Subnational Finance Department in Africa
Africa is a continent with particularly strong developmental needs. According to a United Nations’ Human Development Report, only 56 percent of people living in Sub-Saharan Africa had sustainable access to an improved water source in 2004. A World Energy Outlook report estimated that only 24 percent in Sub-Saharan Africa had access to electricity in 2002.
The Subnational Finance Department is helping to address these needs. A combined initiative of the World Bank and IFC, the department helps deliver and strengthen key infrastructure services such as water, transportation, gas and electricity by providing financing and capital market access to regional or local governments and their enterprises.
While the World Bank and IFC have traditionally worked with national governments or private institutions, the SFD has taken a novel approach to development assistance by directly financing states, provinces, municipalities and service providers, such as water and sanitation utilities.
Getting Results |
| By working deeper within layers of government – and with the entities actually delivering services - the SFD can target funding and expertise closer to those who need it most: the millions who lack reliable access to water, power or basic services. |
Using this unique approach, and by bringing together World Bank public policy experience and IFC's credit culture and market expertise, the SFD aims to fill a yawning gap in a potentially large market where opportunities for developmental impact are immense.
Launched in November, 2006, the SFD has established itself by funding a variety of utilities projects around the globe, including a water conservation project in Mexico, a power project in China and a schools energy efficiency program in Hungary.
Activities and Projects in Africa
The department’s activities in Africa demonstrate how it can help municipalities advance towards increased use of market-based resources for financing investment needs and, ultimately, strengthening infrastructure and improving quality of life.
The SFD offers its clients the full range of IFC investment products, including loans, partial credit guarantees, risk-sharing facilities, securitizations, equity and other hybrid instruments.
While cost-effective financing solutions are individually tailored for clients, the SFD also offers various forms of technical assistance to smooth the flow of a project’s implementation. Assistance comes in many forms: it might mean training key officials, helping clients obtain credit ratings or providing financial advisory services for project structuring.
Whatever methods of financial and/or technical assistance the SFD offers its clients, the end goal is always the same: to strengthen the borrowers’ ability to deliver key infrastructure services such as water, wastewater management, transportation, gas and electricity and to improve their efficiency and accountability as service providers.
Project Examples:
City of Johannesburg
Buffalo City, South Africa
For more information contact:
Houtan Bassiri
Communications Officer
Johannesburg, South Africa
Tel: +27-11-731-3179
Email: hbassiri@ifc.org
