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Gil 2012 Africa Mega Trends Africa Infrastructure by David Winter

Samantha James
Samantha James

African infrastructure development requires $810 billion in investment over the next five years. Currently, $363 billion is being invested in infrastructure projects in Sub-Saharan Africa, with the majority going to transport and energy projects. Successful infrastructure development is needed to support economic growth and achieve development goals, but faces challenges including a lack of funding, political instability, and corruption.

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African Infrastructure Development David Winter Business Unit Leader Infrastructure - Africa We Accelerate Growth 1
Why should African infrastructure development interest you and your business?
Africa Key Infrastructure Statistics $810 billion $363 billion 56% 35% % of Total spending Is the current % of investment in needed over the next spending on investment in Sub-Saharan five years to upgrade, infrastructure Sub-Saharan Africa on rehabilitate and development in Sub- Africa on energy and expand Africas Saharan Africa transport power infrastructure infrastructure infrastructure 30 $145 50 years Is the It will take 50 number of billion years for most countries in South Africa is countries in Africa which currently Africa to reach have regular investing $145 universal access power billion in to modern outages infrastructure infrastructure 50% 70% Infrastructure In land-locked development has countries, transport been responsible accounts for 70% for more than of the value half of Africas of exported improved goods economic performance Source: World Bank and Frost and Sullivan analysis *based on active projects in 2011
Infrastructure Africa: Market Outlook Infrastructure Development in Sub-Saharan Africa Transport Energy Total investment $161 billion $127 billion amounts to $363 billion Legend: Investment ($ billion) < 0.5 0.5 1.0 Number of high value 1.0 5.0 projects, many valued 5.0 10.0 >$1 billion 0.0 15.0 15.0 Water Social Telecoms $15 billion $43 billion $17 billion Most projects valued < $100 million Source: Frost and Sullivan analysis *based on active projects in 2011 4
Infrastructure Africa: Market Outlook $363 billion is being invested in infrastructure development in Sub- Saharan Africa South Africa is the leader in infrastructure development on the continent, investing $145 billion Nigeria and Mozambique (Includes housing, hospital account for 10.8% and and school construction) 9.4% of infrastructure investment $288 billion will be invested in the transport and energy and power sectors Source: Frost and Sullivan analysis *based on active projects in 2011 5
Infrastructure Africa: Market Outlook What impacts infrastructure development on the continent? Drivers Challenges Millennium Development Goal targets Project funds have to be secured from the private Increasing Expansion of sector / donors as African countries do not have private sector the mining participation industry sufficient funds to support infrastructure development Skills shortage on the continent results in engineers and other skilled labour being imported for projects, increasing costs Restraints Corruption and Reliance on Political Instability in the long term increases mal- private sector / the risk of future projects. This challenge is administration donor funding particularly pertinent in a country like Nigeria. Poor power supply capacity, restricting the growth of economies Source: Frost and Sullivan analysis 6
