AfDB aims for $10bn a year infrastructure finance

The African Development Bank (www.afdb.org) is aiming to commit up to $10 billion a year to infrastructure in Africa, according to a story on Reuters. Alex Rugamba, the bank’s Director for Regional Integration and Trade, told the newsagency on 26 July that the bank hopes to nearly double infrastructure funding over the coming 5 years.
“There’s a big interest in projects that can transform economies… for instance there’s big talk about railways. We want to revamp our railways. So if the trends continue as they are now, I would say within five years’ time we’ll be committing up to $10 billion per year on infrastructure.”
Rugamba said the AfDB was particularly interested in cross-border infrastructure ventures to drive economic growth by promoting trade within and between African countries. Other possible investments include regional power grids, cross-border highways and submarine telecommunications cables. For instance in January, the bank lent Ethiopia $125.6 million to finance the construction of the Mombasa-Nairobi-Addis Ababa Road corridor project phase II.
He reportedly added that countries, including Egypt, Morocco, South Africa and Tunisia, were absorbing large amounts: “South Africa last year took a loan of over $2 billion, which is almost about half our annual infrastructure budget and Egypt now takes in $400 million worth of credit for its energy sector per year.” Africa has always been able to absorb large amounts of infrastructure finance, but the AfDB had too little capital to meet demand.

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