ICA PROPOSAL FOR THE CREATION OF A

Prepared for the Infrastructure Consortium for Africa (ICA), October 2013

ICA PROPOSAL FOR THE CREATION OF A

PROJECT PREPARATION FACILITIES NETWORK

Assessment of options for the ICA to create a Project Preparation Facilities Network 1

1. INTRODUCTION

This Report was produced on behalf of the Infrastructure Consortium for Africa (ICA) as part of an

assignment aimed at providing the ICA with options - and ultimately a most favoured one - to create

a Project Preparation Facility Network (PPFN). It reviews the work already undertaken by the ICA in

2011/2012 - in response to the recommendations of the G20 Development Working Group -, in

particular

1) the ICA Project Preparation Fund Finder, an online tool available on the ICA website that

has been based on a mapping of Project Preparation Facilities identified in the African

infrastructure sector, and

2) the assessment of existing Project Preparation Facilities for Africa carried out by the ICA,

based on a mandate from the G20, analysing the volume of funds available, the

accessibility of the facilities and their efficiency.

In addition, it gives an overview of the facilities active in the field of infrastructure project

preparation financing on the African continent and assesses available options for the creation of a

PPFN, by way of analysing room for alignment, cooperation and value added as well as potential

costs involved for setting up and operating the network.

The results will be presented and discussed at the Annual Meeting of the ICA in November 2013 to

decide on the most favoured option and the way forward.


2. EXECUTIVE SUMMARY

A lack of adequate efficient project preparation funding for infrastructure in Africa has been

recognized by both the G20 through its High Level Panel on infrastructure and the multilateral

development banks (MDBs) in their Action Plan. Given the scale and importance of the infrastructure

challenge in developing countries, the G20 will continue to support the efforts to improve project

preparation facilities, also in view of the need to optimize sources of finance.

The G20 High Level Panel has requested the ICA to investigate this issue further, leading to the ICA to

carry out the study on the assessment of existing PPFs in Africa, both collectively and individually.

Overall, part of the assessment was also to identify, where possible, ways of coordinating,

rationalizing and consolidating PPFs to improve overall performance. As the mapping of existing

facilities has shown, several factors constitute persistent obstacles to infrastructure development:

Lack of funding for the initial phase of project development

Lack of orientation regarding the “tunnel of funds” for preparation phases

Lack of basic information on existing funding instruments and facilities;

Lack of information on projects underway (needing supplementary funding)

One outcome of the work undertaken has been the recommendation for the ICA to create a PPF

network for Africa. The ICA members will need to decide on a possible option based on

recommendations put forward by the ICA Secretariat. The most favoured option will be presented to

ICA Members for discussion at the ICA Annual Meeting in Arusha, Tanzania, in mid-November 2013.

Following the meeting, and decisions made, the ICA Secretariat, with its strong mandate from the

G20 and track record, would move on to the creation of the PPF network, in line with the goals laid

down in the forthcoming ICA Business Plan for 2014-2016.

The present report has reviewed previous work and looked into the rationale and options to create a

Project Preparation Facilities Network. For the creation of the network, two options have been

assessed: 1) inclusion of all PPFs and stakeholders, and 2) management of the network by the ICA

Secretariat versus a new initiative or newly founded entity. The preferred option for the creation of

the network should consist initially of a core group of 10-12 active facilities (out of the identified

sample of 50-60). It has been recognised, that there is a need to involve all stakeholders and to have

a conference in order to define the measures and deliverables as well as the exchange and

knowledge sharing approach of the network.

Once implemented with PPFs, the network can be expanded to more stakeholders (e.g. after year 1

of operations). For the management of the network, the ICA Secretariat is best positioned to operate

and implement the network in a quick and efficient manner (and could then support a championing

PPF accordingly after year 1).

Having looked into the options of implementing the Network, the optimal solution promising the

largest benefits would be a non-virtual network (complemented by virtual exchanges), with funding

and resources from the budget of the ICA Secretariat for the first year, and for the subsequent years

with funding resources from both ICA secretariat and PPFs.


Next to the sharing of knowledge, best practices and the dissemination of work done with

stakeholders, there are particular benefits for the network to deliver:

1) An improved, efficient, allocation of existing funding to projects (along the project cycle –

Tunnel of Funds), and

2) a better informed allocation of future funding to existing, or aligned PPFs.

It is suggested that the network meet twice a year (at least in year 1 of implementation):

1) For workshops addressing the output of the network, e.g. at project level, and

2) With all stakeholders, e.g. at the margins of the ICA Annual Meetings.

The estimated costs for three years of operation are comparatively low. It would be prudent to

ensure the availability of financial and human resources right from the start in order to facilitate an

efficient implementation of the network. The total costs may vary since the full level of outputs (e.g.

knowledge products) and the format of meetings (workshops and with stakeholders) is not yet

exactly known.

If the network is implemented as suggested, the ICA would be in the position to add value by fulfilling

its role in coordinating, advocating, facilitating – and ultimately in mobilizing resources. On a regular

basis, there will be reporting back about progress by the ICA to the G20.

There are several activities that are recommended for the network to perform:

- Systematic collection of data, information and reporting about PPFs and their activities

- Active use, systematic update and regular dissemination of the ICA Fund Finder – and

dissemination of all deliverables with stakeholders and clients in the sector

- Development of measurable benchmarking among PPFs (e.g. cost, output, impact)

- Delivery of knowledge products (e.g. based on data collection), “Best Practices” for PPFs

- Cooperation on projects (Tunnel of Funds approach to fill gaps, pipeline sharing and

syndication on large programs such as PIDA).

If agreed, the implementation of the network by the ICA could be done following the steps below

during the first year of operations:

1) Drafting of agenda (roadmap), budget, and resource planning by ICA Secretariat– with PPF

partners to be submitted to the first inaugural meeting of PPFs.

2) Start of updates of the Fund Finder and data collection – with PPF partners

3) Subject to approval by the inaugural meeting ICA will commission a study on PPF

benchmarking (focus and performance)

4) Physical Meeting / Workshop of PPFs (with an activities related agenda: Programme of

activities which will include annual report on PPFs and other deliverables)

5) Implementation of the decisions of the first inaugural PPFs meeting

7) Reporting back to G20 about progress

8) Stakeholder Meeting (at ICA Annual Meeting) - reporting and reviewing of first deliverables,

scheduling of activities for the second year


3. TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................................... 1

2. EXECUTIVE SUMMARY ......................................................................................................................... 2

4. LIST OF TABLES, FIGURES, AND ANNEXES ........................................................................................... 5

4. LIST OF ACRONYMS AND ABBREVIATIONS .......................................................................................... 6

5. BACKGROUND ..................................................................................................................................... 8

6. METHODOLOGY ................................................................................................................................... 9

7. REVIEW .............................................................................................................................................. 10

7.1. ICA PROJECT PREPARATION FUND FINDER .................................................................................... 10

7.2. ICA ASSESSMENT OF PROJECT PREPARATION FACILITIES IN AFRICA ............................................. 13

8. OPTIONS FOR THE CREATION AND IMPLEMENTATION OF A PROJECT PREPARATION NETWORK ... 17

8.1. OPTIONS AND ACTIVITIES FOR A PROJECT PREPARATION NETWORK ........................................... 18

8.2. BENEFITS ......................................................................................................................................... 20

8.3. EFFICIENCY...................................................................................................................................... 21

8.4. IMPACT ........................................................................................................................................... 23

8.5. VALUE ADDED ................................................................................................................................. 23

9. OPTIMAL OPTION FOR A PROJECT PREPARATION NETWORK .......................................................... 24

9.1. IMPLEMENTATION AND ACTIVITIES ............................................................................................... 24

9.2. RESOURCES AND BUDGET .............................................................................................................. 25

10. CONCLUSION & RECOMMENDATIONS ........................................................................................... 26

11. ANNEXES .......................................................................................................................................... 27


4. LIST OF TABLES, FIGURES, AND ANNEXES

TABLE 1 Total number of project preparation facilities by hosting group 10

TABLE 2 Number of project preparation facilities by hosting organization 11

TABLE 3 Number of project preparation facilities and periods of formation 11

TABLE 4 Project Preparation Facilities by focus 13

TABLE 5 Activities of the Project Preparation Facilities Network 20

TABLE 6 Benefits of activities of the Project Preparation Network 21

TABLE 7 Responsibilities: Implementation and operation of the PPF Network 22

FIGURE 1 The “Tunnel of Funds” Concept 14 ANNEX 1 List of Multilateral Organizations (Project Preparation Activities) 27 ANNEX 2 List of identified Project Preparation Facilities for Africa, 2012 29 ANNEX 3 Draft Budget of the PPF Network (Estimated costs, 3 years) 31


