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It is estimated that the under-investment in Africa’s infrastructure cuts national economic growth by two percent every year and reduces business productivity by as much as 40 percent. Power is in particular need of investment, as are other critical sectors such as health, transportation, and water.
These investment needs are far too large for the public sector to address alone. Public-private partnerships are a mechanism to attract international expertise and mobilize private sector capital to address the huge infrastructure needs in Africa.
In partnership with the Japan International Cooperation Agency and the Development Bank of Southern Africa, IFC recently held a seminar to increase the participation of Japanese companies and South African partners in public-private partnerships to help address Africa’s infrastructure needs.
The seminar brought together representatives of Japanese companies, South African partners, government, JICA, DBSA, and IFC to discuss opportunities and challenges for private sector participation in infrastructure projects in Sub-Saharan Africa.
“Well-structured public-private partnerships in physical and social infrastructure are a priority for IFC because they can help African governments raise the large sums of capital required to meet infrastructure needs in energy, health, logistics, transportation, and water and sanitation,” said Saleem Karimjee, IFC Country Manager for Southern Africa at the event.
Strong partnerships between the public sector and private sector, as well as with development finance institutions, are an important factor for PPPs to be successful. In this regard, Japan is one of IFC’s most important partners, and over the years IFC has worked very closely together with Japan, most recently to develop public-private partnerships in countries such as Lesotho.
JICA aims to contribute to the promotion of international cooperation as well as the sound development of Japanese and global economy by supporting the socio-economic development, recovery or economic stability of developing regions. This includes preparatory surveys for PPPs in infrastructure, a scheme for formulating project plans based on proposals from the private sector.
IFC’s PPP Advisory Services focuses on structuring PPP transactions that help governments leverage expertise and finance, balance the needs of investors and the community, and protect the environment. IFC serves as lead advisor to recommend a strategy for private sector participation, conduct due diligence, suggest policy changes, market transactions to potential investors and operators, and manage the bidding process ensuring transparency and competitiveness.
For more information, visit www.ifc.org/ppp or http://www.jica.go.jp/english/.