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AU Ambassadors reflect on resource mobilization for NEPAD IPPF Special Fund
African Ambassadors accredited to the African Union (AU) met at the AU Headquarters in Addis Ababa, Ethiopia on Friday, November 17, 2017 for a consultative meeting on resource mobilization for the Special Fund of the New Partnership for Africa’s Development responsible for Infrastructure Project Preparation (NEPAD-IPPF).
The meeting jointly organized by the African Union Commission (AUC) and the African Development Bank (AfDB) in collaboration with the United Nations Economic Commission for Africa (ECA) brought together 45 representatives of African Union Member States, to review the progress in the implementation of the Programme for Infrastructure Development in Africa (PIDA) from the perspective of increasing the stock of bankable, investment-ready projects as a way of fostering the accelerated financing and implementation of PIDA.
Speaking at the opening of the Consultative Meeting, Cheikh Bedda, Director for Infrastructure and Energy at the African Union Commission, thanked the Ambassadors for their commitment to the cause of Africa’s infrastructure development as demonstrated by the high turnout at the meeting.
Bedda recalled that African Heads of State and Government approved the Programme for Infrastructure Development in Africa in Addis Ababa, Ethiopia, in January 2012 at the African Union Assembly as the continental initiative to plan, prepare, finance and deliver Africa’s priority infrastructure in the key infrastructure sectors of energy, transport, ICT and trans-boundary water resources on a coordinated and integrated basis.
Speaking at the forum, the representatives of both United Nations Economic Commission for Africa and the African Development Bank called for enhanced coordination and strengthened partnership to accelerate the delivery of Africa’s infrastructure using innovative financing approaches and creating more space for private-sector participation.
During the deliberations, the Ambassadors were informed that in approving PIDA, the Heads of State took due cognizance of the various infrastructure initiatives in Africa which were important to the effective delivery of PIDA. One such initiative was NEPAD-IPPF, a Special Fund hosted by the African Development Bank (AfDB) and established in 2005, which supports African member countries to prepare regional infrastructure projects to make them bankable to attract financing and investment. The Heads of State also called for promoting innovative financing mechanisms reflecting real commitment by Africa to speed up infrastructure development on the continent and in particular, called upon the AUC, to define modalities for Member States’ contributions to the Special Fund of NEPAD-IPPF.
The meeting was informed that NEPAD-IPPF was one of Africa’s success stories and that since its establishment in 2005, it had mobilized about US $100 million from donors supporting the Special Fund, including Canada, Germany, the United Kingdom, Denmark, Norway and Spain.
According to the speakers at the meeting, the preparation resources required for the Priority Action Plan of PIDA (PIDA-PAP) had an investment portfolio of US $68 billion to be achieved by 2020. Of this amount, projects with an investment value of about US $20 billion had been realized to date, leaving a financing gap estimated at about US $40 billion. This in turn, translated into financial resources required for project preparation of between US $1billion to US $2 billion by 2020 using a ratio of between 2% to 5% of investment costs.
Given this reality, African Ministers of Infrastructure, Transport, Energy and Tourism met in Lomé, Togo, in March 2017 and adopted the Declaration of Lomé, which reiterated the need for African States to contribute and sustain project preparation and development by making direct financial contributions to the NEPAD-IPPPF Special Fund. The contribution would strengthen early stage project preparation and delivery of bankable infrastructure projects to attract investment and financing for infrastructure across the continent.
In concluding, the Ambassadors welcomed the briefing and information sharing and noted that this should be done on a regular basis so that Member States are kept updated of developments and are positioned to be proactive in supporting and responding to the efforts of various stakeholders involved in the implementation of PIDA. They also commended the cross-institutional collaboration as evidenced by the joint briefing by the AUC, AfDB and ECA and urged that this coordinated partnership approach be sustained.