USUS$1 Trillion Infrastructure Investment Opportunity in 10 Compact with Africa Countries Trillion Infrastructure Investment Opportunity in 10 Compact with Africa Countries | Financial Buzz

US$1 Trillion Infrastructure Investment Opportunity in 10 Compact with Africa Countries

A new report released today by the Global Infrastructure Hub, a G20
initiative, has revealed an infrastructure investment gap of US$1
trillion in 10 Compact with Africa1 countries over the next
22 years. This represents a 42 per cent investment gap; one of the
largest regional gaps in the world.

Global Infrastructure Outlook: Infrastructure Investment Need in the
Compact with Africa Countries, finds that US$2.4 trillion of
investment is required in 10 countries by 2040 if they are to keep pace
with economic growth and close infrastructure gaps. Only US$1.4 trillion
is expected to be delivered based on current spending levels.

Further, of the US$1 trillion investment gap, US$415 billion is required
by 2030 if these countries are to meet the UN Sustainable Development
Goals (SDGs) for universal access to drinking water, sanitation and
electricity.

Outlook forecasts – for the first time – the scale of the
infrastructure investment need, current investment trends, and
corresponding investment gaps in 10 Compact with Africa countries at a
country and sector level.

According to the Annual Global Infrastructure Investor Survey 2017 by
the Global Infrastructure Hub and EDHEC Infrastructure
Institute-Singapore, 37 per cent of infrastructure investors invest in
emerging markets, up from 20 per cent in 2016. Of those already
investing in emerging markets, 82 per cent want to increase their
investment2.

Global Infrastructure Hub CEO Chris Heathcote said that, “These figures
demonstrate a clear desire from investors to spend more in emerging
markets. However, attracting private sector investment into African
countries remains a major challenge.”

“The key to addressing this is creating the right environment to
encourage investors to turn their interest into action,” Mr Heathcote
added.

The Global Infrastructure Hub’s newly-updated tool, InfraCompass: Set
your Infrastructure Policies in the Right Direction in the Compact with
Africa Countries, has revealed that opportunities for improvement
lie in governance and the regulatory and institutional frameworks in
each of the countries. InfraCompass finds that Morocco and Rwanda
are notable performers, marked by improvements to their regulatory
quality, rule of law, and investment and competition frameworks.

Mr Heathcote said that partnering with the 10 countries to address these
matters would build investor confidence and lead them to fulfil their
economic growth potential.

“It’s now more important than ever that emerging markets continue to
develop their infrastructure project pipelines, as well as continuing a
track record of attracting public and private capital into
well-identified, selected and prioritised projects,” Mr Heathcote said.

“As the investment environment in these 10 countries improves, there is
a real opportunity for infrastructure investors to deliver impactful
projects; providing access to essential services— roads and rail,
airports and seaports, telecommunications, drinking water, sanitation
and energy— for a large proportion of the population.”

Thierry Déau, Founder, Chairman and CEO of Meridiam,
said that the Global Infrastructure Hub has provided much-needed
new data that reveals the infrastructure investment gap at a country and
sector level.

“As an active investor in Africa, this new data from the Global
Infrastructure Hub will help us to identify where needs are greatest and
where we as investors can assist in meeting the UN SDGs which are at
risk of not being achieved unless we all—investors, governments and
advisers—scale up our commitments to the region.”

Philippe Valahu, CEO, Private Infrastructure Development Group (PIDG)
agreed.

“Investing in emerging markets is core business for PIDG, having
mobilised more than US$15 billion of private sector investment in Africa
since 2002, and launching InfraCredit, which has been transformative in
emerging financial markets,” Mr Valahu said.

“The Global Infrastructure Hub’s new data reveals the urgent need for
much higher investment and the vast opportunity for institutional
investors to help close infrastructure gaps and achieve risk adjusted
returns.”

The two reports were researched and developed over a six-month period in
partnership with Oxford Economics (Outlook) and KPMG (InfraCompass).
Both are available in an interactive format on our open access platform
at https://www.gihub.org.

ENDS

Notes to editors

The full Global Infrastructure Outlook: Forecasting
infrastructure investment needs and gaps report and online tool can
be found at: https://outlook.gihub.org

The full InfraCompass: Set your infrastructure policies in the
right direction report and online tool can be found at: https://infracompass.gihub.org

About Global Infrastructure Outlook

In 2017, the Global Infrastructure Hub, in partnership with Oxford
Economics, launched Global Infrastructure Outlook to explore how
much the world needs to invest in infrastructure at a country and sector
level up to 2040. It helps address a lack of detailed information
relating to global infrastructure investment.

The most recent update to Global Infrastructure Outlook expands
upon the 2017 study and focusses on 10 Compact with Africa countries,
aiming to offer an analysis and economic metrics for the level of
funding needed to meet their growing infrastructure needs. The report
outlines total infrastructure investment needs, current investment
trends and the specific investment required to meet the water,
sanitation and electricity UN Sustainable Development Goals.

About InfraCompass

InfraCompass, in partnership with KPMG, is a tool developed to
help countries deliver infrastructure more effectively and to provide a
robust understanding of a country’s infrastructure market. InfraCompass
has been updated to cover 56 countries, including 10 Compact with Africa
countries.

InfraCompass is a comprehensive, easy-to-use online database that
reveals country infrastructure performances in the categories of:

About the Global Infrastructure Hub

Launched in 2014 by the G20, the Global Infrastructure Hub is an
organisation dedicated solely to infrastructure in both developed and
emerging markets. The global challenge remains acute given population
growth, increasing urbanisation, and a need to replace ageing
infrastructure. We are helping governments unlock trillions of dollars
in private investment to fund much-needed public infrastructure,
creating productive economies and more liveable cities. We work with
both public and private sectors to facilitate knowledge-sharing,
highlight reform opportunities, support the adoption of leading
practices and help to build the global pipeline of quality, bankable
infrastructure projects. We are independent and provide all our tools
and services on an open and free to access platform. For more
information, visit: http://gihub.org

About the Compact with Africa

The Compact with Africa was initiated by the German G20 presidency in
the Finance Track, endorsed by the G20 finance ministers and central
bank governors in Baden-Baden in March 2017, to promote private
investment in Africa, including in infrastructure. Central to the
Compact with Africa is the concept of mutual commitments to measures and
instruments to improve the framework conditions for private investment,
including in infrastructure. The aim is to develop comprehensive,
coordinated, and country specific investment compacts between individual
African countries, international organisations (IOs), and other
partners. Investment Compacts will specify measures and instruments to
improve the macro, business and financing frameworks.

For more information, visit: https://www.compactwithafrica.org/content/compactwithafrica/home.html

1 The 10 countries are: Morocco, Tunisia, Egypt, Ethiopia,
Senegal, Guinea, Côte d’Ivoire, Ghana, Benin, Rwanda

2 The Global Infrastructure Hub and EDHEC Infrastructure
Institute-Singapore (EDHECinfra) https://www.gihub.org/resources/publications/edhec-annual-global-infrastructure-investor-survey-2017/

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