Reconstruire en mieux pour une reprise durable et résilience après la Covid-19
Interview with Mtchera Johannes Chirwa, Chief Infrastructure & PPP Specialist at African Development Bank
MTCHERA JOHANNES CHIRWA HAS BEEN WORKING AT AFDB FOR ALMOST 13 YEARS. AS A CHIEF INFRASTRUCTURE & PPP SPECIALIST, HE IS RESPONSIBLE FOR PROVIDING HIGHER LEVEL POLICY & STRATEGIC ADVICE ON REGIONAL & CONTINENTAL INFRASTRUCTURE AND PUBLIC PRIVATE PARTNERSHIPS (PPPS) TO DEVELOPERS, GOVERNMENTS AND REGIONAL ORGANISATIONS; ASSISTANCE WITH DEVELOPING, STRUCTURING, AND PREPARATION FOR INVESTMENT FINANCING (FEASIBILITY & DESIGN) OF MULTINATIONAL TRANSPORT (ROADS, RAIL, PORTS), ENERGY (POWER GENERATION & TRANSMISSION), ICT (TERRESTRIAL & SUBMARINE FIBRE OPTIC CABLES) AND TRANSBOUNDARY WATER (RESERVOIRS & CONVEYANCE SYSTEMS) INFRASTRUCTURE PROJECTS IN THE SOUTHERN AFRICA REGION. LET'S MEET HIM.
54 ETATS: PICU 3 IS CONTINUING IN ITS DELIVERING OF THE BELOW FOUR MAIN PILLARS NAMELY NEPAD-IPPF, ICA, PPP INFRASTRUCTURE ADVISORY SERVICES, PARTNERSHIPS, WHAT IS YOUR GLOBAL MISSION AS CHIEF INFRASTRUCTURE & PPP SPECIALIST?
Mtchera Johannes Chirwa: My global mission is to assist the Bank to achieve its mission in supporting the development of infrastructure in Africa. This is done by leading the development and coordination of programmes, projects and activities to support the advancement and implementation of regional infrastructure projects at the continental, regional and national levels to enhance the achievement of the Bank’s regional infrastructure development objectives. My role entails providing specialist professional advice and support to internal and external clients to successfully develop, structure and implement regional infrastructure programmes and projects, either through public finance or through Public Private Partnerships (PPPs). In addition, I provide leadership in the Bank’s policy and strategic dialogue with external partners on the development and implementation of regional infrastructure programmes and projects, and the development of PPPs.
54 ETATS: HOW DO YOU CREATE BANKABLE PROJECT?
Mtchera Johannes Chirwa: A project becomes bankable when it has been prepared and developed to a sufficient level to demonstrate its potential benefits for a financier or investor to commit to financing or investing in the project. Therefore in our work of preparing infrastructure projects with detailed technical, economic, financial, environmental and social studies, and in some cases even detailed engineering design and structuring, we are enabling more of such projects to become bankable – to become attractive propositions for investment financing.
54 ETATS: HOW DO YOU BALANCE PORTFOLIO PROJECT BETWEEN ICT, ENERGY, WATER, TRANSPORT'S SECTORS? TELL US ABOUT ONE OF YOUR ONGOING PROJECTS.
Mtchera Johannes Chirwa: When developing our annual Work Programme of projects selected and prioritized for our assistance, we try and ensure sufficient balance between the demand (for the preparation of projects in specific sectors and regions of the continent), with the available resources for commitment as well as ensuring that no one sector is left behind. As such, despite that the transport and energy sectors comprise the highest demand (number of projects seeking assistance), our portfolio also comprises some ICT and water sector projects in line with our mandate and requirements from our strategic business plan.
I have many on-going projects in different sectors and regions and so it is rather difficult to single out one of them. However, for the purposes of this interview I can talk about the Lesotho Botswana Water Transfer Project, for which we are currently supporting the preparation of detailed Feasibility Studies.
