Public Policies and Fields of Action – Infrastructure 8 October 2015 Patrick Dlamini, CEO

Association of African Development Finance Institutions (AADFI) provides support to member institutions to build the capacity of Africa’s DFI cohort Objectives To promote economic and social development through cooperation Establish a machinery for systematic interchange Stimulate cooperation for the financing of economic and social development Knowledge sharing and best practice To accelerate regional integration Benefits Lines of credit from development partners Participation in meetings, symposia, workshops and related activities Technical assistance and capacity building Staff exchange and secondment with member-institutions Dialogue with multilateral institutions on development policies and project finance in Africa Established 1969, currently 81 members 2

Africa’s infrastructure delivery programme needs strong institutions, new modes of finance and partnerships SUB-SAHARAN AFRICA’S INFRASTRUCTURE LAGS + INSTITUTIONAL WEAKNESSES Infrastructure gaps have an impact on growth and trade within regions and across the continent. 3 Institutional weaknesses limit the ability to attract FDI and manage existing projects and investments Source: World Economic Forum: Africa Competitiveness Report 2015 AADFI through its partnerships has prepared member DFIs to play a significant role in Africa’s sustainable development programmes by aligning them to continental and global best practice Adoption of International Financial Reporting Standards (IFRS) and Accounting Standards established by the Organisation for the Harmonization of Business Law in Africa (SYSCOHADA) Prudential Standards and Guidelines and Rating System (PSGRS) – annual process, next self-assessment process November 2015 Development of Public Credit Guarantee Schemes for SMEs (where development really happens) Collaboration with ADFIAP in Malaysia on seeking alternative models for financing and promoting south- south collaboration for development

NEW OPPORTUNITIES FOR DFIs Crowd-in the private sector through structured and supported PPPs Develop new products to finance infrastructure programmes that include equity, project finance, project preparation and look at replicating models not widely used (Islamic Banking) Co-financing with new institutions (New Development Bank, Asian Infrastructure Investment Bank, etc.). Provide risk-protected post-conflict and fragile country support Introduce innovative risk strategies to finance public goods (water, sanitation, social infrastructure) Innovative infrastructure initiatives – green infrastructure, shared-use infrastructure, etc. Lead partnerships for sustainable development Develop equitable global, continental and regional frameworks to meet the Sustainable Development Goals New models of partnership to maximise limited resources for maximum development impact New role for Development Finance Institutions in financing sustainable infrastructure 4

DBSA model Private-sector partners Responsible business conduct Efficient use of financial instruments Prevention and prosecution of illegal or unethical behaviour Tradeable instruments and ownership structure Professional and sustainable operations Inclusive community engagement Ongoing community involvement during operation Participatory planning and low-burden construction Risk guarantees and political-risk insurances Effective interaction with public sector Monitoring of political develop- ments, and advocacy strategy Constructive communication with public agencies Influence implementation frameworks Infrastructure Delivery Division (with govt) defines and delivers social infrastructure projects Frontline divisions work with PIDA, NEPAD and other partners to facilitate infrastructure programme implementation Project planning and preparation Integrated infrastructure planning Project preparation to move projects to bankable stage Targeted development finance Green Fund, Jobs Fund, Global Environmental Facility Municipal finance, project finance, syndicated finance (new products) Monitoring and Evaluation (results focus) Increase development impact – make investments matter Measure for results and make adjustments to drive sustainable development International partnerships Drive continental and global infrastructure and SDG development South-South Cooperation (AADFI), Triangular Cooperation (IDFC), B20, ALIDE, etc. Public-Private collaboration Culture of open dialogue Management of risk perception and return expectation Multi-stakeholder dialogue beyond specific projects The DBSA operational model has taken into account partners, risk mitigation and sustainable development in infrastructure financing 5

in conclusion … To reiterate, we need strong institutions and strong partnerships Good frameworks to support Public-Private and Public-Public Partnerships Ethical financing for sustainable development and broad-based economic growth BUT we also need Brave leaders who make the difficult decisions on how to develop new institutions Approaches that develop the potential capacity of each institution, country and region to become the best they can within a new global reality We cannot follow old development finance practice in a world that is different. We need to be cognisant of those changes, the needs of our countries and the needs we endeavour to meet through financing for development.