Uche Usim, Abuja
A new window to improve the viability of commercial projects in Africa has opened as the African Export-Import Bank (Afreximbank) has unveiled a $15 million facility aimed at increasing the availability of viable, well-prepared, attractive and bankable projects on the continent.
The initiative, called the Afreximbank Project Preparation Facility (APPF), was launched in Johannesburg, South Africa, recently on the sidelines of the Africa Investment Forum.
It to make projects attractive to investors as part of efforts to swell Foreign Direct Investment into the continent.
It will provide technical and financial support to early stage companies in the preparation and development of projects from conceptual stage to bankability stage, the point at which such projects can attract interest from equity investors and debt financiers.
Speaking during the launch, Afreximbank President Prof. Benedict Oramah said that the facility would support transactions that sought to implement logistical platforms that supported export growth and diversification, or facilitated the assimilation of African commodities into global value chains, or increased the volume and flow of tradeable goods and services along Africa’s trade corridors.
According to President Oramah, the facility supports the Afreximbank’s mandate and strategy which seeks to promote intra-African trade, and industrialization and export development activities in the continent.
Also speaking, Tshepo Mahloele, Chief Executive Officer of Harith General Partners, a leading pan-African infrastructure developer, lauded the APPF as “a bold step in the right direction to assist Africa to unleash its full potential through de-risking of investments early on in the project preparation cycle”.
Mr. Mahloele, who noted that the project preparation step was often overlooked in the pursuit of quick returns, said that Harith had ensured efficient and professional preparation of infrastructure projects. According to him, Africa has long been at the mercy of poor planning, leading to infrastructure project backlogs that has limited GDP growth by at least 2 per cent per annum.
Afreximbank’s intervention will complement ongoing project preparation initiatives and culminate in shortening the project preparation cycle, thereby fast-tracking Africa economic development, he said.
Zitto Alfayo, Manager, Project Finance, said that the APPF would be operated on full cost recovery basis and would be primarily open to African governments, public-private partnerships and private corporates.
The specific sectors of intervention were activities related to development of logistical platforms, such as industrial parks, value added projects supporting manufacturing and services exports, tradeable services, ICT and trade enabling infrastructure encompassing energy, transport and logistics sectors.
Also participating in the launch ceremony from Afreximbank were Kofi Adomakoh, Director, Project Finance; Vitalis Ekene, Special Assistant to the President on Banking and Special Initiatives; and Ayo Mubarak of the Project Finance and Export Development Department.