Africa Investment Forum: African Continental Free Trade Area gives new impetus to deeper rail network | The African Development Bank | So Good News
Demand for more extensive rail infrastructure in Africa received a boost after the African Continental Free Trade Agreement entered into force in early 2021. The agreement aims to increase intra-regional trade and integration, two goals that rail corridors fulfill.
In March 2022, during virtual boardroom sessions organized by the Africa Investment Forum, investors, deal brokers and ministers came together to push for more rail deals. Deeper rail networks will increase Africa’s economic integration, and participants in these meetings, working to bring transactions to financial close, are well aware that the necessary funding will come from the private sector and international financial institutions.
The Africa Investment Forum is Africa’s premier platform for promoting deals towards financial close. The Market Days event, held annually, includes boardroom sessions that showcase billions of dollars in agriculture, transportation and energy deals, among other critical sectors, to investors.
Market Days have played a role in brokering previous rail deals. At Market Days 2019, held in Johannesburg, Afreximbank and Thelo DB signed a Memorandum of Understanding to develop, finance and operate railway projects across Africa. Afreximbank is one of the founders of the Africa Investment Forum. Thelo DB is a partnership between Thelo Ventures in South Africa and Germany’s Deutsche Bahn Engineering & Consulting.
Afreximbank and Thelo were party to an August 2022 agreement with the Ghanaian government to upgrade the country’s Western Rail Line and increase passenger and freight traffic. According to the agreement, Afreximbank will secure financing for the development of a 300 km stretch of the line. Thelo will manage the railway infrastructure.
At the Africa Investment Forum Market Days 2022, which will take place in Abidjan, Côte d’Ivoire from November 2 to 4, rail infrastructure will again be an important sector. Mobilizing resources for rail transport systems through public-private partnerships will also be an important part of the discussions.
The African Development Bank’s Vice President for Private Sector, Infrastructure and Industrialization Solomon Quaynor captured some of the challenges of rolling out rail systems during a September 2022 conference held in Johannesburg. “We need to explore different funding models and we need to think about this differently,” he said. – We must, for example, finance corridors and not just national railway networks. We need to think about public-private partnerships to leverage limited public capital, but we need to be aware of the risks that the private sector will not bear, Quaynor added
Market Days 2022 will showcase several rail projects seeking funding. It is also expected to showcase opportunities for investment in other transport sectors, including road corridors, as well as agribusiness, communications infrastructure, healthcare and creative sectors, including fashion and film.
The transactions will be sourced from the investment pipelines of the platform’s eight founding partners. They are the African Development Bank, Africa50; Africa Finance Corporation; the African Export-Import Bank; the Development Bank of South Africa; The Trade and Development Bank; The European Investment Bank; and the Islamic Development Bank.
Since its inception in 2018, the Africa Investment Forum platform has mobilized investment interests in excess of $100 billion.