GuarantCo organised capability building workshop on project and corporate infrastructure finance in Douala
GuarantCo, part of the Private Infrastructure Development Group (PIDG), organised a capacity building workshop on project and corporate infrastructure finance in Douala, Cameroon from 24th to 26th June.
The workshop aimed to pave the way to establish continuous engagement between GuarantCo and local corporate banks, insurance companies, pension funds and investment banking boutiques.
The main objectives of the workshop were to raise awareness of the variety of approaches that may be adopted in project financing transactions in different industrial sectors; the use of the credit enhancement instrument to mitigate project risk and local currency infrastructure financing credit solutions.
According to the African Development Bank, Africa has an annual infrastructure funding gap of between USD 87 billion to USD 112 billion. This constrains economic growth on a continent that is one of the world’s poorest, despite having vast mineral resources. Sub-standard roads, ports and airports add to the cost of exporting commodities and hamper intra-regional trade.
In addition, Africa is particularly restricted by narrow financial markets and weak underlying currencies. An insufficient number of African commercial banks have the financial resources and institutional experience to finance major infrastructure deals.
GuarantCo believes that capability building among African banks can play a critical role in unlocking the potential for sustainable long-term infrastructure financing by strengthening analytical skills in understanding project and corporate finance and pricing the risk rating of credit enhancement tools. This will deepen the participation of local banks as natural investors in infrastructure assets.
The training session was delivered through a blend of formal training supported by break-out sessions and group presentations. The case studies demonstrated key features of project and corporate infrastructure financing projects, how these features change over a project’s life-cycle (greenfield vs. brownfield) and the challenges to evaluate infrastructure investments. The focus was on examples taken from the power and energy sector, in line with Cameroon sector priorities.
The workshop was attended by around fifty participants including credit risk officers, portfolio managers and relationship managers of local corporate banks and senior representatives from local insurance companies, pension funds and Investment banking boutiques.
“It is with pleasure that GuarantCo was able to organise this workshop in Douala to familiarise local financial sector stakeholders with the local currently financing of infrastructure projects”, said Jules Samain, Regional Director North and West Africa. “This approach is in line with the mandate given to GuarantCo by its donors which is to develop the capital market. The number of participants has demonstrated the value of this workshop and we are confident that this three-day session will encourage local banks to provide local currency financing for future infrastructure projects”.
GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through PIDG, and the Netherlands, through FMO. Since 2005, GuarantCo has guaranteed bonds and loans for 50 projects in 17 countries, enabled over USD 6,445 million of private investments which provided improved access to infrastructure for 43.2 million people and created 235,300 jobs. GuarantCo is rated AA- by Fitch and A1 by Moody’s. www.guarantco.com
The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 183 infrastructure projects to financial close and provided 243 million people with access to new or improved infrastructure. PIDG is funded by six governments (the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. www.pidg.org