Public Policies and Fields of Action – Infrastructure 8 October 2015 Patrick Dlamini, CEO
Jan 17, 2016
Public Policies and Fields of Action – Infrastructure 8 October 2015Patrick Dlamini, CEO
Association of African Development Finance Institutions (AADFI) provides support to member institutions to build the capacity of
Africa’s DFI cohort
Objectives
To promote economic and social development
through cooperation
Establish a machinery for systematic interchange
Stimulate cooperation for the financing of
economic and social development
Knowledge sharing and best practice
To accelerate regional integration
Benefits
Lines of credit from development partners
Participation in meetings, symposia,
workshops and related activities
Technical assistance and capacity building
Staff exchange and secondment with
member-institutions
Dialogue with multilateral institutions
on development policies and project finance in
Africa
Established 1969, currently 81 members
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Africa’s infrastructure delivery programme needs strong institutions, new modes of finance and partnerships
SUB-SAHARAN AFRICA’S INFRASTRUCTURE LAGS
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INSTITUTIONAL WEAKNESSES
Infrastructure gaps have an impact on growth and trade within regions and across the continent.
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Institutional weaknesses limit the ability to attract FDI and manage existing projects and investments
Source: World Economic Forum: Africa Competitiveness Report 2015
AADFI through its partnerships has prepared member DFIs to play a significant role in Africa’s sustainable development programmes by aligning them to continental and global best practice
• Adoption of International Financial Reporting Standards (IFRS) and Accounting Standards established by the Organisation for the Harmonization of Business Law in Africa (SYSCOHADA)
• Prudential Standards and Guidelines and Rating System (PSGRS) – annual process, next self-assessment process November 2015
• Development of Public Credit Guarantee Schemes for SMEs (where development really happens) • Collaboration with ADFIAP in Malaysia on seeking alternative models for financing and promoting south-
south collaboration for development
NEW OPPORTUNITIES FOR DFIs
• Crowd-in the private sector through structured and supported PPPs • Develop new products to finance infrastructure programmes that include
equity, project finance, project preparation and look at replicating models not widely used (Islamic Banking)
• Co-financing with new institutions (New Development Bank, Asian Infrastructure Investment Bank, etc.).
• Provide risk-protected post-conflict and fragile country support • Introduce innovative risk strategies to finance public goods (water,
sanitation, social infrastructure) • Innovative infrastructure initiatives – green infrastructure, shared-use
infrastructure, etc. • Lead partnerships for sustainable development• Develop equitable global, continental and regional frameworks to meet the
Sustainable Development Goals • New models of partnership to maximise limited resources for maximum
development impact
New role for Development Finance Institutions in financing sustainable infrastructure
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DBSA model
Private-sector partners
Responsiblebusiness conduct
Efficient use of financial instruments
Prevention and prosecution of illegal or unethical behaviour
Tradeable instruments and ownership structure
Professional and sustainable operations
Inclusive community engagement
Ongoing community involvement during operation
Participatory planning and low-burden construction
Risk guarantees andpolitical-risk insurances
Effective interactionwith public sector
Monitoring of political develop-ments, and advocacy strategy
Constructive communication with public agencies
Influence implementation frameworks Infrastructure Delivery Division (with govt) defines and delivers social infrastructure
projects
Frontline divisions work with PIDA, NEPAD and other partners to facilitate infrastructure
programme implementation
Project planning and preparation Integrated infrastructure planning Project preparation to move projects to
bankable stage
Targeted development finance Green Fund, Jobs Fund, Global Environmental Facility
Municipal finance, project finance, syndicated finance (new products)
Monitoring and Evaluation (results focus) Increase development impact – make investments matter
Measure for results and make adjustments to drive sustainable development
International partnerships Drive continental and global infrastructure and SDG development
South-South Cooperation (AADFI), Triangular Cooperation (IDFC), B20, ALIDE, etc.
Public-Private collaboration
Culture of open dialogue
Management of risk perception and return expectation
Multi-stakeholder dialogue beyond specific projects
The DBSA operational model has taken into account partners, risk mitigation and sustainable development in infrastructure financing
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in conclusion …
• To reiterate, we need strong institutions and strong partnerships• Good frameworks to support Public-Private and Public-Public Partnerships• Ethical financing for sustainable development and broad-based economic growth
BUT we also need
• Brave leaders who make the difficult decisions on how to develop new institutions • Approaches that develop the potential capacity of each institution, country and region to
become the best they can within a new global reality
We cannot follow old development finance practice in a world that is different. We need to be cognisant of those changes, the needs of our countries and the needs we endeavour to meet through financing for development.