Newsletter Subscription

The number of infrastructure projects and countries in Sub-Saharan Africa receiving private investment commitments in 2022 was the highest in a decade, according to the World Bank’s Private Participation in Infrastructure (PPI) annual report. However, the total investment value fell 10% year on year.

In 2022, 37 projects in 19 countries in Sub-Saharan Africa received private investments totalling US$4.9 billion.

The biggest investments were made in the power sector, with South Africa the major market following regulatory changes to encourage private projects.

Other countries in Sub-Saharan Africa with PPI transactions in 2022 included Benin, Botswana, Burkina Faso, Cameroon, the Democratic Republic of Congo, Côte d’Ivoire, Gabon, Kenya, Lesotho, Madagascar, Malawi, Mali, Mozambique, Nigeria, Senegal, Togo, Uganda and Zimbabwe.

The report says that Benin and Lesotho saw their first PPI transactions in 10 years. Benin signed four concession agreements for the development, financing, construction and operation of photovoltaic solar plants with a combined capacity of 50MW. 

In Lesotho, OnePower’s project to construct 11 solar mini-grids for rural communities attracted investment from the European Union’s Electrification Financing Initiative and the UK’s Renewable Energy Performance Platform.

Senegal concluded two significant PPI investments during 2022 for the construction of the 120MW Malicounda dual fuel power plant and the port of Ndayane, representing a total investment of US$1.3 billion. 

The government signed agreements with Dubai’s DP World to develop a US$1.1 billion deep-water port at Ndayane over two phases. 

“This is expected to boost the PPI investment commitments in Senegal in the coming years as the country plans to undertake several capital expenditure projects,” the World Bank notes in the report.

Thanks to the Ndayane project, Sub-Saharan Africa was the stand-out region in 2022 for private investment in ports infrastructure.

Looking at the global picture for PPI as a whole, investment commitments last year reached US$91.7 billion across 263 projects. The transport sector surpassed all other sectors, attracting 68% of the total investment. 

The transport sector drew US$62.1 billion-worth of investment across 85 projects.

The energy sector came second with US$25.9 billion across 136 projects.

The water and sewerage sector secured investment commitments of US$2.3 billion for 25 projects.

Municipal solid waste amounted to US$795 million across nine projects, marking an almost 300% increase from 2021, while ICT attracted US$545 million across eight projects.

The World Bank notes that last year saw an increase in development and export finance institution (DEFI) participation in infrastructure projects, with 68 projects receiving some form of DEFI support, or 26% of all PPI projects.

By investment value, projects with DEFI support accounted for 22% of total investment commitments. Four megaprojects received DEFI support including the Senegal port project.

As for commercial lenders, they clearly favoured renewables projects over conventional energy investments in 2022, demonstrating that the global energy transition is impacting financial flows.

“Multilateral, bilateral and international commercial lenders continued to be more inclined to provide loans to renewable energy generation projects in 2022,” the report says.

Some 51% of international commercial debt (US$3.7 billion) was lent to renewable energy projects last year. This compares to 14% lent to conventional energy projects.

Multilateral and bilateral debt showed similar trends, with 58% and 60% respectively directed towards renewable energy projects, and 18% and 16% towards conventional energy schemes.

Overall, commercial debt accounted for 25% of investment flows.

The region with the largest number of internationally sponsored projects in 2022 was Latin America and the Caribbean, with 45 projects from a total of 83 (54%) receiving overseas funding.  

Sub-Saharan Africa had the second-largest number of foreign-sponsored projects with 30 out of 37 projects (81%) receiving overseas funding. France was the main country of origin, sponsoring 10 projects in Sub-Saharan Africa.

Looking globally, France was the country that sponsored the most international projects last year, supporting a total of 20.

Entities based in the UK sponsored 12 international projects, while the UAE and Spain both sponsored nine international projects. In terms of investment volume, Spain and France were the main countries of origin, sponsoring international projects worth US$5.2 billion and US$3.4 billion, respectively.

The World Bank’s annual PPI report is based on the information indicated in its Private Participation in Infrastructure Database, which aims to identify and disseminate information on private participation in infrastructure projects in low and middle-income countries.

Graphs: World Bank PPI 2023 report

Top photo: © 7xpert | Dreamstime