4. LIST OF ACRONYMS AND ABBREVIATIONS

ACP African, Caribbean, and Pacific grouping

ADF African Development Fund

ADF PPF African Development Fund Project Preparation Facility

AEF Access to Energy Fund

AFD Agence Française de Développement (France)

AfDB African Development Bank Group

AfDB AWF African Water Facility

AFFI (TAF) Arab Financing Facility for Infrastructure (Technical Assistance Facility)

AIB African Investment Bank

AICD Africa Infrastructure Country Diagnostic

AIKP Africa Infrastructure Knowledge Programme

AIP Africa Infrastructure Program

BOAD Banque Ouest Africaine de Développement (West African Development Bank)

COMESA Common Market for Eastern and Southern Africa

COMESA-EAC-SADC

TTA

Common Market for Eastern and Southern Africa-East African Community-Southern

African Development Community Tripartite Trust Account

DBSA Development Bank of Southern Africa

DBSA DF Development Bank of Southern Africa Development Fund

DBSA-EIB PDSF Development Bank of Southern Africa-European Investment Bank Project Development

and Support Facility

DevCo Infrastructure Development Collaboration Partnership Fund

EADB East African Development Bank

EBID Economic Community Of West African States Bank for Investment and Development

EC European Commission

ECOWAS Economic Community Of West African States

EIB European Investment Bank

EIB WPPF European Investment Bank Water Project Preparation Facility

ESMAP Energy Sector Management Assistance Program

EU European Union

EU-Africa ITF European Union-Africa Infrastructure Trust Fund

FAPA Fund for African Private Sector Assistance

FASEP French Development Agency Fund for Assistance to the Private Sector

FEMIP Facility for Euro-Mediterranean Investment and Partnership

FMO Netherlands Development Finance Company

GEF Global Environment Facility

GPOBA Global Partnership on Output-Based Aid

ICA Infrastructure Consortium for Africa

ICT Information and Communication Technology

IDA International Development Association (World Bank)

IFC International Finance Corporation (World Bank)


IFC AS PPP International Finance Corporation Advisory Services in Public-Private-Partnerships

IFC MF International Finance Corporation Municipal Fund

IsDB TAF Islamic Development Bank Technical Assistance Fund

JBIC Japan Bank for International Cooperation

JICA Japan International Cooperation Agency

KfW Kreditanstalt für Wiederaufbau (Germany)

KfW CF Kreditanstalt für Wiederaufbau Carbon Fund

LOC

MDBs

Line of Credit

Multilateral Development Banks

MDGs Millennium Development Goals

NEPAD New Partnership for Africa’s Development

NEPAD IPPF New Partnership for Africa's Development Infrastructure Project Preparation Facility

NEPAD NIIF New Partnership for Africa’s Development Infrastructure Investment Facility

NGOs Non-Governmental Organizations

NPCA New Partnership for Africa’s Development Planning and Coordinating Agency

NTCF Nigerian Technical Cooperation Fund

PHRD TA GP Japan Policy and Human Resources Development Fund Technical Assistance Grant

Program

PIDA Programme for Infrastructure Development in Africa

PIDG (TAF) Private Infrastructure Development Group (Technical Assistance Facility)

PPF

PPIU

PPDU

Project Preparation Facility

Project Preparation Implementation Unit

Project Preparation Development Unit

PPIAF Public Private Infrastructure Advisory Facility

PPP Public Private Partnership

REC Regional Economic Communities

RSA Republic of South Africa

SADC Southern African Development Community

(SADC) PPDF

SEFA (AFDB)

Project Preparation and Development Facility

Sustainable Energy Fund for Africa

SMEs Small and Medium-Sized Enterprises

SSA Sub-Saharan Africa

SSATP Sub-Saharan Africa Transportation Program

TAF Technical Assistance Facility

UN United Nations

UNEP

USAID (AIP)

United Nations Environment Program

United States Agency for International Development (Africa Infrastructure Program)

USD United States Dollar

WAPP West African Power Pool

WB World Bank Group

WSP Water and Sanitation Program


5. BACKGROUND

The Infrastructure Consortium for Africa (ICA) was launched at the G8 Gleneagles summit in 2005.

The membership is the G8 countries, the World Bank Group, the African Development Bank (AfDB)

Group, the European Commission, the European Investment Bank and the Development Bank of

South Africa. African institutions such as the African Union; the New Partnership for Africa’s

Development (NEPAD) and the Regional Communities all participate as observers in the meetings of

the consortium. The African Development Bank (AfDB) has been designated to represent African

stakeholders in the Consortium and has hosted the ICA Secretariat since 2006. At the May 2011

Annual meeting the decision was made to enlarge ICA membership from G8 to G20.

The ICA is a major initiative to accelerate progress to meet the urgent infrastructure needs of Africa

in support of economic growth and development. It addresses both national and regional constraints

to infrastructure development with an emphasis on regional infrastructure, recognizing the

challenges at this scale. The Consortium is intended to make its members more effective at

supporting infrastructure by pooling efforts in selected areas such as information sharing, project

development and good practice. Although the ICA is not a financing agency, the consortium acts as a

platform to broker more financing of infrastructure projects and programs in Africa, including for

Project Preparation and with an increasing focus on PIDA. The forthcoming business plan of the ICA

for 2014-2016 will therefore focus more strongly on the coordination, preparation and resource

mobilization for PIDA, while expanding activities and membership from G8 to G20.

In previous years, the ICA has undertaken numerous activities aiming at improving the environment

for infrastructure investment. Its goal has been to close the financing gap and align ICA member

activities to African priorities in infrastructure on the one hand, and close the gap between project

promoters and governments on the other. In light of the infrastructure gap in Africa, there is ample

need to mobilise further resources and to align existing project preparation facilities to operate

efficiently in the allocation of existing resources to existing needs1. In order to accelerate progress, in

particular with regard to making projects bankable in a more reliable and swift manner, the role of

project preparation for infrastructure in Africa has been revisited. With the Programme for

Infrastructure Development in Africa (PIDA) moving into the implementation phase with a Priority

Action Plan (PIDA PAP), further resources for project preparation will be required and will have to be

aligned efficiently2.

A lack of adequate project preparation funding and alignment for infrastructure has been recognized

by both the G20 through its High Level Panel on infrastructure and the multilateral development

banks (MDBs) in their Action Plan, as a key constraint to infrastructure development and growth in

Africa. G20 reports specifically state that the support provided by PPFs is highly fragmented, with an

apparent large number of facilities which are not aligned. Given the scale and importance of the

infrastructure challenge in developing countries, the G20 will continue to support the efforts to

1 The Africa Infrastructure Knowledge Program (AIKP, previously the ICA-commissioned Africa Infrastructure

Country Diagnostic, AICD) gives an overview (sectors and regions) of the state of infrastructure and funding requirements for African infrastructure (www.infrastructure.org). 2 PIDA - developed by AUC, NEPAD, AfDB, COMESA and RECs - was endorsed by African Heads of State in January 2012. It now consists of 51 Regional Programs, which have been broken down into 400-500 single projects. 5-7% of total costs are estimated to be for project preparation until 2020 (www.au-pida.org).


improve project preparation facilities, also reinforcing the importance of public-private-partnerships

and the need to optimize sources of finance3.

In response, the G20 High Level Panel has requested the ICA to investigate this issue further, leading

the ICA to carry out an assessment of existing PPFs in Africa, both collectively and individually. As the

assessment of existing facilities has shown, several factors constitute persistent obstacles to

infrastructure development:

Lack of funding for the initial phase of project development

Lack of orientation regarding the “tunnel of funds” for preparation phases4

Lack of basic information on existing funding instruments and facilities;

Lack of information on projects underway (needing supplementary funding)

Overall, part of the study on the assessment was also to identify, where possible, ways of

coordinating, rationalising and consolidating PPFs to improve overall performance.

It was subsequently agreed during the ICA Annual Meeting 2012 to consider the creation of a

network of PPFs. The ICA will need to decide on a possible option based on recommendations put

forward by the ICA Secretariat. The most favoured option will be presented to ICA Members for

discussion at the ICA Annual Meeting in Arusha, Tanzania, in mid-November 2013. Following the

meeting, and decisions made, the ICA Secretariat would move on to the creation of the PPF network

for Africa.

