September 26, 2017

Uganda bucks trend by attracting private cash

June 30—In 2016, private investors were less willing to contribute cash for sub-Saharan African infrastructure projects compared to previous years according to a new World Bank report published this week, but Uganda was one of the three exceptions.

Uganda was the most active country with four projects, followed by Ghana and Senegal with two projects each. In 2015, the region saw considerably more projects: 22 projects in the energy sector (mostly in South Africa), and one project each in the transport and water sectors.

Notable projects during 2016 for Uganda include the $220 million China-Uganda Agricultural Industrial Park being fronted by Kehong Group China. There are also a raft of infrastructure projects in various stages of progress including a new airport to service western Uganda where the new oil and gas industry is being developed.

The latest edition of the Private Participation in Infrastructure (PPI) report says that 11 infrastructure deals totaling $3.3 billion, or five percent of the $71.5 billion global PPI investment went to Africa last year. This amount falls 48% below the 2015 and the five-year average investment, both at $6.4 billion.

By region, Latin America and the Caribbean received the highest levels of investment as a share of GDP, at 0.9 percent, followed by the Sub-Saharan Africa region, which saw 0.3 percent investment as a share of GDP.

IDA countries, (those that qualify for World Bank concessional lending), saw a very modest increase in investments in infrastructure with private participation in 2016. Investments amounting to $2.9 billion reached financial closure for 14 projects across seven IDA countries. While the amount is 8 percent higher than the $2.7 billion in investment committed in 2016, it is also only about half of the annual average of $5.7 billion during the years 2011 to 2015. Ghana and Honduras were the IDA countries that saw the most private participation in infrastructure in 2016.

However globally, the five countries with the highest levels of investment in 2016 were: Brazil, with $15.2 billion; China, with $11.4 billion; Colombia, with $10.1 billion; Indonesia, with $6.9 billion; and the Philippines, with $5.4 billion. These five countries together attracted $49.1 billion and captured 69 percent of global commitments to infrastructure investments in emerging economies in 2016.

Worldwide, there was a surge of investments in renewable energy amounting to $20.4 billion, or 61.4% of the total investment in electricity generation projects. The predominant technologies were: solar, with 53 projects; onshore wind, with 36 projects; and hydro-power, with 21 projects.

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