The 2019 Annual Meetings of the African Development Bank Group will be held from 11-14 June 2019, in Malabo, Republic of Equatorial Guinea. Find out more


Kenya Menengai Geothermal Project

Immediately post-conflict, construction is generally the first sector to receive FDI. Infrastructure is extremely weak across the region, but the ambition to improve is creating investment opportunities in both energy and transport.

The Horn has large infrastructure deficits and performs poorly against other African countries, as assessed by the African Infrastructure Development Index (AIDI). Low AIDI scores indicate low access to improved infrastructure. But infrastructure in the Horn has been improving. Between 2014 and 2016, improvements in ICT infrastructure have given Ethiopia and Sudan the largest gains for countries in the Horn in the AIDI.

The governments of Djibouti, Ethiopia, Eritrea and Somalia intend to increase infrastructure investment in their national development plans. Recent external investments have largely gone to Ethiopia for electricity generation and transmission projects valued at USD 1.9B.

The Horn of Africa Initiative (a regional infrastructure plan created by the Intergovernmental Authority on Development) has facilitated infrastructure investment although gaps remain. Projects under preparation still need an investment of USD 1.4B and projects not yet prepared need a USD 1.3B investment.

Potential entry strategy for new investors:

  • Country governments select the required projects, in association with Export-Import Bank of Korea (EXIM Bank), that support Korean companies’ involvement in overseas infrastructure development.
  • Korean firms could engage with contracts for construction and management of infrastructure, based on development bank financing.
  • The Economic Development Cooperation Fund of EXIM Bank could incentivize Korean investors to participate in infrastructure investments. Korea has signed a co-financing agreement with the AfDB valued at USD 600M to support Korean firms investing in Africa.

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