Developing projects to reach bankability in Africa

Karim Mhirsi, Senior Investment Officer at Africa50, shares key insights on the challenges facing energy and infrastructure investment across the continent with ESI Africa Editor-in-Chief Nicolette Pombo-van Zyl.

Africa50 was set up a decade ago to focus on early-stage project development. They see a lot of appetite from financiers to invest once projects in Africa are well-structured and studies are done and bankability of been achieved.

“But there is scarce appetite to co-invest at early stage to derisk the project to carry out the relevant engineering studies, to negotiate the contracts, to procure the key contracts… what is needed for the projects to be bankable.

“So that’s one of the main bottlenecks and this is what we’re focusing our efforts[on] to actually unlock the potential.”

Mhirsi emphasised that sourcing financing for bankable projects is not the issue. “There is a lack of financing for projects that are two or three years before that stage.”

He explains the type of funding that is available in Africa to derisk projects to get them to bankability, and how Africa50 works in this space.