The project is a priority investment project selected for development under the Integrated Water Resources Management Plan of the Orange-Senqu River Basin in Southern Africa, and is also part of the continental priority list under the second phase of the Programme for Infrastructure Development in Africa (PIDA) Priority Action Plan (PAP) 2. The project comprises the development of a dam and water storage reservoir in the Lesotho Lowlands, and a construction of a bulk water conveyance system from the reservoir, through South Africa to Botswana, over an estimated distance of 712Kms. The project is being developed by the Governments of Lesotho, Botswana and South Africa, and being coordinated by the Orange Senqu River Commission (ORASECOM), a regional Trans-boundary River Basin Commission whose secretariat is in South Africa. The project aims to provide water to the three countries as well as electricity to compliment the system power needs and that of the local towns in the countries. The combined effect of water delivery and power generation will ensure increased economic viability of the project. The outcomes from the proposed project will ensure water and power security and the optimization of the water resources development, based on balanced economic, social and environmental considerations.
Implementation of the studies is in the procurement phase currently, financed by the NEPAD-IPPF with a Grant of USD 1.5 million, in addition to a previous Grant of USD 1.2 million (which financed preliminary basin wide studies), and is expected to be completed in 2023. The down stream investment cost for the project is estimated at USD 3 billion.
54 ETATS: WHAT IS THE NEW APPROACH OF THE BANK TO GET FOREIGN AND AFRICAN PRIVATE SECTOR IN?
Mtchera Johannes Chirwa: The Bank assist its Member Countries to secure (both foreign and local) investment by supporting necessary reforms at country level to improve the enabling environment, building local capacity of key state institutions and agencies, as well as providing a suite of financial products. Such financial products cover a range of instruments to support Technical Assistance, access to loans and grants, equity investment, as well as guarantee and credit enhancement instruments. In addition, the Bank is providing to its Member Countries, several innovative financing mechanisms such as blended financing, Infrastructure Asset Recycling, infrastructure bonds, climate financing, subnational lending etc., to enhance options for structuring financing of their investments, but also enabling more private sector investments. Of particular note is the development of a Public Private Partnerships (PPP) Strategic Framework of the Bank, which will scale up the Banks support for the development and implementation of infrastructure PPP projects in Member Countries by supporting enabling environment and capacity, project preparation and transaction advisory services, and project financing.
54 ETATS: WITH THE PANDEMIC, ALL ECONOMIES ARE WEAKENED, IN YOUR OPINION, WHAT WILL HAPPEN IN THE NEAR FUTURE?
Mtchera Johannes Chirwa: Indeed, the COVID-19 pandemic has resulted into significant social, economic and development challenges globally, and specifically in Africa. Most countries are having to divert their scarce resources to fight the pandemic, resulting in reduced allocations for other development priorities including infrastructure. However, we believe that rebuilding economies post COVID, presents a good opportunity for Africa, and infrastructure investment will play a crucial role in the recovery of global and national economies. With limited fiscal space for governments, the private sector needs to play a more prominent role in driving economic transformation in Africa. It is therefore imperative that we find ways of making infrastructure investments a catalyst for building back better, and more sustainably, addressing concerns of private capital providers as we get out this pandemic.
The Bank will therefore continue to support governments to create favorable enabling environments, but also support the preparation of projects and mobilization of private sector funds in the continent. Going forward, the Bank will raise commercial financing from institutional investors but also concessional funds, such as climate funds, for blending and investing in transformational projects in public-private partnership structures.
The use of innovative financing mechanisms such as PPPs will also become an even more attractive option due to fiscal constraints, and as a way of attracting more private sector investment for Infrastructure post COVID. The Bank’s view is that such infrastructure should be designed with special considerations to reduce likelihood of future shocks, increasing society’s resilience. Key to achieving this is focus on human well-being and inclusiveness, essential for ensuring that future investments address the COVID-19 impacts helping African countries to “build back better and greener” in alignment with their key priorities.