AfDB Approves USD 34 Million for Nigeria’s PPP Infrastructure Capacity Development
Tunis, 9 March 2011 - The Board of Directors of the African Development Bank (AfDB) approved on Wednesday, 9 March 2011 in Tunis, a UA 21.8-million (USD 34.3 million) loan to Nigeria to finance capacity building for Public-Private Partnerships (PPP) in infrastructure sectors, particularly in power and transport. The Federal Government of Nigeria (FGN) has identified these sectors as key to the country’s overall development, and seeks to expand growth by involving the private sector through PPP projects.
PPPs are seen as part of the solution for Nigeria’s infrastructure deficit because of their ability to attract finance, share risks, mobilize technical and managerial know-how, avoid the usual cost escalation associated with conventional construction contracts, and change the project focus from short- to long-term.
The success of PPP projects lies in creating an enabling environment for both the public and the private sectors. The public sector must prepare well-structured and bankable PPP projects to attract private investment while safeguarding the public interest. This is best achieved by building appropriate capacity in the public sector.
The loan will fund activities to build capacity for PPP projects in the ministries, departments and agencies (MDAs) at the federal and state levels. The project will contribute to increased institutional capacity to prepare and successfully implement PPP projects in the power and transport sectors and will strengthen cooperation between federal and state government institutions in charge of infrastructure delivery.
Over the next three years, the project will be implemented on three levels: 1) providing general awareness on PPP projects to all Nigerian states, including civil society, private sector, NGOs, media and MDAs at federal level; 2) providing training on the fundamentals of PPP; and 3) providing specialized capacity building support to selected states and MDAs on transactions and related issues.
The loan is aligned with Nigeria’s development agenda and the Bank’s current Country Strategy Paper for Nigeria. It aims to create conditions to develop private sector activities in the non-oil sector and to make rapid progress in MDG targets, such as increased energy access, poverty reduction, increased access to education, increased access to health services and better global partnerships.