Author: Andrew Patterson

What is a Bankable Project in Africa?

Infrastructure projects in Africa can be big and complex. It is important to structure the right deal early, use the right model, and pick the right funding sources. Bechtel's Andrew Patterson discusses the different successful infrastructure investment and management options for the region that encourage private and multilateral financial investments.

You can also read the full video transcript below:

What actually is bankability in African infrastructure?

"Because infrastructure projects are very big and complex, I think governments need to be working with the private sector from very early on, on how do you structure that deal? What is the right model to be using? Where is the funding sources coming from? If you're looking for just private equity to come in and build all the infrastructure, it's not going to be a solution that's actually probably going to give them the results they want."

"I think there are certain areas where governments should be looking at where should they be focusing on, and what projects can they bring funding or tap into funding sources to fast track those projects? And which aspects of infrastructure projects should the private sector be in? Some examples of that could be in a port project and they need to expand it. Because there's an existing operation, it's a great place for the private sector to come in. They can help run the efficiencies of that, and use that capital inflow to actually help invest in the future projects."

"But when you're looking at Greenfield, big infrastructure projects you really need to look at, what is that right structure? Other areas is looking at the whole value chain. I think African countries have looked at feasibility reports on a particular airport probably 10 different ways, and there's a consultant out there that continuously looks at, what's that next study? And how do you make that project bankable?"

"But how do you get those projects from the study phase to the actual reality and actually being implemented? You should be looking at how you bring a program management in versus just the individual consultants. We've had a great experience at Gabon doing this, working with the government on building their national infrastructure program. And then actually staying with them, and working with them on the implementation of that program."

"How do you structure the contracts? What's the right tendering structure, making sure that the costs, and the schedules, and qualities, and safety is everything they need in the infrastructure project? Was it adhered to? And they got what they expected, versus packaging it out to individual consultants."

"So when we looked at rethinking it, we looked at the whole structure of it, the partnership from the very beginning. And it's just not about private sector coming in and building it for them."

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