NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF)
- Date of agreement: September 2004
- Current volume of the fund: US$ 46 million
- Financial contributors: Canada (CAD 10 million – equivalent to USD 10.29 million), Denmark (DKK 17.7 million – equivalent to USD 3.3 million), Germany (Euro 1 million), Norway (NOK 45 million – equivalent to USD 8.16 million), Spain (Euro 2 million) , UK (GBP 5 million – equivalent to USD 3.2 million), USAID (USD 1 million), AfDB (UA 6.3 million – equivalent to USD 9.9 million) and Danish Fund for Technical Assistance (DKK 5 million – equivalent to USD 0.9 million)
Background and Objectives
The NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF) Special Fund aims to assist African countries, Regional Economic Communities (RECs), specialized agencies and related institutions by providing grant resources for: (i) preparing high quality and viable regional/continental infrastructure projects with a view to requesting financing from public and private sources; (ii) developing a consensus and partnership for project implementation; and (iii) promoting infrastructure projects and programs aimed at enhancing regional integration and trade. The IPPF directly contributes to the objectives of the MTS, Regional Integration Strategy which retained regional infrastructure as a strategic priority sector. In addition, the regional focus of the NEPAD-IPPF makes it a key contributor to regional integration by interconnecting the infrastructure of countries and regions of Africa.
Areas of Focus / Sub-Sectors
The NEPAD-IPPF supports regional infrastructure development projects in the following sectors: transport, energy, ICT, and water resources management. The activities eligible for financing under the Fund are: (i) prefeasibility studies; (ii) feasibility studies; (iii) project structuring; (iv) capacity building for infrastructure development; and (v) facilitation and creation of an enabling environment for regional infrastructure development.
All RMCs of the Bank Group, RECs and specialized regional/continental institutions for infrastructure development are eligible for the NEPAD-IPPF Special Fund resources. The proposed activity must aim to support regional infrastructure development in the focus areas cited above.
Results and Milestones
The Fund's overall performance has been strong in terms of number of projects approved, disbursements, implementation, resources mobilization, partnership, and visibility. To date, a total of 43 projects have been approved for total commitments of US$ 29.469 million across regions. Disbursement has increased from 20% in 2007 to reach 49% of committed funds by the end of 2010, reflecting the implementation level on the ground. The preparation of 16 of the 43 projects has been completed and some of those are under physical implementation (an investment worth more than US$ 5 billion) as a result of NEPAD-IPPF support.
Key achievements include the: (i) Benin -Togo- Ghana Electricity Interconnection Project, (ii) Kenya-Uganda Oil Pipeline Project, (iii) Zambia-Tanzania-Kenya Power Interconnection Project, (iv) East African Submarine Cable (EASSy) Project, (v) OMVG Electricity Project, (vi) ItheziThezi and Kariba North Bank (SAPP) securing financing through a PPP, Ghana-Burkina power interconnection project, etc.
Due to this success, new donors have joined the Fund which now counts among its members Canada, Denmark, Norway, UK (DFID), Germany and Spain in addition to AfDB. Total capital of the Fund has reached US$ 46 million. The challenge is now to increase the capital of the Fund to meet the growing needs for bankable projects.
Administration and Governance Structure
- The instrument establishing the NEPAD-IPPF sets the AfDB as a trustee to serve as legal owner and holder in trust of the funds, assets and receipts constituting the fund's resources and to manage and apply these according to the provisions of the instrument.
- The AfDB Board of Directors is assigned a decision making role in the management of the Fund.
- The Oversight Committee (OC) of seven members was established. It is comprised of three representatives from the contributing donors (a member country of the Bank, or any country eligible to be a member country, as well as an organization acceptable to the Bank, may make contributions to the NEPAD-IPPF), two members representing the African Union and the NEPAD Secretariat, and two members representing the Bank. The OC provides general policy direction for NEPAD-IPPF activities. Its main function is to review the operational focus, the proposed areas of intervention and to ensure consistency with the Fund's policy thrust. The OC also reviews the annual report of activities financed through the Fund to ensure consistency with the NEPAD mandate and regional integration.
Major Activities in 2011-2015 / Additional Resources Required
Concerning Facility governance, the Oversight Committee recommendations were implemented in 2010.
Thus, the Review of Facility activities after six years of existence was carried out by an independent consultant, who made a number of recommendations to ensure its efficient management. Bank Management endorsed most of the recommendations. One of the key recommendations of the Review concerned the preparation of a Strategic Business Plan (SBP) for Facility activities over the 2011-2015 period. This Plan was prepared and will be implemented starting 2011.
The SBP has two main themes. The first is a shift in emphasis away from processing volume towards the achievement of outcomes and impact. In the past, IPPF has been largely a grant processing facility, and has not given sufficient priority to following projects through to financial closure and implementation. The second theme is to improve the efficiency of IPPF. The additional requirements to fund IPPF's grants to beneficiaries amount to $147 million over the period of the SBP.
Experiences, Challenges, and Ways Forward
Regional Infrastructure projects preparation require huge resources. The balance of the NEPAD-IPPF is inadequate to meet existing demands. Thus, the key priority of the Fund is the mobilization of additional resources from the donors that are interested in infrastructure development.
Technical Department and Task Manager
Bamory Traoré, NEPAD-IPPF Coordinator, NEPAD, Regional Integration and Trade Department
Tel: (216) 7110 2223
Ressource Mobilisation and External Finance Department
Serign Cham Tel: (216) 7110 2650.
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2012 - NEPAD-IPPF - Annual Report (1.8 MB)