Provide financing alternatives for infrastructure projects – HIG to African leaders
Chief Executive Officer (CEO) of Hospital Infrastructure Group (HIG) Kwabena Nyarko has called on Africa leaders to provide strategic alternative financing for infrastructure projects in the countries and on the continent as a whole. He made the call when he delivered an address at the Global Africa Forum organised by Africa Prosperity Network (APN) in … The post Provide financing alternatives for infrastructure projects – HIG to African leaders appeared first on Asaase Radio.
Chief Executive Officer (CEO) of Hospital Infrastructure Group (HIG) Kwabena Nyarko has called on Africa leaders to provide strategic alternative financing for infrastructure projects in the countries and on the continent as a whole.
He made the call when he delivered an address at the Global Africa Forum organised by Africa Prosperity Network (APN) in partnership with the African American Institute (AAI) on Wednesday, 25 September 2024, on the sidelines of the 79th United Nations General Assembly (UNGA) in New York City, USA.
Speaking on the theme: “Mobilising Global African Investments for Africa’s Infrastructural Needs,” Mr Kwabena Nyarko said Africa is often spoken of in terms of “its potential” but as Abraham Lincoln put it “The best way to predict your future is to create it.” He noted that “It is time for Africa to create its future because by 2050, Africa’s population is expected to hit 2.4 billion, and this calls for substantial investments in infrastructure development.Mr Kwabena Nyarko Chief Executive Officer of Health
“Four key elements could drive Africa and make Africa more globally competitive in attracting investments. These are Africa’s Favorable Demographics, Improved Governance Frameworks (including PPP’s), Development of AI & Technology, and AFCTFA (single market of 1.4 billion).
“Africa governments alone can not meet the annual funding requirement of $ 150 billion for infrastructure development, so there’s the need to switch from traditional funding sources to more strategic financing & project structuring mechanisms,” Mr Nyarko said.
To emphasise his call, Mr Nyarko observed that as an example, a decade ago, Ghana set up the Ghana Infrastructure Investment Fund (GIIF), a sovereign wealth fund capitalized with $325m anchor equity to act as a catalyst to leverage private sector funds into infrastructure assets in Ghana.
“Significantly, for every $1 invested, GIIF has attracted $10 in private sector investment into Ghana without the anchor of sovereign guarantees. To this end, the CEO of HIG shared two examples of project structuring & financing options for accelerated infrastructure delivery.
“At the height of COVID-19, Government of Ghana, decided to build 101 District hospitals, 7 Regional Hospitals, 3 Psychiatric Hospitals estimated to cost $ 1.8 billion, and aimed at bridging the healthcare infrastructural gaps across the country. This project is known as Agenda 111, which I daresay is the largest healthcare infrastructure project in Africa.
“I recall leaving my first meeting with the president and wondering to myself “What on earth have I gotten myself into? There were two key questions on my mind. How to get the technical aspects delivered, but the bigger one was how the project would be funded?” Mr Nyarko remarked.
“After several Project Strategy Sessions, it was agreed that government through GIIF would provide funding to execute the initial phase, and GIIF was tasked to oversee the payment process, ensure integrity, and eliminate red-tape.
Hospital Infrastructure Group as Lead Consultants and Project Managers were tasked to oversee project implementation working with GIIF and the Office of the President. This approach is a major departure from the traditional project approach to delivery, where large infrastructure projects are driven by government ministries. This has enabled construction in record time, and the first batch of hospitals will be commissioned before the end of 2024,” the CEO of HIG further remarked.
The second example, according to Mr Nyarko, is Ghana’s 28km Accra-Tema Motorway & N1 Extension Project. This road project he said, “seeks to enhance a key portion of the West African Transnational Highway, and the government requested that GIIF develop a ring-fenced SPV through which funds will be channeled exclusively for the accelerated delivery of the project.”
“The GIIF SPV was granted a concession, and the project is to be executed in 3 Phases at a cost of $600 million. GoG is to provide $ 380 million as equity for EPC works. On completion of the first phase, GoG acting through the SPV will leverage its equity to raise additional funding for phases 2 & 3 under PPP arrangments.
“These examples show the value of leveraging our resources and expertise to drive localised infrastructure projects and has enabled Government to prepare and de-risk the projects, making them more attractive to private entities, DFI’s bilateral and multilateral partners to fund in a PPP arrangement,” Nyarko said.
“African Governments should adequately capitalise their sovereign wealth funds to focus on infrastructure development and African Governments should leverage their resources and expertise in providing strategic financing alternatives for resilient and sustainable infrastructure projects that benefit the local economies,” the HIG boss further stated.
Reporting by Wilberforce Asare in New York City, USA
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