Infrastructure Africa: Market Outlook $28 billion will be invested in transport corridor development in Sub- Saharan Africa Current state of transport infrastructure: Roads in good condition Freight transport by rail Western 72% Western 11% Central 49% Central 2% Eastern 82% Eastern 2% Southern 100% Southern 85% Container dwell times 10 transport corridors (International standard: 7 days) Western 11-30 days are being developed Eastern 5-28 days across the region Southern 4-8 days Road $9.2 billion Creation of 9 Trans-African Highways Rail $14.8 billion Rail networks to receive bulk of investment Ports $3.5 billion Ports development to decrease bottlenecks Source: World Bank and Frost and Sullivan analysis *based on active projects in 2011 7
Infrastructure Africa: Market Outlook Rail infrastructure is the fastest growing segment of transport infrastructure Morocco African $14.67B 2 Active rail projects amount Planned 1 governments are to $48 billion Ongoing trying hard to reduce the burden Ethiopia on road $3.70B infrastructure 5 1 7 1 3 7 Ghana This will reduce Kenya $6.40B 3 transport costs and 1 $405.5M Nigeria help open up land- Zambia $6.40B locked economies $93.8 M 3 Tanzania Namibia $5.37B $2.68B 2 4 2 1 Mozambique $4.8 billion to be Multi-Country Mega Projects 1 3 $3.66B invested in public Botswana-Mozambique- transport $7.0B Zimbabwe infrastructure: Isaka-Keza-Kigali $1.9B Botswana (Tanzania-Rwanda) Lagos, Abuja, Maputo, Addis $1.40B Namibia-Botswana $1.3B Source: Frost and Sullivan analysis *based on active projects in 2011 8
Infrastructure Africa: Market Outlook $94 billion will be invested in the energy sector in Sub-Saharan Africa Sub-Saharan Africa generation capacity is 68 GW - equal to Spain in Europe South Africa produces 40 GW alone Mining industry drives growth in installed capacity 5.0 GW 18.0 GW Will continue to be the major 2.0 GW 3.6 GW energy source to 2020 2.0 GW 3.3 GW 0.4 GW 0.5 GW 4.2 GW $57.7 billion (12 GW) to be 6.3 GW developed in renewable 2009 52.6 GW energies by 2020 across Africa 2020 111.6 GW 1.7 GW 2.0 GW 5.2 GW 1.1 GW Governments to encourage 0.7 GW involvement of private 0.1 GW 2.2 GW sector 0.4 GW 65.4 GW 2009 2020 10,000 km of transmission lines will be used to exploit 40.0 GW larger scale, cheaper energy Source: Frost and Sullivan analysis *based on active projects in 2011 sources 9
Infrastructure Africa: Market Outlook $15 billion will be invested in water and wastewater infrastructure in Sub-Saharan Africa Water projects greatly outnumber wastewater projects in Africa Access to modern infrastructure: 1/0 Piped water Flushing toilet 20/0 Urban 39% Urban 25% 7/2 15/7 Rural 5% Rural 2% 10/1 12/6 Legend Number of WT/ projects WWT 13/0 Large number of projects, 6/2 10/0 valued at less than $100 million % of Greenfield projects <20% 9/3 4/2 20%-40% 40%-60% Millennium Development Goals 60%-70% are key driver 66/13 Number of projects >70% Majority of funding is donor Rehabilitation, upgrading and sourced improvement projects characterise development 10
Infrastructure Africa: Market Outlook Snapshot of Mega-Infrastructure Projects across the Continent $6.3 billion 2,000 MW Wind and $6 billion 2,000 MW Solar Power Plan Development of a new deep sea port $7 billion Rehabilitation of 60,000km of urban and rural roads $10 billion 200,000 low cost houses $2.5 billion $1.2 billion 1600 MW 1,500 km railway line linking hydropower station Namibia to Botswana $14.5 billion Worlds 3rd $7 billion largest 1,100 km railway linking supercritical Botswana to Mozambique Source: Frost and Sullivan analysis coal fired plant via Zimbabwe *based on active projects in 2011 11

