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PROJECT FINANCE: Project Finance Conference Offers Inside Track to Suppliers


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There are growing opportunities for contractors, consultants and suppliers to access funding for projects in Africa, and an estimated $50-billion is needed annually to fund infrastructure projects on the continent. Procurement for World Bank-financed projects is enormous, with the Bank awarding up to 30 000 contracts each year worth about $20-billion.

The 3rd annual Infrastructure Project Finance Conference 2010 will focus on ‘Financing Projects in Africa – Insights into New Modalities for Contractors, Consultants and Suppliers’ and takes place on 17 and 18 August 2010 at the Michelangelo Hotel in Sandton, Johannesburg. The event is being endorsed by the NEPAD Business Foundation.

“The manner of financing projects in Sub-Saharan Africa has changed considerably in recent years,” says Paul Runge, Conference Spokesperson and Managing Director of Africa Project Access, a consultancy specialising in providing early alerts of projects in sub-Saharan Africa. “So it’s important for prospective service providers interested in implementing these projects to understand these changes and develop appropriate solutions for the various financial instruments required.”

The African Development Bank (AfDB) approved 186 loans and grants valued at $11.7-billion in 2009. These included infrastructure development worth over $6-billion; multi-sector development worth $3.4-billion; and, the finance sector at $1.2-billion. In April, a Committee of Governors representing shareholders of The AfDB recommended a 200% increase in its general capital from the current $33-billion to $100-billion allowing it to continue providing urgent financial support to African countries.

The Project Finance 2010 conference will provide conference delegates with insights into the changing world of project finance in Africa and practically assist them in moving project initiatives forward.

Recent years have seen significant increases in the number and nature of the role-players involved in project development; Public Private Partnerships in infrastructure, the increase in specialised infrastructure funds, renewed involvement of China and increasing Arab participation in African infrastructure projects are just some examples of important developments for our continent.

“There is a need for Project operators and implementers to know the growing number of sources of project finance and better understand their methodologies,” adds Runge. “There are the traditional donors such as the World Bank, but there has been an emergence of equity funds, sovereign wealth funds, Arab funding agencies and a growing role from export credit agencies. The conference brings all these players together in one place and one time.”

Runge highlights the major challenge in Africa of small Projects. “The agencies don't want to fund projects under US$5 million and yet Africa is very much a small project environment,” he says. “Another challenge is the need for greater local beneficiation and participation in projects on our soil. We need capacity-building of our African institutions and utilities that implement the projects.

“There is also a great divide between financial agencies and the operators or project sponsors. They speak two different languages. A technical expert may emphasise technical aspects instead of following the criteria set by the funders. An inherent problem is that many project proposers don't know how to formulate a practical business plan that meets the criteria of the funding agencies.”

The conference will include a session focusing on packaging project proposals for submission to funding institutions. Runge highlights some of the topics that will be addressed: “Guidelines include a good executive summary that gives the funder the whole project in a nut shell – where, what, how.

“Cash flow projections must be realistic – they are often too optimistic. For government and donor tenders, candidates must stick strictly to the terms of reference. For example, if the tender calls for five CVs, don't give four.

“Attention to the social merits of the proposed project is also important. The bottom line for donors and Foreign Direct Investors is poverty reduction and the project proposal must show this. The capabilities and experience of the project proposer is important. If they are proposing a hotel, how much experience of hotels does the candidate have?”

The ultimate result would be a great deal and project flow arising out of the networking at the conference. Delegates will have a better idea of who to approach and work with and not waste time when the criteria are not met.

Topics to be addressed during the two-day conference include:

  • Overview of Commercial and PPP Project Financing Trends in Africa
  • Growing role of the Development Bank of Southern Africa as Lead Financier
  • South Africa Infrastructure Funding
  • Guidelines for Packaging Project Proposals for Submission to funding institutions
  • Guidelines on Innovative Financing Methods for PPPs
  • Arab funding in Africa (new in this year’s programme)
  • Involvement in BRIC (Brazil, Russia, Indian, China) countries in Sub-Saharan African projects
  • Update on the North-South Corridor and its cross-sector implications

Sectors covered include transport infrastructure, agriculture, telecommunications, ICT, mining/oil and gas, power/water and sanitation, hotels and commercial property.

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