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UK and Rwanda Trade & Investment Forum
22nd October 2014Confidential
Changing the Game for Africa
US$2.0
trillion
1.1 billion
38%
US$1tr
US$5.5 trillion
2.4 billion
60%
US$ 4.75tr
Collective GDP in 2013
Africa’s Population 2013
Population in Urban Areas 2013
Consumer Spending 2013
Collective GDP in 2050
Africa’s Population
2050
PopulationIn Urban
Areas 2050
Consumer Spending 2050
Africa is on the MoveEmerging as an Economic Success Story
Today Tomorrow
2
Innovative Solution
African Infrastructure MarketMarket Opportunity
Africa50
3
AN ATTRACTIVE ASSET CLASS
Secured cash flows backed by contractual agreements
Long term investment horizons
Responsible investments for institutional investorsHistorically, well-structured projects have generated
returns of 16-18% IRR in Africa
African Infrastructure MarketRobust, Safe and Steady Returns
4
African Infrastructure MarketLow Default Rates
5
Africa 138 1 0.7% 1 0.7%
African Infrastructure MarketWhat is Holding us Back?
Significant Infrastructure needs, however…
Lack of well prepared projectsLack of Public ResourcesLack of early risk-takers
Lack of Transaction AdvisorsLack of “Smart Capital”
Overcoming these will increase number of projects reaching commercial viability and bankability
African Infrastructure MarketWhat is Holding us Back?
PPF
Project Development
Licensing and permittingNegotiation of concession
Selection and negotiation of EPC
StructuringEquity and debt fund raising
Size of funding requirement to finance PIDA and Project
Development
PPFs resources are nowhere close to development capital
needs
PIDA Total Financing Required
$68 billionDevelopment Capital
Required
$2.5 billion per annum for 5 years
$80mil
Track Record of AfDBPrivate Sector Infrastructure Investments
8
Facilitated USD 32 billion worth of PPP and Private Sector Projects
Acted as Mandated Lead Arranger on 10 Projects
49 projects delivered
USD 3.1 billion invested
USD 4.6 billion syndicated
PPP or Private Infrastructure Investments between 2006 and 2014
Project DevelopmentCompany
Providing steady deal flow of well-structured
Projects
Project FinanceCompany
Sound investments generating commercial
returns
Africa50 will operate across the project life cycle through two separate companies each with
dedicated investor groups
What is Africa50?A “One-Stop-Shop” Approach
9
What is Africa50?A Capital Base at Sufficient Scale
Paid-in Capital of $3billion
Single “A” rating target
Leverage 2-3 times capital reaching up to $10billion
Project Development Capital of $500m
INFRASTRUCTURE INVESTMENT OPPORTUNITY
$100 Billion10
A Corporation - Commercial Structure
Autonomous - Own Rules & Procedures
Independent - Legally & Financially Independent
Capital Structure - A, B & C Shares
A TRUE PUBLIC PRIVATE PARTNERSHIP
What is Africa50?A New DNA, Flexible and Efficient
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AFRICAN GOVERNMENTSInitial Expressions of Interest
USD650 million
Project DevelopmentCompany
Seed investment of USD100 million over
3 to 4 years
Project Finance Company
Seed Investment of up to USD500 million
in tranches
African Development Bank Cornerstone Investor
Accelerated ImplementationStrong African Commitment
A project Example in Rwanda
13
Leveraging public and private resourcesRail Project
First phase to cost $8 m and financed as follows:
The 2nd and 3rd phases are estimated to cost around $40 m and $60 m. The cost sharing modalities for each party are described
in the JDA including incoming strategic investors
USD 8 million
Country B
USD 2m
Rwanda
USD 2m
Country A
USD 2m
USD 2m
14
Leveraging public and private resourcesRail Project
Private financing $1.5-4.5 10-35%
Vendor and user financing $1.2–2.5 5-20%
Sovereign Financing $7.5-10 50-70%
Total project cost $14 billion
Railway PPPs around the world have benefited from government participation of 50% to 80%
15
Africa50 as a Partner Adding value to increase pace of delivery
Driving force Ensures close monitoring on progress
Win – Win Partnership Acting as a honest broker, not for pure profit
Skin in the Game Financial contributor
Facilitator Coordinating activities among Government and Partners
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