Technical cooperation with the African Union Commission. Infrastructure Development in Africa

The Programme for Infrastructure Development in Africa (PIDA) is the African Union’s (AU) continental infrastructure framework for addressing infrastructure bottlenecks through cross-border infrastructure development in transport, energy, information and communication technology (ICT), and water. In 2012, a Priority Action Plan (PIDA PAP 1) was defined that prioritised 400 individual projects to be implemented by 2020.

AUDA-NEPAD, the African Union’s technical implementing agency, is mandated to develop and apply specific instruments to steer and coordinate the implementation of PIDA-PAP projects, in liaison with the Regional Economic Communities (RECs), their member states (MS) and specialist regional institutions.

However, the governments of the MS recognised the absence of robust early-stage project preparation as one of the key bottlenecks for implementation of the PIDA. The lack of technical and financial capacity has led to the abandonment of some worthwhile project concepts while triggering the promotion of immature proposals. Some of the key aspects that are often not considered include: implementation capacity, the regulatory framework, investment conditions, asset ownership, government guarantees, cross-border harmonisation and other viability issues.

In order to strengthen NEPAD’s capabilities, since 2015, GIZ (a German development service provider) has supported the agency in the conceptualisation and operationalisation of the Service Delivery Mechanism (SDM) for early-stage project preparation. The SDM works as a pool of resources to help regional project owners to move projects from the concept stage to the point where feasibility studies can start, through advisory services. However, the operational set-up of this project preparation facility was not successfully achieved.

Objectives, goals and purposes

ALG was appointed by GIZ to provide AUDA-NEPAD with the management competencies and staff capacity to set up the SDM, by conceptualising and operating an expert pool facility and attracting third-party funds.

The goal was to reinforce the capabilities of AUC and AUDA-NEPAD for early-stage project preparation. The specific project objectives for this technical assistance were:

Reinforce the pre-feasibility stage of PIDA project development, to unlock a critical bottleneck in the development of PIDA projects and contribute to advancing several realistic infrastructure projects.

Cooperate with AUC and NEPAD to improve their capacity for autonomous and efficient project preparation.

Four project outputs were set to achieve these objectives:

1. Advisory services for project preparation provided by the expert service pool under the framework of the PIDA SDM.
2. Development and recognition of the PIDA Quality Label.
3. Quick check methodology developed jointly with NEPAD/AUC and 30 projects proposed under the PIDA Priority Action Plan 2020-2030 (PIDA-PAP 2) vetted using the quick check methodology.
4. Development of the business model for the expert service pool.

Study methodology and activities

Various activities were identified to achieve the first objective:

• Provide a pool of technical and financial experts for improved early-stage preparation of realistic and feasible infrastructure projects with regional and cross-border impact.
• Establish a Quality Label recognised by leading investors to assess and certify excellence in project preparation, and apply this standard to future early-stage project preparation.
• Establish a quick check methodology and apply it to at least thirty PIDA-PAP2 projects.
• Identify a large number of suitable projects and develop project concepts to maturity and bankability.
• Solve critical bottlenecks in project preparation for at least six PIDA projects.

A number of specific activities were identified for the second objective:

• Contribute to improved knowledge and resource management among stakeholders, fostering their ownership and accountability.
• Plan for the transition to NEPAD’s operation of the expert service pool in an autonomous and financially sustainable way once ALG’s technical assistance comes to an end.

Success and outcomes

The most significant results from the technical assistance are:

• Set up and management of two expert service pools with 21 experts (mostly in-house experts), in accordance with the project’s objectives and budget, and the timeline agreed with the client. A business model was also developed for the expert service pool.
• Advisory services for project preparation under the framework of the PIDA SDM from the project definition stage to the transaction and financial close stage (including development of ToRs, securing of commitment letters, support for access to Project Preparation Facilities (PPFs), etc.).
• Development and industry recognition of a PIDA Quality Label to screen projects, assess them at the pre-feasibility stage, and secure financing for feasibility stages.
• Development of a project screening and appraisal tool (quick check methodology) jointly with the NEPAD/AUC.
• Appraisal of 31 projects from the PIDA PAP II list (2020-2030) in the energy, transport, ICT and water sectors, from all African regions. 
• Raising of private finance for one infrastructure project with regional impact under the “PIDA-Compacts with Africa” component implemented by GIZ PIDA jointly with AUDA-NEPAD.
• Engagement with the private sector on two infrastructure projects through the Continental Business Network (CBN), to advance projects to the PIDA S3b stage, including development of business plan strategies, market sounding initiatives and investment prospectus reports.
• Capacity building and reinforcement for stakeholders (AUC, AUDA-NEPAD and SDM) and specific project sponsors through virtual and on-site training and workshops.