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Regional Integration

Regional infrastructure projects take advantage of economies of scale, reduce costs of services, and facilitate international trade to boost sustainable economic development. They link centers of consumption with remote sources of the services and connect national infrastructure networks to facilitate trade of goods and services and support mobility of people and information.

The private sector can play a crucial role in supporting the development of regional infrastructure by increasing project effectiveness and mobilizing financing from multiple parties. The private sector can also bring in technical know-how and the technology required to structure and implement these complex projects. However, preparing regional public-private partnership (PPP) projects requires considerable foresight, planning, and coordination by and among national and international entities. Securing the long-term, enduring commitment of the respective governments and institutions is also a challenge. These projects require highly competent teams in charge of preparing and launching the biddings, as well as overall legal and regulatory frameworks that are harmonized among the different countries involved, to provide the transparency, stability, and predictability necessary for private involvement.

PPIAF provides support to governments to help them address key issues associated with PPP regional infrastructure projects. With its significant experience in creating and strengthening the enabling environment for infrastructure PPPs, PPIAF is well positioned to assist governments with:

  • Harmonization of policies and regulations to make a regional project feasible and attractive to private participation
  • Building consensus to understand the benefits of regional infrastructure projects as well as the responsibilities that they entail for all stakeholders
  • Knowledge exchanges on good practices and lessons learned about regional infrastructure projects across sectors and regions
  • Design of frameworks to coordinate the activities of national PPP units with regional planning and preparation entities operating on a supra-national level, such as power pools, corridor authorities, and regional economic communities
  • Preparation of pioneering transactions that have a strong demonstration effect and could be replicated in different countries and sectors

Please see our brochure for more information.

PPIAF helping to improve broadband connectivity across West and Central Africa

Background: Improved access to ICT services can be a crucial tool in increasing economic development and poverty alleviation. Unfortunately, the development of the ICT sector in both West Africa and Central Africa has been constrained by poor access to international telecommunication capacity, over-dependence on satellite technologies, and a lack of competitive and affordable access to the existing cable infrastructure in the regions. In response to this, PPIAF has supported two important initiatives in the ICT sector in these two regions, which leverage off existing infrastructure across international borders to improve the regions’ access to ICT services.

PPIAF’s contribution: In West Africa, PPIAF supported ECOWAS through the funding of a detailed feasibility study on the use and commercialization of excess fiber communications capacity. The study provided advice on the key issues that will underpin the business case including: i) forecasting of potential telecommunication traffic and revenue in the region in order to size the potential market for the project; ii) recommendations on the optimal configuration of the network and potential contracting, funding, and financing options (including PPP structures); iii) recommendations on the optimal institutional and governance structures required to oversee this complex project; and iv) a legal and regulatory review of the project and the preparation of standard regulatory instruments. PPIAF also supported a consensus building exercise by organizing workshops on the key issues that engaged numerous stakeholders associated with the project. Such an exercise is crucial in developing a truly “regional” basis of support for the project.

In Central Africa, PPIAF has supported the Central African Backbone (CAB) project since 2006, when an initial feasibility study was carried out to analyze potential configurations for the backbone infrastructure and to assess the overall commercial and financial viability of the project. Building on the feasibility studies, PPIAF has since funded detailed pre-transaction advice to prepare the CAB project for market, including the following key tasks: i) preparation of bidding documents for the design, building, and maintenance of the network; ii) study of access and charging arrangements for the infrastructure; and iii) final technical and financial feasibility studies. As with the ECOWAS activity, PPIAF also supported a consensus building exercise by organizing workshops with key government stakeholders and decision-makers.

Impact: Both PPIAF initiatives have helped prepare these important projects for market and implementation. Once fully developed, these projects will help to ensure the development of a competitive, affordable, and modern telecommunications market in West and Central Africa. This will be achieved through maximizing the use of existing infrastructure and increased regional co-operation.

Both projects are also using innovative PPP solutions to implement the infrastructure as recommended by the PPIAF activities. Under the ECOWAS project, the various West African Power Pool electricity utilities will enter into a single lease agreement with various private ICT companies with the various charging and access arrangements overseen by a single (jointly-owned) management company. This approach should ensure that both public and private sources of funding will help develop and maintain the infrastructure, but will also improve the financial sustainability of the utility companies that make up the power pool.

The PPIAF-funded activities for the CAB project have subsequently been used by the Agence Française de Développement to finalize the design of the transaction, and have contributed to advancing the program of regional integration in various Central African countries, with the support of international donors such as the World Bank. Furthermore, the PPIAF-funded activity is leveraging over $455 million from regional development banks, and additional investments are expected from the private sector for the construction and operation of the CAB under a PPP scheme. Likewise, operators and Internet service providers in these countries are expected to benefit commercially from the low-cost bandwidth that will be provided under the project.