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EU Technical Assistance to the African Union • Infrastructure Support Mechanism (ISM)
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Streamlining and standardization of Implementation Procedures: PIDA Implementation Guidelines

The “Technical Assistance to The African Union – Infrastructure Support Mechanism” team spearheaded the development Guidelines on how to use all PIDA PAP2 instruments in a coordinated way to maximize the impact of the African Union Development Agency – New Partnership for Africa’s Development (AUDA NEPAD) on successful project development. This includes: Service Delivery Mechanism (SDM), CBN (Continental Business Network), PIDA Information System, Quality Labelling, PIDA Job Creation Toolkit and CBN 5% Agenda.

The objective of these PIDA implementation guidelines is to serve as a quick introduction for persons and institutions new to PIDA PAP2 to participate and maximise the value of PIDA PAP2 for themselves and the institutions they represent. The guidelines provide enough information to understand the institutional framework and the structure of AUDA-NEPAD (African Union Development Agency – New Partnership for Africa Development), and to effectively navigate through the broader PIDA ecosystem of continental frameworks, policies, strategies, methodologies and tools developed over the last decade, in order to better apply PIDA strategic documents and PIDA tools for effective implementation of PIDA infrastructure projects.

PIDA Financing Strategy and its implementation

The “Technical Assistance to The African Union – Infrastructure Support Mechanism” (EU ISM TA) contributed to the critical review of the PIDA Financing Strategy, but most importantly, its deployment by increasing the dialogue between Development Finance Institutions (DFIs), Commercial Banks and AUDA NEPAD for the mobilization of resources for Project preparation and Project finance. This includes the showcase of most advanced PIDA projects to DFIs, as well as the presentation by DFIs and Commercial Banks of their financing, grants and risk mitigation instruments to Projects owners and institutions.

Transaction Advisory Capacity at AUDA NEPAD

After the adoption of the PIDA PAP2 priority projects at the African Union summit in February 2021, the projects were handed over by African Union Commission to AUDA NEPAD which has the mandate for implementation.

In the context of AUDA NEPAD, implementation means mainly transaction advisory support which include several interventions:

  • Preparation of project fiche to present projects to potential investors and donors
  • Pitching for Project preparation funding to carry out feasibility studies,
  • Providing assistance to Member states, Project owners, and Regional Economic Communities for project structuring,
  • Supporting more advanced projects towards financial close leading to procurement and construction managed at national and regional level.

PIDA PAP2 process

In 2020 the core focus of the Infrastructure Support Mechanism was to assist the African Union Commission and AUDA to implement the PIDA PAP2 process, starting from training workshops on PIDA PAP2 selection criteria in February March 2020 to supporting the organization of 30 Webinars from April to July 2020 through the sectoral Non-Key Experts to assist project owners to submit projects, and to assist the PIDA Task force to analyse and evaluate the projects. The estimation of jobs created by PIDA projects was carried out by the ISM TA Non-Key Expert using the PIDA job creation toolkit. This was followed by the groundwork for upgrading the Job creation tool kits to include new subsectors and benchmarking with PIDA projects.

The ISM Key Experts and Sectoral Non-Key Experts were also active in supporting the PIDA Institutions in developing the PIDA strategic documents under the guidance of the task force: Implementation strategy by AUDA NEPAD, financing strategy by the African Development Bank (AfDB) and PIDA Partnership strategy by the United Nation Economic Commission for Africa (UNECA).

Further readings:

In the recovery from the pandemic, mobilization of private sector finance will be key to constraints on Domestic resources.

PPP Training for PIDA PAP2 Stakeholders

The “Technical Assistance to The African Union – Infrastructure Support Mechanism” team is contributing to increase the capacity for Private-Public Partnership (PPP) transactions by providing PPP Training to Infrastructure focal points from national governments, regional and continental institutions. More than 200 people registered for the French version and the English version of the training, that have been adapted to the different need of francophone and anglophone countries.