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Gil 2012 Africa Mega Trends Africa Infrastructure by David Winter

  • 1. African Infrastructure Development David Winter Business Unit Leader Infrastructure - Africa We Accelerate Growth 1
  • 2. Why should African infrastructure development interest you and your business?
  • 3. Africa Key Infrastructure Statistics $810 billion $363 billion 56% 35% % of Total spending Is the current % of investment in needed over the next spending on investment in Sub-Saharan five years to upgrade, infrastructure Sub-Saharan Africa on rehabilitate and development in Sub- Africa on energy and expand Africas Saharan Africa transport power infrastructure infrastructure infrastructure 30 $145 50 years Is the It will take 50 number of billion years for most countries in South Africa is countries in Africa which currently Africa to reach have regular investing $145 universal access power billion in to modern outages infrastructure infrastructure 50% 70% Infrastructure In land-locked development has countries, transport been responsible accounts for 70% for more than of the value half of Africas of exported improved goods economic performance Source: World Bank and Frost and Sullivan analysis *based on active projects in 2011
  • 4. Infrastructure Africa: Market Outlook Infrastructure Development in Sub-Saharan Africa Transport Energy Total investment $161 billion $127 billion amounts to $363 billion Legend: Investment ($ billion) < 0.5 0.5 1.0 Number of high value 1.0 5.0 projects, many valued 5.0 10.0 >$1 billion 0.0 15.0 15.0 Water Social Telecoms $15 billion $43 billion $17 billion Most projects valued < $100 million Source: Frost and Sullivan analysis *based on active projects in 2011 4
  • 5. Infrastructure Africa: Market Outlook $363 billion is being invested in infrastructure development in Sub- Saharan Africa South Africa is the leader in infrastructure development on the continent, investing $145 billion Nigeria and Mozambique (Includes housing, hospital account for 10.8% and and school construction) 9.4% of infrastructure investment $288 billion will be invested in the transport and energy and power sectors Source: Frost and Sullivan analysis *based on active projects in 2011 5
  • 6. Infrastructure Africa: Market Outlook What impacts infrastructure development on the continent? Drivers Challenges Millennium Development Goal targets Project funds have to be secured from the private Increasing Expansion of sector / donors as African countries do not have private sector the mining participation industry sufficient funds to support infrastructure development Skills shortage on the continent results in engineers and other skilled labour being imported for projects, increasing costs Restraints Corruption and Reliance on Political Instability in the long term increases mal- private sector / the risk of future projects. This challenge is administration donor funding particularly pertinent in a country like Nigeria. Poor power supply capacity, restricting the growth of economies Source: Frost and Sullivan analysis 6
  • 7. Infrastructure Africa: Market Outlook $28 billion will be invested in transport corridor development in Sub- Saharan Africa Current state of transport infrastructure: Roads in good condition Freight transport by rail Western 72% Western 11% Central 49% Central 2% Eastern 82% Eastern 2% Southern 100% Southern 85% Container dwell times 10 transport corridors (International standard: 7 days) Western 11-30 days are being developed Eastern 5-28 days across the region Southern 4-8 days Road $9.2 billion Creation of 9 Trans-African Highways Rail $14.8 billion Rail networks to receive bulk of investment Ports $3.5 billion Ports development to decrease bottlenecks Source: World Bank and Frost and Sullivan analysis *based on active projects in 2011 7
  • 8. Infrastructure Africa: Market Outlook Rail infrastructure is the fastest growing segment of transport infrastructure Morocco African $14.67B 2 Active rail projects amount Planned 1 governments are to $48 billion Ongoing trying hard to reduce the burden Ethiopia on road $3.70B infrastructure 5 1 7 1 3 7 Ghana This will reduce Kenya $6.40B 3 transport costs and 1 $405.5M Nigeria help open up land- Zambia $6.40B locked economies $93.8 M 3 Tanzania Namibia $5.37B $2.68B 2 4 2 1 Mozambique $4.8 billion to be Multi-Country Mega Projects 1 3 $3.66B invested in public Botswana-Mozambique- transport $7.0B Zimbabwe infrastructure: Isaka-Keza-Kigali $1.9B Botswana (Tanzania-Rwanda) Lagos, Abuja, Maputo, Addis $1.40B Namibia-Botswana $1.3B Source: Frost and Sullivan analysis *based on active projects in 2011 8
  • 9. Infrastructure Africa: Market Outlook $94 billion will be invested in the energy sector in Sub-Saharan Africa Sub-Saharan Africa generation capacity is 68 GW - equal to Spain in Europe South Africa produces 40 GW alone Mining industry drives growth in installed capacity 5.0 GW 18.0 GW Will continue to be the major 2.0 GW 3.6 GW energy source to 2020 2.0 GW 3.3 GW 0.4 GW 0.5 GW 4.2 GW $57.7 billion (12 GW) to be 6.3 GW developed in renewable 2009 52.6 GW energies by 2020 across Africa 2020 111.6 GW 1.7 GW 2.0 GW 5.2 GW 1.1 GW Governments to encourage 0.7 GW involvement of private 0.1 GW 2.2 GW sector 0.4 GW 65.4 GW 2009 2020 10,000 km of transmission lines will be used to exploit 40.0 GW larger scale, cheaper energy Source: Frost and Sullivan analysis *based on active projects in 2011 sources 9
  • 10. Infrastructure Africa: Market Outlook $15 billion will be invested in water and wastewater infrastructure in Sub-Saharan Africa Water projects greatly outnumber wastewater projects in Africa Access to modern infrastructure: 1/0 Piped water Flushing toilet 20/0 Urban 39% Urban 25% 7/2 15/7 Rural 5% Rural 2% 10/1 12/6 Legend Number of WT/ projects WWT 13/0 Large number of projects, 6/2 10/0 valued at less than $100 million % of Greenfield projects <20% 9/3 4/2 20%-40% 40%-60% Millennium Development Goals 60%-70% are key driver 66/13 Number of projects >70% Majority of funding is donor Rehabilitation, upgrading and sourced improvement projects characterise development 10
  • 11. Infrastructure Africa: Market Outlook Snapshot of Mega-Infrastructure Projects across the Continent $6.3 billion 2,000 MW Wind and $6 billion 2,000 MW Solar Power Plan Development of a new deep sea port $7 billion Rehabilitation of 60,000km of urban and rural roads $10 billion 200,000 low cost houses $2.5 billion $1.2 billion 1600 MW 1,500 km railway line linking hydropower station Namibia to Botswana $14.5 billion Worlds 3rd $7 billion largest 1,100 km railway linking supercritical Botswana to Mozambique Source: Frost and Sullivan analysis coal fired plant via Zimbabwe *based on active projects in 2011 11