PUBLIC-PRIVATE PARTNERSHIPS TO FINANCE INFRASTRUCTURE UPGRADES
By Antonio Guerrero
Tanzania plans to invest $742 million by the end of 2012 to tackle its crippling energy deficit.
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African energy projects to get PPP boost |
Under an emergency power rescue investment plan approved by parliament in August, the state-run Tanesco utility company will add 572 megawatts of power to the national grid by December 2012. The country has a 260MW deficit, with the shortage exacerbated by an ongoing drought and by inadequate infrastructure for natural gas development.
The plan also calls for construction of a natural gas pipeline, possibly with financing from China. According to the Confederation of Tanzania Industries, the country’s main business organization, some 50 factories have closed due to rolling blackouts. The IMF has cut its 2011 GDP growth forecast for Tanzania to 6% from a previous 7.2%.
With the World Bank estimating Africa requires $93 billion in annual infrastructure investments, its International Finance Corporation (IFC) says an expected reduction in international aid flows, coupled with a push by African governments to upgrade infrastructure through public-private partnerships, present strong private sector investment opportunities.
Yolande Duhem, the IFC’s head for West and Central Africa, says that although Central African countries have been slower than their West African neighbors to adopt reforms needed to attract investors, recent relative stability is presenting business opportunities. The IFC reported an 8.3% decrease in its investments in sub-Saharan Africa, to $2.2 billion, during the 2011 fiscal year but expects to increase the figure to $2.5 billion next fiscal year. The IFC investment will support infrastructure and financial sector expansion in the region.
The Kenyan government is selling off its stakes in several hotels. Although the privatizations were first earmarked in 2009, the plan was just approved by the cabinet in August. The sale of stakes in 11 hotels held by the Kenya Tourist Development Corporation is expected to raise $86 million. Funds will be used to help finance a $1.64 billion budget deficit for the current fiscal year. The IMF expressed concerns over Kenya’s growing public debt, which stands at more than 47% of GDP.