6. METHODOLOGY

The report and presentation to ICA Members are based on the research (reports, websites, and

interviews) and evaluation of an individual consultant. With no similar PPF networks known to exist

currently, it mainly draws on the conclusions and sources of information from previous work

conducted and / or commissioned by the ICA Secretariat5 which will be critically reviewed:

1) ICA Project Preparation Facility Mapping Report from 2012, compiled internally in preparation of

data input to the Project Preparation Facility Fund Finder established on the ICA website (and based on the

earlier ICA PPF guide published in 2006), and

2) ICA Assessment of Project Preparation Facilities for Africa (November 2012, with a gap analysis

and findings on relevance, effectiveness, efficiency, adequacy and sustainability), and

3) G20 papers6, in particular recommendations out of the St. Petersburg Development Outlook with

the work of the “Working Group on Development” consistent with the G20 focus on measures to promote

economic growth (including infrastructure).

3 G20 Saint Petersburg Development Outlook, 2013 4 Tunnel of Funds: Concept of mobilizing complimentary funds from other key PPFs, helping projects come to term

along the project cycle. The “tunneling of funds” is a mechanism that allows a better distribution and repartition of

funds from various partners and investors, in order to carry out a full project (NEPAD-IPPF, AfDB). 5 ICA sources: ICA Annual Reports, also: James Leigland / Andrew Roberts (“The African project preparation gap“,

March 2007 PPIAF Gridlines no. 18), or the ICA/PPIAF Project Guide 2006. 6 Other G20 papers include the Report of the High Level Panel from and the Multilateral Development Bank Action Plan, both from 2011.


7. REVIEW

Starting with the PPF Guide from 2006 (by ICA and PPIAF), the ICA has provided unprecedented

knowledge about the multitude of PPFs in Africa, followed by the mapping of facilities in preparation

of the Fund Finder and the subsequent assessment of the PPFs. Overall, the Fund Finder was a first

response – and important step – to address the need to operationalize cooperation of PPFs in order

to pool resources, knowledge and transparency.

As a next logical step a PPF network would further enhance the cooperation, building up on the

instrumental role of the ICA as a catalyst and the input of all ICA partners. Again, such a network

would be unprecedented and would partly respond to the G20 request to create a global network.

As far as research shows and based on available information, there is no other network of this kind

existing in the world. Hence the creation of a PPF network for Africa would path the way in

addressing the G20 request and pilot the idea at the same time. However, there are facilities with

global activities in project preparation, including a focus on Africa. It is here where links between an

African-based network and global partners can be forged.

7.1. ICA PROJECT PREPARATION FUND FINDER AND MAPPING OF PPFs The Project Preparation Fund Finder is an online operational tool – based on the mapping of existing facilities, which fosters transparency and provides orientation for a better understanding of donor facilities around the world granting project preparation funding for infrastructure in Africa. It is accessible via the ICA website (http://www.icafrica.org/en/fund-finder/the-fund-finder/). Users such as governments and investors can identify the adequate funding institutions for their projects` preparation phase. The Fund Finder will be regularly updated so as to provide information on current financial possibilities and actual disbursements relating to each facility, enabling potential fund applicants to make informed choices on where to submit their project. Mapping of existing facilities

52 Project Preparation Facilities were identified in the African infrastructure sector7 (as opposed to

23 which were identified in the ICA PPF Guide of 2006). It is important to note where these facilities

are located, also to highlight the roles of MDBs and the ICA as stated by the G20. With the largest

number of facilities (37) at the MDBs there is an enhanced role for MDBs with regard to the

cooperation and coordination around PPFs:

Table 1: Total number of project preparation facilities by hosting group

Group Total Number (52)

International Financial Institutions 3

Development Agencies/Bilateral 6

Multilateral Organizations 37

Arab Funds 1

Private & Venture Capital & NGOs 5 Source: Project Preparation Facilities Mapping Report (PPF Fund Finder), by ICA Secretariat, April 2012

7 Project Preparation Facilities Mapping Report (PPF Fund Finder), prepared for the ICA Secretariat, April 2012


The following table highlights the location of PPFs in more detail. It becomes evident, that the large

majority of facilities are hosted by ICA Members.

Table 2: Number of project preparation facilities by hosting organization

Source: Project Preparation Facilities Mapping Report (PPF Fund Finder), by ICA Secretariat, April 2012

In addition, there are reasons why the need for improved cooperation and coordination has become

so imminent in the recent past. Most of the facilities have been created after 2000 (38). Today there

is a fragmented picture of PPFs that have been created next to each other to address development

challenges in infrastructure coming from the Millennium Development Goals (MDGs) and the G8

Gleneagles summit of 20058. Consequently, there is need for improved coordination to meet an

alignment in sources of finance and operations:

Table 3: Number of project preparation facilities and periods of formation

Source: Project Preparation Facilities Mapping Report (PPF Fund Finder), by ICA Secretariat, April 2012

An overview of all facilities is given in Annex 2. Projects located in the Sub-Saharan Africa (SSA)

region are supported by 39 facilities, whereas North-African countries are supported by 31.

Out of all the facilities identified, 11 are exclusively dedicated to project preparation in SSA. Regional

Economic Communities (RECs) are eligible for 19 facilities. RECs are important cooperation partners

in view of preparing complex trans-regional infrastructure projects. Public stakeholders are the key

8 A current (2013) review of Gleneagles outcomes and commitments (G8 accountability), including infrastructure and the ICA can be found under: www.gov.uk/government/publications/lough-erne-accountability-report


beneficiary of project preparation assistance as provided by 44 facilities (Private projects are

supported by 21 facilities). Although trans-border development is particularly important in terms of

regional infrastructure and integration, the majority of facilities concentrate on national projects. A

total of 44 facilities will fund national projects, cross-border funding coming second with 35 facilities.

Regional Economic Communities have the smallest share of all, meaning that 19 facilities will

consider these as their potential partners.

Out of the total number of 52, the majority of facilities provide support for all infrastructure sectors:

32 facilities will fund project preparation in the field of energy, water, transport or communication.

Most of the remaining facilities are single sector specific (e.g. solely for water or energy). Out of the

32 facilities, 15 facilities have targeted specific sectors. Overall, the water and sanitation sector

attracts most of the facilities (44), with 8 programs designed to support water sector related

activities only. African infrastructure projects in the energy sector are eligible for support from 42

facilities. Six funds are sector specific and facilitate assistance exclusively to ventures in the energy

sector. 33 PPFs of all the facilities support transport projects. The Sub-Saharan Africa Transportation

Programme (SSATP) is the only identified programme that is specific to the transport sector. The ICT

sector attracts 33 facilities.

Furthermore, it was estimated that since 2000, the total capital eligible for funding by 27 facilities

active in African infrastructure project preparation has amounted to USD 4,3 bn. However, this figure

includes the capital available for all continents, sectors and project phases and there was no financial

data available for a number of facilities established after 2000. The cumulative total of commitments

made by 11 identified facilities that have deemed African infrastructure project preparation to be

eligible for funding amounts to USD 1,6 bn. Again, it is important to note that this does not refer

specifically to project preparation in Africa, as this figure includes all continents, as well as non-

infrastructure sectors, and covers all project phases9. As a result, the compilation of a more detailed

set of data concerning commitments and disbursements would be a useful development since this

could help to further identify gaps and challenges, and subsequently lead to improved coordination.

Operational status of the Fund Finder

As an innovative tool, the Fund Finder addresses funding for projects in energy, transportation, water

and communications technology projects, and in particular the fact that promoters often cannot not

finance the project preparation phase - meaning the entire spectrum of activities that have to take

place before an infrastructure project can be of interest to a potential financier. With data

researched by the ICA Secretariat and / or provided by ICA Members and other facilities, it is

designed to unlock an infrastructure project pipeline. The Fund Finder is a searchable database that

helps project promoters and managers locate funding to start the institutional, legal, social,

environmental, financial, regulatory, engineering and advisory services that are needed to go from a

concept to a clearly defined and properly structured project with an identification and allocation of

risk. It is to be used by both fund seekers as well as funding facilities.

9 The mapping could meet the demand to deliver an indication on total capital available for project preparation in Africa, same for commitments and disbursements. 15 of the identified facilities did not provide any financial information (on websites, annual reports or other publicly accessible sources) regarding the facilities’ funds or their status of commitments or disbursements. Many listed facilities are not pure project preparation facilities. Some provide support for later project phases or other activities; some are not exclusively operational for the African continent (e.g. facilities managed by the World Bank Group or EIB Facilities for the ACP countries). This fact intensifies the complexity to derive total amounts available for infrastructure project preparation in Africa.


The Fund Finder guides interested parties to the right project preparation facility by matching

requests (Which region or country, funding size, sector, and private and / or public beneficiaries?)

with the criteria of PPFs entered into the interactive database. The tool is designed to offer one-stop

information on active project preparation facilities. It is in line with the “Tunnel of Funds” concept

which allows a better distribution and repartition of funds from various partners and investors, i.e.

along the project cycle and the criteria for the major PPFs, in order to carry out a full project.

