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‘EDF, private capital should fund infrastructure projects

‘EDF, private capital should fund infrastructure projects
Written by Kabanda Chulu
Thursday, September 17, 2009 12:10:53 AM

COMESA secretary general Sindiso Ngwenya has said there is need to create mechanisms to allow European Development Funds (EDF) resources to be blended with private capital to finance regional infrastructure projects.

During the High Level Meeting of the Eastern and Southern Africa and Indian Ocean regions and the European Union in Lusaka, Ngwenya said the EDF funds should be used to finance regional infrastructure projects.

“There is no mechanism that can allow EDF funds to leverage either concessionary loan or private sector finance and given the huge costs of infrastructure development, this is a major constraint hence methods should be created to blend EDF funds with private capital to finance regional infrastructure projects,” Ngwenya said. “For example, the European Commission pledged the use of 60 million euros from 10th EDF for the North-South corridor, however, given the constraints faced in disbursing this money, the money cannot be used to finance priority projects, meaning projects that need to be implemented much before 2012 will not be done because the money will have less influence than it can have since it cannot be used inconjucntion with other finances.”

He suggested that EDF finances in the Africa Infrastructure Fund of the European Investment Bank (EIB) could be blended with the lending capacity of the EIB and member state development financiers.

“The infrastructure fund provides grant-support for interest rate subsidies, project technical assistance, feasibility studies, one-off grants for environmental or social components linked to projects and payment of early stage, risk mitigation insurance premiums,” said Ngwenya.

And Inter-Regional Coordinating Committee (IRCC) chairperson Mahboub Maalim said the needs of the Africa, Caribbean and Pacific (ACP) region were too diverse to be addressed with one strategy.

“For example, our region with different states has different integration agendas, priorities and possibilities than the regions yet we have come forward with the solution to work together when we set up the IRCC platform, indeed comprising the main regional development partner and the European Commission,” said Maalim.

“I wish to reaffirm our commitment that respecting our individual regional specificities will not be preventing us from harmonising and rationalising regional integration instruments for our collective benefit.”

Labels: EUROPEAN DEVELOPMENT FUNDS, INFRASTRUCTURE, SINDISO NGWENYA

posted by MrK @ 11:14 PM