative Methods for Financing Regional Infrastructure – Energy. Background There is an established and globally endorsed body of knowledge linking infrastructure development to socio-economic growth with studies showing the positive effects of improvements in infrastructure on key development sectors.[1] For instance, for every dollar spent on public infrastructure development, the gross domestic product (GDP) of a country rises between US$ 0.05 and US$ 0.25[2]. However, sub-Saharan Africa (SSA) has the worst infrastructure deficit of the world’s developing regions, which is a binding constraint on economic growth and sustainable development. For example, sub-Saharan Africa, with a combined population of up to 1 billion, generated 90GW in 2012 (half of which is in South Africa) that is approximately the same amount of power as Spain, a country of 45 million[3]. Similarly, African countries are lagging behind in other infrastructure development sectors. The annual funding gap is indicative of the high deficiency: US$9 billion for information and communication technologies, US$ 11 billion for the water sector, US$ 18 billion for transport and US$ 41 billion for power. Bridging these gaps is crucial as the absence of adequate infrastructure is causing to Africa a loss of about 2% of GDP growth annually[4]. Moreover, infrastructure development does not only drive economic growth but also reinforces regional integration through improved connectivity that enhances market integration and cooperation between countries. Developing infrastructure at the regional level provides for larger and more competitive markets, reduces prices, helps to lower costs of transport, communications, and electricity, and fosters scientific and technological research[5]. As such, regional infrastructure appears as both a driver and an outcome of regional integration.[6] In this context, African leaders have the resolve and political will to improve the state of infrastructure development of the continent. This culminated in the adoption of the Programme for Infrastructure Development in Africa (PIDA) approved by African heads of states and governments at their 18th Summit held in Addis Ababa, Ethiopia, in January 2012. Through PIDA, US$ 360 billion will be invested on infrastructure up to 2040 of which priority investments of US$ 67.9 billion should be made up to the year 2020 in the critical infrastructure sectors of energy, transboundary water supply, transport and information and communications technologies (ICT)[7]. African leaders also launched the Presidential Infrastructure Champion Initiative (PICI) to champion specific regional infrastructure projects that would fast-track regional integration and intra-African trade. In addition to the PIDA programme and PICI initiative, donor countries and development partners also launched other initiatives to support infrastructure development in Africa such as the Infrastructure Consortium for Africa launched by the G-8 member countries and multilateral partners, the AfDB Africa50 Infrastructure Fund, InfraCo Africa and The Emerging Africa Infrastructure Fund launched by European and Australian partnership and the World Bank. In addition to inadequate capacity for implementation and lack of well-prepared projects, financing is a major reason that hinders development and execution of infrastructure projects in Africa[8]. Less than half of the US$ 93 billion needed annually to close Africa’s infrastructure gap[9] is currently financed. Major sources of financing include African governments, multilateral and bilateral cooperation, Official Development Assistance (ODA) and the private sector. However, since the 2008 financial crisis, budgets of traditional major donors are under pressure making it more difficult to mobilize public funding[10] for financing infrastructure projects. Therefore, all development stakeholders need to redefine their roles and identify new mechanisms in financing infrastructure. Some studies[11] are pointing to innovative methods such as infrastructure bonds, sovereign wealth funds, pension funds, project preparation facilities, public-private partnerships, guarantee products, climate funds and infrastructure sukuk. It is against this background that ACBF, is undertaking a series of policy-oriented studies that aim at identifying, documenting and sharing innovative methods for financing regional infrastructure in Africa with the present call focused on the energy sector.
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