The online tool was first launched in October 2012, comprising of comprehensive data coming from

the most active core group10 of PPFs. It has been further revised during 2013 with regard to user-

friendliness. The ICA Secretariat keeps track of hits on the website and the enquiries made by

partners - overall there is growing interest in the tool and the particular information it offers: Lists of

Project Preparation Facilities, Project Checklist, details about PPFs. As of today, the Fund Finder

generates up to 1000 views per month and has provided the groundwork to be expanded further by

the ICA and partnering PPFs.

7.2. ICA ASSESSMENT OF PROJECT PREPARATION FACILITIES IN AFRICA

The ICA assessment of PPFs in Africa, carried out by a consulting firm, built up on the work previously

undertaken as part of the mapping for the implementation of the Fund Finder. It came up with an

even higher number of potential sources of funding for project preparation (67, however including

national PPP units) and a core group of 17 facilities (of which 12 are operational and in varying need

of replenishment – and another five being inactive, or yet to commit a substantial amounts to

projects)11, and which are predominantly housed and /or operated by ICA Members.

The core group identified is the following, including an indication of respective focus:

Table 4: Project Preparation Facilities by focus

Africa Infrastructure Project Preparation

Global Infrastructure Project Preparation

Africa Infrastructure (General)

Global Infrastructure (General)

COMESA-PPIU AFFI-TAF* EU-AITF ESMAP

DBSA-EIB PDSF* PPIAF AWF PIDG-TAF

ECOWAS PPDU* INFRAVENTURES SEFA*

NEPAD IPPF DEVCO

NEPAD PPFs

SADC PPDF*

INFRACO AFRICA

USAID AIP

* Inactive, or yet to commit material amounts (as per 2012)

Source: Assessment of Project Preparation Facilities for Africa, by ICA Secretariat, Nov. 2012

As pointed out in the assessment there are various phases in the project cycle, in which facilities are

active – not covering all phases but rather concentrating on particular activities in one stage:

10 The core of this mapping group consists of: PIDG, PPIAF, AFD/DBSA Facility, NEPAD-IPPF, AWF, EU-Africa ITF, GPOBA, Facility for Euro-Mediterranean Investment and Partnership Trust Fund, DevCo, ACP European Commission Energy Facility 1 and 2, and DBSA Development Fund. 11 This section draws mainly on the analysis and findings coming from the ICA Assessment of Project Preparation Facilities for Africa, November 2012.


1) Early Stage – Concept Development: Projects are identified and concepts developed. The

enabling environment is determined and established (legal, regulatory, and institutional).

2) Mid to late stage – Feasibility, Structuring, and transacting (Due diligence, Project

Structuring – legal and financial, Marketing, and transacting).

The provision of support at particular stages of the project cycle again refers to the concept of

“Tunnel of Funds” approach to project preparation, as highlighted in the following figure. This

concept refers to the mobilization of complimentary funds from other key PPFs in order to help

projects to come to term along the project cycle. It is a mechanism that allows a better distribution

and repartition of funds from various partners and investors:

Figure 1: The “Tunnel of Funds” Concept

Source: www.afdb.org (NEPAD – IPPF)

Mapping Analysis

There exists a remarkable diversity in PPFs, focusing on different sectors and regions but also

different phases in the project cycle. The assessment has provided a mapping analysis of PPFs which

suggests that PPF support to the early stages of the project cycle receives the least attention –

particularly where the public sector is seeking to originate and solicit private sector interest in PPPs.

Most PPFs in the core group focus on public sector initiated projects, covering a wide range of public

stakeholders (subnational, national, national / subnational PPP, regional and regional PPP) along the

project cycle, clearly targeting support in the middle to later stages of project preparation with their

products, which are mainly in grants. There is no use of risk capital for projects by PPFs as they

operate in a grant driven environment which is not incentivized among partners (thus giving a case

for a revolving fund for PPPs which governments can draw on, with resources being repaid in the

http://www.afdb.org/


event of a successful transaction). Moreover, few PPFs, such as NEPAD-IPPF or AWF, would cover all

phases of the project cycle, with a focus on the early stage.

By and large PPIAF is the only steady source of support for government-originated PPPs. Where

projects are originated by the private sector, there is often a lack of funding from PPFs for advisory

services to support governments. This is a significant gap, as projects are often originated by the

private sector in Africa, due to a lack of government capacity to do so. Moreover, private sector–

originated projects, which do not receive much support in the current landscape of PPFs, can only

access project development funding through agreements with PPFs such as InfraCo and

InfraVentures, rather than being able to access funding directly to develop projects themselves. Most

PPFs, particularly those supporting PPPs, seek to target their support in the middle to later stages of

project preparation – project structuring and transaction / execution – as these phases are easier to

address than the earlier stages and more geared towards the core activities of MDBs, which are in

funding or lending in projects.

The core group of PPFs has committed an increasing value of funds since 2005. Starting with around

10m USD in 2005, annual commitments have peaked in 2010 with more than 80 m USD12. Remaining

funding (PPF commitments) amounts to about 200m USD which is not sufficient to support larger

schemes like PIDA1314. At the time of the assessment, more than 50% of the facilities of the core

group were left with less than 10m USD to commit to projects. Also, while much more funding is

needed to address challenges in preparing infrastructure projects, the funding of the core group

tends to predominantly address the later stage of the project cycle. In addition, there are not many

facilities addressing government-led PPPs as such, and with private sector originated projects

benefitting from only 25% of total support.

PPF Assessment

In the assessment an apparent large number of homogenous facilities has been evaluated, both

individually as collectively, but there was also a shortage of comparable data and information about

individual PPFs. The assessment of PPFs has shown that only limited data and information about

activities were available for an analysis of impact and refocusing of facilities. The work of the ICA, and

thus the assessment, has shed some light on this gap but in order to move on to a level of improved

coordination and alignment of PPFs, more analytical work is needed.

The identified PPFs were assumed to be a significant source of funding, however, available funds

proved to be highly fragmented across a large number of different facilities undertaking similar

activities, thus reducing impact and other benefits. As shown in the analysis, the facilities carry

varying degrees of current and future relevancy, cost-effectiveness, adequacy of financial and human

resources as well as relative difficulty of operating (low, medium and high). Among the core group,

EU-Africa ITF, InfraCo Africa, NEPAD-IPPF, PIDG-TAF, PPIAF and PPIU have been assessed to carry a

12 It has to be noted that in 2010 and 2011 more than 40% of annual flows by PPFs have been generated by the multi-donor fund EU-AITF alone (35,5 m USD in 2010). 13 Project Preparation costs are estimated to make up 5% of total project costs. Looking at a program like PIDA with total investment volumes of 30 bn USD until 2020 alone, funding for project preparation needs to increase. The 51 regional programs of PIDA have now been broken down into more than 400 national projects. 14 The total estimated cost of implementing all the projects identified in PIDA to address projected infrastructure needs by 2040 is US$360 bn. The PIDA Priority Action Plan (PAP), which comprises 51 priority infrastructure back-bone projects and programs in energy, water, transport and ICT requires investment of US$68 bn by 2020.


high current relevancy – with four of those also carrying a high future relevancy while all operating in

difficult environments. It is clear from the assessment, that the main PPFs in the core group will face

challenges in keeping up a certain relevancy in an environment of relative difficulty, and when

human and financial resources are not sufficient. This is in contrast to the well-known needs in the

infrastructure sector in Africa, which has become a priority in the delivery of economic growth and

regional integration, thus again indicating the rationale of PPFs to align activities more closely.

Nonetheless, for a number of reasons the assessment has eventually not focused on the

performance of individual facilities with a view to rationalize, consolidate, merge or close down

poorer performers:

1) Few active and well-resourced PPFs are exclusively focused on infrastructure in

Africa. Among the main PPFs, those with limited resources and / or diffuse focus have faced

challenges in achieving traction. A larger number of the main PPFs are hosted by MDBs and are

therefore strongly influenced by policies and competencies of the host.

2) The main PPFs are not homogenous, focusing on different types of projects and different

types of activities along the project cycle (predominantly in the later stage, where

alignment and capability of hosting organizations are higher).

3) PPFs are probably not the largest source of infrastructure preparation funding, but have

a visibility above their level of contribution. Several PPFs are looking for replenishments,

but are at the same time operating in times of declining support, i.e. a shortfall in

infrastructure project preparation funding available from donors in times of budget

shortages, particularly when MDBs are not capable or willing to fill gaps from internal

resources. The result may be a future shortage of quality projects available for funding by

MDBs, others DFIs or the private sector in the future.