The AUDA-NEPAD Transactional Advisor coordinated two tracks of three modules each, four sessions per module, lasting for 12 weeks, which are being delivered from September 2021 to January 2022. The training delivery was online by world class PPP experts in African infrastructure.

Module I provides the necessary training to prepare participants for the APMG PPP certification. For info, The Certification Program aims to foster a common minimum denominator level of knowledge and understanding amongst individuals working on PPPs or those interested in learning about PPPs, regardless of discipline or sector. Module II focuses on the PPP implementation from the administrative point of view, showcasing African PPP programmes and how they have been implemented. Module III focuses on PPP Project Finance and Structuring.

Improve management of project pipeline data: VPIC Enhancement study

The “Technical Assistance to The African Union – Infrastructure Support Mechanism” contributed to Improving data management of PIDA PAP 2 projects through a study on the usability of the Virtual PIDA Information Centre (VPIC) platform and its source data the African Information Database (AID). The recommendations will lead to updated information, better relevance data and increased accuracy of project data.

Preparation of Project Fiche and Projects Information Memorandums

This support to AUDA NEPAD stems from the need to extract and condense data in a format compatible with the requirements of investors and Development Finance Institutions (DFIs), and Project Preparation Facilities. The Technical Assistance has specifically introduced a 3 lenses analysis of assessing PIDA infrastructure projects based on their potential to attract climate finance, private sector finance and government finance. The objective of this assessment is to orient projects to the most attractive sources based on the following project characteristics:

  • The climate lens specifically assesses the potential of the project for mitigation based on usage and scalability, and its value in contributing to adaptation benefits leading to climate resilient infrastructure;
  • The Industrialisation and trade lens assesses the potential of the infrastructure project to enable and support industrial, value addition, services and trade activities and reinforce the case for Private sector participation;
  • The economic recovery jobs and resilience lens assesses the potential of the project to lead to develop local value chains, support livelihoods leading to recovery, growth and resilience.

The outputs from the 3 lenses analysis is summarised in the dashboard section of PIDA project fiches to enable DFIs to quickly identify the key projects which matches their criteria.

Increasing Project pipeline of bankable projects

The “Technical Assistance to The African Union – Infrastructure Support Mechanism” provided technical support through Non-Key Experts in Energy, Water, Transport and ICT Sector to screen PIDA PAP2 projects and assist project owners and Regional Economic Communities during the submission process and the task force during the screening and evaluation process. One of the outputs has been Sectorial End reports seminars for AUDA NEPAD Economic Integration division about pipeline screening.

The Three lenses approach proposed by the TA aims at facilitating bankability of projects through a three-dimensional analysis of projects aligned to potential sources of funding.

PIDA PAP2 value proposition: Decreasing risk and increasing project value

Two sessions have been planned at the 7th PIDA week (initially planned for December 2021 and postponed to 2022). The theme chosen is: “PIDA PAP2 value proposition- Decreasing risk and increasing project value”. This will be carried out by mobilizing the EU External Investment Plan (EU-EIP) financial instrument through EU Based DFIs. For info, the EIP is an EU initiative to support public and private investment in countries neighboring the EU and in Africa with the goals of creating jobs, boosting economies – and offering people a brighter future.

A bi directional engagement is proposed for DFIs to present their specific financial instruments and schemes relevant for PIDA infrastructure sectors, and the types of projects they are interested in. The PIDA PAP2 portfolio and specific PIDA project fiches will be presented to DFIs with a focus on the project preparation and project funding phase.

This will be carried out in 3 steps:

  • An engagement with Development Finance Institutions before 7thPIDA week will serve as a preparatory session.
  • The actual 2 sessions during PIDA week for the bidirectional interaction aim at explaining the evaluation criteria and facilities proposed by DFIs, as well as presenting the PIDA PAP2 portfolio and specific project fiches having reached a higher level of readiness to the DFIs.
  • There will also be follow up bilateral sessions for more in-depth discussions between project owners, AUDA-NEPAD and DFIs eventually leading to mobilization of blended finance (including EU EIP facilities) for PIDA PAP2 projects.