According to him, the bank had committed over $44bn to
infrastructure across the continent in the last six years in areas of
transport, energy, water, and sanitation. He disclosed this when the United
States Treasury Secretary, Janet Yellen, hosted G-7 Ministers, and heads of
multilateral development banks.
The event was to discuss the scaling up of infrastructure
financing and was moderated by the US Assistant Secretary for International
Trade and Development, Alexia Latortue.
In a statement obtained from the bank’s website, Adesina
said, “the AFDB, the premier financier of infrastructure in Africa, has
committed more than $44bn to infrastructure across the continent in the last
six years alone, in such critical areas as transport, energy, and water and
sanitation.
“Despite collective efforts, Africa still faces an
infrastructure financing gap of $68 to $108bn annually.”
At the event, Adesina proposed eight solutions to Africa’s infrastructure finance gap.
According to him, project preparation facilities were critical to developing
bankable infrastructure projects since one of the major challenges of
infrastructure projects was moving commercially viable projects to financial
close.
He added that institutional investors including pension
funds, sovereign wealth funds, and insurance companies had enough resources to
scale up infrastructure financing from billions to trillions of dollars. He
said, “This pool of capital is so vast that what is needed is only 0.03 per
cent or up to 0.04 per cent to bridge the infrastructure financing gap for
Africa.
“Multilateral development banks should take early-stage
investment risks in the project development phase.”
Adesina said since the government provided the largest share
of infrastructure financing, it must improve the efficiency of public financing
for infrastructure.
According to him, governments must focus more on attracting
the private sector to infrastructure financing by improving the policy, legal
and regulatory environment to support public-private partnership investments in
infrastructure.
He added that there was a need for use of local currency for
infrastructure financing. Adesina explained that because foreign loans financed
the bulk of infrastructure and the revenue streams were in local currency, this
presented a high financial risk to investors.
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