Next to the above findings the key messages from the PPF assessment are the following:

The design of facilities requires deeper insight into activities along the project cycle with a

view to the implications for management resources and the scale of total financial resource

requirements. In the current set-up of PPFs, it appears that scarce grant resources are not

used effectively, yet the element of grant funding for public projects offers a degree of

flexibility which should be used where required versus the inflexible repayable elements of

private sector project preparation.

To increase their relevancy PPFs need to ensure sufficient focus on addressing current and

emerging challenges of project preparation, including larger transformational schemes like

PIDA. PPFs should interface better with transformative aspects of their environment. In the

future PPFs will need to operate while recognizing prioritized objectives of African national

and regional governments. While not in the least being able to be developed solely by

existing PPFs, transformative projects like PIDA can receive their valuable support which

helps facilitate initial project development activities.


To be more efficient and effective, much more coordination among PPFs and their host

institutions is needed around a tunnel of funds approach, involving sharing of information

and knowledge based on a cooperative behavior.

There is a core group of PPFs which is fragmented, both in activities as well as organizational

set-up. Some PPFS are “MDB-integrated”, some are “MDB-hosted”, others are “REC-hosted”

and another group is outsourced, all impacting on capacities to deliver and affecting

adequacies of resources and output (and thus the “Success Factors”).

Under the current circumstances and with (growing) - project cycle - gaps to be urgently

addressed, a time-consuming approach to restructuring existing facilities is not advisable,

also because there would only be limited funding remaining for reallocation. Rather, better

coordination, openness and transparency would be the preferred approach. In return, future

funding or setting up new PPFs should be limited to strong cases for doing so, i.e. in well-

performing facilities or clear gap-filling case. As a result better coordination could be in line

with key performing PPFs becoming the main focus of funding, also based on changes and

improvements in operations.

There is a clear case for setting up a network of PPFs - instead of rationalising existing ones -

to share knowledge, collect data, and improve cooperation both at the project and facility

levels, thereby aligning around priority themes and programmes. A PPF practitioner network

would come in response to the needs and gaps that have been identified and could be

operated by the ICA Secretariat according to the G20 mandate.

8. OPTIONS FOR THE CREATION AND IMPLEMENTATION OF A PROJECT PREPARATION NETWORK

This section elaborates on options for the creation and implementation of a Project Preparation

Network and is based on the findings of the review of previous work done as well as interviews with

selected PPFs15. With the strong mandate received by the G20 and previous work done in the field of

project preparation (Fund Finder, mapping and assessment of facilities), it is assumed that the ICA -

and particularly the ICA Secretariat - takes an active role in the creation, implementation,

management and administration of such a network. The focal point for the would thus be the ICA

Secretariat, also adding value by being an African-based entity with a proven track record hosted by

the AfDB (bearing in mind that MDBs are hosting the majority of project preparation facilities and

have actively cooperated with the G20 Development Working Group as part of their Action Plan).

The ICA is in the position to act both as an operational agent for the network and for the raising of

funding for the PPFs.

In addition, the management of a project preparation network would be in line with the ICA´s overall

mandate (coordination, facilitation, advocacy in African infrastructure) as well as the forthcoming ICA

business plan, which - next to involvement in the coordination of PIDA - targets improved resource

mobilisation, work on project preparation and an expansion to G20 membership and participation.

The work of a project preparation network would also provide adequate linkages with the sector 15 Interviews were conducted with EU Africa ITF, AWF and NEPAD-IPPF.


platforms for water, transport and energy which have been implemented and delivered by the ICA

Secretariat – to be further addressed during and after the implementation of the network.

8.1. OPTIONS AND ACTIVITIES FOR A PROJECT PREPARATION NETWORK

Interviews In interviews, the representatives of PPFs confirmed the following:

- There is contact and exchange between PPFs, but not in a formalised way. Interest in the

creation of a network, which is managed by the ICA, is very high

- There is interest in a cooperation among a group of larger PPFs (“the core group”), which

may be expanded after implementation to include all stakeholders

- Knowledge sharing and synergies are of vital importance to PPFs, and should eventually

include all initiatives and facilities active in project preparation for infrastructure.

- Cooperation at the project level with a “Tunnel of Funds” approach (exchanges of pipeline,

mobilisation of resources for projects in pipeline, allocation of available resources) is a

priority for PPFs. Project exchange should focus on PIDA PAP, but should also be open for

other (regional) projects.

- PPFs would prefer to implement the network with one or more formal meetings, also to

devise an agenda with a time frame for deliverables. At a later stage, i.e. after

implementation, exchanges can also be done virtually.

- PPFs welcome a bench-marking exercise - as an opportunity to learn and market work.

- The Fund Finder is appreciated and will have to be updated further.

Options for creation

For the creation of the network two options have been assessed.

1) Inclusion of all PPFs (and stakeholders)

There are numerous facilities active in the field of project preparation in African infrastructure. In

addition, there is a broad range of stakeholders (public and private financiers and clients of

infrastructure projects, operators, RECs, etc.). However, for the network to be successful and

efficient, it is recommended that a smaller group of PPFs be part at the inception stage. A group of

too many PPFs and stakeholders would be too difficult to run and manage, which is why a focus on

the “core group” of about 10-12 most active PPFs provides a better option. Once established, the

network could grow and include more PPFs and stakeholders. Communication with other

stakeholders would be given at all times when presenting and disseminating the results during the

first year of operations of the network. After the first year of operations o the network, the inclusion

of partners and stakeholders should be reconsidered when the network will be to handle a larger

group of members.

2) Management of the network by another entity or by creation of a new initiative

When looking at the managing of a potential network of PPFs, there are various options. First, a new

initiative of partners could be created, or secondly a new entity designed to manage the network

only. Both would take time and may not be efficient over time, while it is clear that the ICA with its


proven track record in coordinating partners around African infrastructure already exists and could

commence operation fairly quickly. With its outreach, experience and location in an MDB the ICA

Secretariat would be the preferred entity to manage a network of PPFs. It is therefore not

recommended to form a new initiative or to create a new entity to manage a PPF network.

Recommendation: It is recommended, that following the inception of the network by the ICA, a

PPF coming from the “core group” would take the lead in championing the network (supported by

the ICA) after year 1 of operations – thus giving a higher degree of ownership.

Options for implementation

For the PPF network to be operational there are three options available for implementation:

1) Virtual format (Video conferences, Skype sessions), or

2) Physical format (Meetings and workshops – with the ICA/AfDB or in leading MDBs), or

3) a combination of physical and virtual operations

Virtual format: There are elements which can be dealt with in a virtual format, e.g. by videoconferencing or skype sessions (project meetings, coordination of particular activities, etc.) among PPFs. It is, however, not advisable to handle the entire operations of the network on a virtual basis only:

- First of all, there are numerous stakeholders involved – next to the PPFs – requiring inclusion

and traction. This cannot be achieved virtually.

- Secondly, the implementation of the network requires physical meetings of the core group of

PPFs to decide on an agenda, deliverables and measurability - to be disseminated and

communicated with all partners and stakeholders.

- Thirdly, the presence of the ICA Secretariat in the AfDB offers opportunities to link up with

stakeholders (PPFs, AUC), certain PPFs (NEPAD-IPPF, AWF) and special initiatives (PIDA). This

should be taken advantage of, in particular with regard to workshops and project meetings.

- Fourthly, it will be important to organize a conference with all partners and stakeholders

(e.g. at the margins of an ICA Annual Meeting).

- Technical logistics to organize a virtual meeting of more than 10 stakeholders might not be

easy to conduct and therefore not advisable.

Physical Format: As described, a useful option to implement the PPF would be a physical one, whereby the inclusion of all partners will be given, and results at the technical level will be delivered. As part of this format, there should be one workshop per year as well as one stakeholder meeting per year. This would ensure reporting back about progress, the dissemination of products and the best possible level of traction. Combination of virtual / physical format: Looking at the above two options this is the most preferred one. To achieve the highest value added, a physical format of running the network could be enriched with the complementary option of having virtual meetings (videoconferencing, skype sessions) at the technical level. However, on a higher level, the needs to deliver, report, and disseminate the results of the network should be


handled as part of a non-virtual network. As suggested, there is a need to involve all stakeholders and to have a conference in order to define the programme of activities and deliverables as well as the exchange and knowledge sharing approach of the network. This way, the ICA would be enabled to add value by fulfilling its role in coordinating, advocating, facilitating – and ultimately in mobilizing resources. Recommendation: It is recommended that the PPFN be implemented by ICA using a combination of physical and virtual meetings. The first step being for ICA to call for an inaugural meeting with PPFs to discuss the way forward as suggested by this report. PPF network activities There are numerous activities for the network to be engaged in when applying a gap-filling approach

to coordination. The below table summarises activities in the three higher level, partly overlapping,

categories of Data and Information, Project Cooperation, and Coordination:

Table 5: Activities of the Project Preparation Facilities Network

Data and Information Project Cooperation Coordination

Systematic collection of data, information16, reporting about PPFs and their activities

Exchanges of pipelines, joint project origination, project “stock-taking” and analysis, project workshops

Knowledge Sharing, use of “Best Practices”

Active use, systematic update and regular dissemination of the ICA Fund Finder

Tunnel of Funds concept to project allocation (Syndication, “gap-filling”)

Increased Dialogue and advocacy with stakeholders, communication, dissemination

Development of measurable benchmarking among PPFs for performance (e.g. cost, output, impact)

Collaboration and exchange on PIDA projects

Regular PPF conferences (inaugural, biannual), workshops (dissemination of products, stakeholder inclusion)

Delivery of specific knowledge products17 (e.g. based on data collection) and “Best Practices” for PPFs

“Match-making”, cooperation with all stakeholders, project conferences / workshops

Reporting to PPF Funders (Donors, MDBs, G20), for resource mobilisation and improved and adequate allocation of PPF funding

It is assumed that the network will consist of the aforementioned core group of facilities, which will

be expanded to include more stakeholders after implementation.

8.2. BENEFITS

There are several overall benefits coming from the operation of a PPF network as highlighted in Table

5. The recommended option to implement the network will put all partners in the position to reach

the highest benefits.

The PPF network will lead to a higher degree of transparency of facilities and their entire work

spectrum and therefore openness to collaborate. Improved information (knowledge, systematic data

capture and benchmarking) on PPFs - in conjunction with the ICA Fund Finder - will allow for better- 16 This type of data would also feed well into the ICA Annual Report - a unique collection of data and trends in African Infrastructure, mapping commitments and disbursement of all funders. 17 The ICA Secretariat has developed a knowledge centre for active use of infrastructure knowledge (icafrica.org)


informed allocation and mobilisation of resources.. As a result the all stakeholders will be enabled to

understand the focus and performance of PPFs more easily and to make efficient decisions, which

can be marketed and communicated accordingly.

Without losing the “light touch” approach that has marked the ICA, a formalised relationship based

on the active engagement of PPFs (and other stakeholders such as MDBs, donors and beneficiaries)

would achieve a number of benefits at comparatively low cost. An agenda of prioritised objectives

highlighting a road map with milestones, products and deliverables would form the basis for the

implementation of the PPFN network.

Table 6 summarises the benefits a network of Project preparation facilities would bring under the

recommended option, forming the basis for enhanced coordination at all levels. Activities in table 6

are extracted from the higher level categories of “Data and information” and “Project Cooperation”

in Table 5.

Table 6: Benefits of activities of the Project Preparation Network

Activity Benefits

Systematic collection of data, information

and reporting about PPFs and their activities (Fund Finder operations)

Enables informed comparisons between PPFs

Enhances knowledge and visibility and marketing (ICA website)

Provide information and tool for project sponsors and stakeholders.

Knowledge on Project Preparation resources, best practices and benchmarking of Facilities (based on the active use, systematic update and regular dissemination of the ICA Fund Finder)

Greater efficiency in allocation of funding, better benchmarking of performance

Dissemination of best practices between stakeholders and PPFs.

Knowledge Sharing (ICA knowledge centre)

Cooperation on projects, (Tunnel of Funds approach)

Greater efficiency in allocation of existing funding to projects

Project identification among PPFs

Scaling up and mobilisation of resources for PPFs where needed

Enhanced cooperation at the project level, “match-making” with stakeholders

Facilitation and increasing of coordination around large programmes such as PIDA

Project knowledge sharing

8.3. EFFICIENCY

As presented in the ICA Assessment of PPFs, there are a number of tasks involved in the

implementation and operation of a network - requiring the responsibility of partners involved and all

impacting on the efficiency18 of the network and ultimately on the efficiency of PPF operations and

funding. With its track record and the support of the AfDB, the ICA Secretariat is best positioned to

18 Efficiency (OECD/DAC): A measure of how economically resources / inputs (funds, expertise, time, etc.) are converted to results.


set up a network and support the implementation of an agenda and activities, i.e. to manage the

network. It is assumed that there will be full engagement of facilities and the G20.

Activities and respective responsibilities are presented in Table 7 (again based on the higher level

categories presented in Table 5).

Table 7: Overview of responsibilities: Implementation and operation of the PPF Network

Implementation Activity Responsibility

Systematic collection of data, information and reporting about PPFs and their activities (Fund Finder operations)

ICA (Secretariat) in Partnership with PPFs member of the network

Fund Finder: Updates, Input and dissemination ICA Secretariat in partnership with PPFs member of the network

Delivery of knowledge products on Project Preparation resources, best practices and benchmarking of Facilities (performance)

ICA Secretariat in collaboration with PPFs

Cooperation on projects (Tunnel of Funds approach) PPFs (with support of ICA Secretariat and stakeholders)

Structural activities, e.g. refocusing and enhanced cooperation alignment of PPFS, replenishment of PPFs based on PPF network outputs, support for larger transformative programmes

G20, MDBs, (African stakeholders such as RECs)

Two factors will be greatly affecting the efficiency (and eventually capacity and impact) of PPFs:

1) Benchmarking (Performance of PPFs)

The benchmarking of PPFs and their performance will have to be based on larger exercises with

regard to the collection of data, updates of the ICA Fund Finder and the development of comparative

indicators which will need to be developed independently. While this will enhance knowledge and

visibility of PPF operations, it will also provide for ways to increase the efficiency of PPFs when

allowing for MDBs and G20 partners to replenish PPFs according to their respective needs, gaps and

performances - or alternatively to initiate and implement changes in operational policies (sectoral,

regional, functional realignments) - and thereby reforms - of PPFs. As a result, when resources are

allocated in an efficient manner, there will be a positive impact on the performance.

2) Cooperation at the project level

The cooperation at the project level carries wider benefits which will positively impact on the

efficiency of PPFs, and in particular the capacity to deliver projects. Openness for cooperation

around projects and larger programmes such as PIDA (pipeline sharing / project identification, co-

funding / syndication, “match-making” with partners, best practices and project knowledge sharing)

will increase the efficiency of operations – in particular by applying a “Tunnel of Funds” concept for

each project. Resulting from this greater efficiency in the allocation of existing funding to projects

will be given, when this approach leads to the scaling-up and mobilisation of resources for PPFs

where required.


The two above factors are related to the measurability of PPF operations and the efficiency of a PPF

network. It is the project level in particular, where measurability poses challenges. Yet over time and

when performed efficiently, there will be ways to measure the outputs of project cooperation, which

will have to be included in the performance indicators of a PPF network.

8.4. IMPACT

The impact19 of a potential project preparation network on PPFs, both individually and collectively, has been highlighted above in the sections 8.1. and 8.2.: The activities of the network would lead to benefits and levels of efficiency that would produce positive long-term effects. The question will remain how impact can be measured, but clearly over time the deliverables of the network (e.g. collection of data, benchmarking, project cooperation) will provide approaches whereby output of the network can be measured. However, for the infrastructure sector in Africa there are several positive impacts, in line with the network activities that have been suggested:

The systematic collection of data, information and reporting about PPFs leads to greater

knowledge about financing of the sector. Enhanced communication, visibility and marketing

of project preparation (also through the Fund Finder) will impact positively all stakeholders.

The delivery of knowledge products on Project Preparation resources, best practices and

benchmarking of Facilities (performance) will impact positively on the ability to assess,

measure and align (reform, refocus) PPFs where needed, therefore facilitating a more

efficient delivery of infrastructure projects on the continent. Capital will be used and

allocated more efficiently with better informed replenishment.

The cooperation on projects (Tunnel of Funds approach) will lead to a more efficient and

accelerated delivery of infrastructure projects and a more efficient use of capital for projects

(along the project cycle). Efforts can be pooled - also around larger a transformative program

- which enables quicker and more efficient delivery.

The PPF network will feed into the ICA Business Plan and its main pillars 1) Enhanced

coordination at the sector level, 2) Facilitation of Regional Programs, 3) Increased

Knowledge, and 4) G20 Expansion. It will positively impact on the achievement of the ICA`s

goals in coordinating and facilitating financing for African infrastructure. The results of the

PPF Network will be included in the ICA Annual Report as well as the ICA Reporting to ICA

Members and the G20.

8.5. VALUE ADDED

There are numerous challenges around the infrastructure sector in Africa as a whole, but also around the number and fragmentation of PPFs. The infrastructure sector faces enormous long-term challenges when it comes to funding ambitious plans that meet the growth on the continent.

19 Impact (OECD/DAC): The positive and negative, primary and secondary long-term effects produced by a development intervention, directly or indirectly, intended or unintended.


There is a recognized need to cooperate better among partners in order to provide for a more

efficient allocation of existing resources and the mobilization of additional ones. It is clear that the

added value of the network will be greatly enhanced when work at all suggested levels with all

stakeholders achieve this outcome - next to the sharing of knowledge, the collection of data and an

increased visibility for all partners involved – both with public and private clients as well as with

donors (MDB, G20). Positive results of the network will enable decision-makers and partners to react

more efficiently to the challenges in the sector. The optimal option to implement the network will

enable all partners to devise an agenda (roadmap) for the network, which includes deliverables at

various levels.

9. OPTIMAL OPTION FOR A PROJECT PREPARATION NETWORK

As discussed earlier the optimal option to create a network is one whereby the ICA Secretariat

manages the implementation and coordinates activities. For the implementation, as was confirmed

by PPFs in interviews, to achieve the highest benefits a physical format of running the network would

be preferred which is enriched with the complementary option of having virtual meetings

(videoconferencing, skype sessions) at the technical level.

The optimal option to run a PPF network would be one where partners convene in order to

coordinate their activities and the network outputs. With regard to the governance of the optimal

option it is suggested that during an inaugural meeting of the network the agenda, roles and

responsibilities of partners – i.e. the network modalities – will be further discussed. In section 9.1.,

suggestions for the main focus in the first year of network operations are outlined.

9.1. IMPLEMENTATION AND ACTIVITIES

The potential activities of the network have been outlined in detail. It is recommended to implement

the network in line with the forthcoming ICA Business Plan for 2014-2016. This would ensure

alignment in the follow-up of the network´s contribution to the ICA Business Plan and adequate

reporting. If decided positively at the ICA Annual Meeting, the implementation of the network will

have to follow soon thereafter in order to deliver first results during 2014.

It is assumed that for the implementation of the network, funding and resources will be made

available in the ICA Secretariat.

Next to virtual exchanges, it is recommended for the network to meet twice a year: 1) PPF workshop

to allow for coordination and cooperation and the technical level (project, knowledge), and 2)

Meetings with all stakeholders, ideally combined with ICA Annual Meetings.

Below is a suggestion for the sequencing of activities in the first year of operations:

1) Drafting of agenda (roadmap), budget, and resource planning by ICA Secretariat– with PPF

partners to be submitted to the first inaugural meeting of PPFs

2) Start of updates of the Fund Finder and data collection – with PPF partners


3) Subject to approval by the inaugural meeting ICA will commission a study on PPF

benchmarking (focus and performance)

4) Physical Meeting / Workshop of PPFs (with an activities related agenda: Programme of

activities which will include annual report on PPFs and other deliverables)

5) Implementation of the decisions of the first inaugural PPFs meeting

6) Reporting back to G20 about progress

7) Stakeholder Meeting (at ICA Annual Meeting) - reporting and reviewing of first deliverables,

scheduling of activities for the second year

Partners of the PPF network will decide in consultation with the ICA how to structure an agenda for

the first year and, after implementation, for the following years. During the first year of operation,

the network will further decide on a broader agenda and deliverables. Since it is assumed that the

network meets twice a year (once for technical meetings, and once for meetings with stakeholders),

first results and reporting will be available during and after the first year of operations.

9.2. RESOURCES AND BUDGET

The network would be managed and operated by the ICA Secretariat, with funding and resources

from the budget of the ICA Secretariat. The ICA Secretariat is housed in the AfDB, like multi-donor

PPFs such as NEPAD-IPPF and AWF, and can draw on support from and access to operational

facilities.

The estimated costs for three years of operation (details in Annex 3) are comparatively low since the

established operations of the ICA Secretariat can provide for specific resources. The costs may vary

since the full level of outputs (e.g. knowledge products) and the format of meetings (workshops and

with stakeholders) is not yet known. It is rather likely, that the costs detailed in the draft budget will

be lower so that on average up to USD 150.000 will be required per year to operate the network and

to deliver its outputs.

It would be important for the ICA Secretariat to have the human resources available for the

implementation of the Network. This will have to be discussed (including the funding options) when

ICA Members take their decisions – ideally the ICA Secretariat would have the capacity to start

implementations immediately after a positive decision, but either way it is recommended that there

will be consulting support in the first year of the Network operations to ensure efficient

implementation, particularly during the starting phases of the Network.

One suggestion for discussion is that in the first year the current ICA staff drives the activities and

starting the second year one PPF shall take the leadership on organizing the PPFs meeting, while ICA

would take the lead in organizing the PPFs meeting with stakeholders at the ICA Annual Meeting.


10. CONCLUSION & RECOMMENDATIONS

a) Conclusion

The report has elaborated on the work already undertaken by the ICA. Following the mapping of and

assessment of project preparation facilities, there is an identified need to take actions with regards

to informational, behavioural and structural approaches to project preparation.

On informational issues, a lot more work is needed to capture the cost, performance and other data

pertaining to the preparation of projects. In fact, going beyond the pure collection of data, a

benchmarking exercise is recommended to finally assess the performances of PPFs.

At the behavioural level, much more coordination can be applied when there is an openness to

cooperate at the project level with a view to exchange project knowledge and pipelines, and joint

funding of projects (also in transformative programs). Inevitably, this would lead to a more efficient

allocation of existing resources.

Structurally, based on a benchmarking and efficient use of existing funds, much more knowledge will

be available for the G20 which could lead to a refocusing of specific PPFs and /or the mobilisation of

more resources (from donors and MDBs) for project preparation in line with needs and

performances.

To coordinate and deliver at the above levels, it is suggested to create and implement a Project

Preparation Network that is operated and managed by the ICA Secretariat at comparatively low

costs. With its proven capability to coordinate partners and funding, the ICA would be in a good

position to both deliver the recommendations as well as to include all stakeholders in the effort to

enhance the preparation of infrastructure projects in Africa. The network would have to include a

core group at first, with an expansion to other stakeholders after implementation.

It is proposed that the core group consists of 10 to 12 PPFs in the initial phase and that to kick-off the

implementing the PPFN a physical meeting/workshop be organised by ICA Secretariat.

b) Recommendations

In the light of above, it is recommended that:

1) ICA Members approve the establishment of the PPFN by ICA based on the recommendation

for establishment of the PPFN as outlined above;

2) ICA Secretariat to draft the TOR for the PPF Network;

3) ICA organizes the first inaugural meeting with core initiatives in the first quarter of 2014;

4) ICA Secretariat to cover the budget implications for the first year;

5) ICA Secretariat to prepare a report on the activities for the Annual Meeting, and to report to

the G20 about activities and progress of the network.


11. ANNEXES Annex 1: List of Multilateral Organizations (Project Preparation activities)

NAME COMMENTS

African Development Bank Group

New Partnership for Africa's Development

Infrastructure Project Preparation Facility

Assists African countries, RECs and related institutions

prepare high quality and viable infrastructure projects and

programs with a regional/continental outlook, to ensure

sustainable regional economic integration through

cooperation among African countries, donors and the

private sector.

African Water Facility Initiative led by the African Ministers' Council on Water

(AMCOW) to mobilize resources to finance water resources

development activities in Africa.

Nigerian Technical Cooperation Fund Key areas of focus: science & technology, health, business &

finance, agriculture, education, public administration and

regional integration.

ADF - Project Preparation Facility Resources for promoting project quality at entry. The PPF is

used for financing feasibility studies and detailed design,

environmental impact assessments (EIAs), gender, and

cross cutting issues/studies at the Appraisal phase of

priority projects and programs.

World Bank

IFC Advisory Services in Public-Private-

Partnerships

IFC AS assists national and municipal governments to

implement private-sector participation projects in

infrastructure, health and education.

Multilateral Investment Guarantee Agency MIGA’s underwriters have significant experience in

structuring PRI transactions and are able to anticipate

issues during a project’s preparation. MIGA can bring

expertise at the beginning of transactions, thus bringing to

the project not only insurance, but also risk mitigation.

African Catalytic Growth Fund To provide rapid, targeted support to countries with

credible programs to accelerate growth, poverty reduction,

and attainment of the MDGs.

Global Partnership on Output-Based Aid A partnership of donors and international organizations,

providing funding for Technical Assistance at the project

preparation stage and subsequently grant funding.

Japan Policy and Human Resources

Development Fund TA Grant Program

Provides grants under the PHRD TA program Project

Preparation (PP) grants.

Public Private Infrastructure Advisory

Facility

Provides three types of TA for governments of low- and

middle-income countries: (i) develop enabling

environments, (ii) project cycle-related assistance and (iii)

capacity and awareness building

Water and Sanitation Program Multi-donor partnership administered by the World Bank

to support poor people in obtaining affordable, safe and


sustainable access to water and sanitation.

Trust Fund for Environmentally and Socially

sustainable Development

Provides grant resources for World Bank activities aimed at

mainstreaming the environmental, social and poverty

reducing dimensions of sustainable development.

DBSA Development Fund Capacity building funding through grants

mobilization and deployment of technical and financial

experts for infrastructure project implementation technical

support and sharing of knowledge.

DBSA-EIB Project Development and

Support Facility (PDSF)

for further info see EIB here below in the table.

SADC Project Preparation and

Development Facility (PPDF)

The region’s Finance and Economic Planning Ministers also

agreed last week to proceed with a workshop in March to

strategise the development of a new SADC fund to support

the direct financing of infrastructure projects.

European Commission

African, Caribbean and Pacific - EC Energy

Facility I

Status: closed/disbursed

African, Caribbean and Pacific - EC Energy

Facility II

Status: closed/fully committed

European Investment Bank

ACP Water Project Preparation Facility Expanding access to water and sanitation services in ACP

countries requires increased funding from national and

international sources. This calls for enhanced sector

development and better upstream project preparation to

develop financially and technically viable projects. To fund

technical assistance for project preparation activities

DBSA-EIB Project Development and

Support Facility (PDSF)

The EUR 6m programme, including EUR 3m from EIB and

EUR 3m from DBSA, will primarily target countries across

southern and eastern Africa with specific focus on

improving infrastructure project preparation in transport,

energy, water and sanitation, urban and ICT sectors.

EU-Africa Infrastructure Trust Fund Attract and leverage resources and technical

expertise to support cross-border infrastructure

investments in SSA

Islamic Development Bank NO specific PPF identified. IsDB can extend financial and

technical assistance for project preparation in a number of

ways, in particular financing for preparation of feasibility

study, detailed design or preparation of tender documents.

Arab Bank for Economic Development in

Africa (BADEA)

NO specific PPF identified. Project preparation is supported

within existing funding mechanisms.

African Regional Development Banks

East African Development Bank A grace period of 2 yrs. for project preparation is granted.

West African Development Bank The Bank finances feasibility studies.

Annex 2: List of identified project preparation facilities for Africa 2012


# FACILITY ABBREVIATION MANAGED BY YEAR EST.

1 2XPLORE 2XPLORE BILATERAL/ Netherland

1999

2 African Capacity Building Foundation ACBF WB 1991

3 African Catalytic Growth Fund ACGF WB 2008

4 African, Caribbean, and Pacific grouping-European Commission Energy Facility I

ACP-EC Energy Facility I

EC 2005

5 African, Caribbean, and Pacific grouping-European Commission Facility II

ACP-EC Energy Facility II

EC 2009

6 African, Caribbean, and Pacific grouping-European Commission Water Facility I

ACP-EC Water Facility I

EC 2004

7 African, Caribbean, and Pacific grouping-European Commission Water Facility II

ACP-EC Water Facility II

EC 2010

8 African Development Fund - Project Preparation Facility

ADF PPF AfDB 2000

9 Access to Energy Fund AEF BILATERAL/ Netherland

2007

10 African Development Bank Group African Water Facility

AfDB AWF AfDB 2004

11 Arab Financing Facility for Infrastructure AFFI WB 2011

12 Africa Infrastructure Program AIP BILATERAL/ USA 2008

13 Cooperation in International Waters in Africa CIWA WB 2012

14 Development Bank of Southern Africa Development Fund

DBSA DF DBSA 2001

15 Development Bank of Southern Africa-European Investment Bank Project Development and Support Facility

DBSA-EIB PDSF DBSA 2010

16 Infrastructure Development Collaboration Partnership Fund

DevCO IFC 2003

17 European Investment Bank Water Project Preparation Facility

EIB WPPF EIB 2008

18 Energy Sector Management Assistance Program ESMAP WB 1983

19 European Union -Africa Infrastructure Trust Fund EU-Africa ITF EIB 2007

20 Fund for African Private Sector Assistance FAPA AfDB 2006

21 French Development Agency Fund for Assistance to the Private Sector

FASEP BILATERAL/ France

2006

22 Facility for Euro-Mediterranean Investment and Partnership Support Fund

FEMIP SF EIB 2003

23 Facility for Euro-Mediterranean Investment and Partnership Trust Fund

FEMIP TF EIB 2002

24 Global Environment Facility GEF WB 1991

25 Global Partnership on Output-Based Aid GPOBA WB 2003

26 International Finance Corporation Advisory Services in Public-Private-Partnerships

IFC AS PPP IFC 1990

27 International Finance Corporation Municipal Fund IFC MF IFC 2003

28 InfraCo Africa InfraCo Africa PRIVATE 2004

29 Islamic Development Bank Technical Assistance Fund

IsDB TAF IsDB 2001

30 Kreditanstalt für Wiederaufbau Carbon Fund KfW CF BILATERAL/ Germany

2008

31 Low Income Countries Under Stress Implementation Trust Fund

LICUS TF WB 2004

32 Nile Basin Initiative Trust Fund NBI WB 1999


33 New Partnership for Africa's Development Infrastructure Project Preparation Facility

NEPAD IPPF AfDB 2004

34 New Partnership for Africa's Development Infrastructure Investment Facility

NEPAD NIIF PRIVATE 2008

35 New Partnership for Africa's Development Infrastructure Project Preparation Feasibility Studies

NEPAD PPFS DBSA 2003

36 Nigerian Technical Cooperation Fund NTCF AfDB 2004

37 Post-Conflict Fund PCF WB 1997

38 Japan Policy and Human Resources Development Fund Technical Assistance Grant Program

PHRD TA GP WB 1990

39 Infrastructure Projects Preparation and Development Unit

PPDU ECOWAS 2005

40 Project Preparation Facility PPF WB 1995

41 Public Private Infrastructure Advisory Facility PPIAF WB 1999

42 Southern African Development Community Project Preparation and Development Facility

SADC PPDF DBSA 2012

43 Special Assistance for Project Formation SAPROF JBIC BILATERAL/ Japan

1988

44 Sub-Saharan Africa Transportation Program SSATP WB 1987

45 Technical Assistance Facility TAF PRIVATE 2004

46 Trust Fund for Environmentally and Socially Sustainable Development

TFESSD WB 1999

47 Trade Facilitation Facility TFF WB 2009

48 Common Market for Eastern and Southern Africa-East African Community-Southern African Development Community Tripartite Trust Account

TTA DBSA 2010

49 United Nations Habitat Slum Upgrading Facility UN HABITAT SUF UN 2004

50 United Nations HABITAT Water Sanitation Trust UN HABITAT WSTF UN 2002

51 United Nations Environment Program Sustainable Energy Finance Initiative Transaction Support

UNEP SEFI TSF UN 2003

52 Water and Sanitation Program WSP WB 1978


Annex 3: Draft budget of the PPF Network (estimated costs, 3 years)

ActivityCost (USD),

Year 1

Cost (USD),

Year 2

Cost (USD),

Year 3Comment

1

Consultancy 60.000,00 20.000,00 20.000,00 Mainly for the Implementation of the Network in Year 1:

Agenda, Contacts, Fund Finder updates with Partners,

Facilitation of contacts, Preparation / coordination of

meetings, Reporting

2Benchmarking Study of PPFs, Best Practices for PPFs 60.000,00 40.000,00 20.000,00 Two deliverables (Studies: benchmarking and best

practices) in Years 1 and 2 - and follow-up

3

Knowledge Products (and Fund Finder updates) 20.000,00 40.000,00 40.000,00 Other than work on benchmarking and best practicies: 1)

Data Collection, 2) and other products - upon demand and

consultation, 3) Follow-up

4Workshop (and Virtual exchanges) 10.000,00 (First Meeting of the network): Agenda and deliverables,

Project Cooperation, Project Meeting (e.g. for PIDA)

5Conferences (for the network and with all PPF stakeholders) 30.000,00 30.000,00 30.000,00 As part of ICA Annual Meetings / back to back with ICA

Annual Meetings

Total 180.000,00 130.000,00 110.000,00

Grand Total for 3 years 420.000,00

ICA PROPOSAL FOR THE CREATION OF A

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