How can Africa's infrastructure become more resilient to climate change? A question that has become imperative as extreme climatic events such as floods, droughts and desertification multiply across many African countries, increasing the vulnerability of their already fragile infrastructure.
The increasing severity of these events underscores the urgency of finding innovative and sustainable solutions. With this goal in mind, the African Legal Support Facility (the “ALSF”) in partnership with the African Development Bank (AfDB) and the United Nations Economic Commissions for Africa (UNECA) organised the inaugural Africa Public-Private Partnerships (PPP) Units Forum (the “Forum”) in Nairobi, Kenya from 17-18 September 2024.
Making PPPs drivers of climate resilience
The inaugural edition of the Forum brought together the heads PPP Units across the Continent together with high-level industry experts and development partners to facilitate a conversation on the integration of climate resilience principles into large scale PPP/infrastructure projects. The current climate resilience methodologies being applied, the role of PPP Units and related stakeholders in the climate change mitigation agenda as well as supporting legal and institutional frameworks were some of the key discussion points in understanding the realities of climate change aspects in PPP projects on the Continent.
In his opening remarks, Mr. Olivier Pognon, Director and CEO of the ALSF, highlighted the obstacles to making climate-resilient projects bankable and called for more effective partnerships to support initiatives that respond to increasingly challenging climate realities. He also emphasized ALSF’s sixteen-year dedication to assisting African governments in creating well-structured PPPs to tackle the Continent's infrastructure challenges through providing both advisory and capacity building support.
Among the participants in attendance were representatives from over thirty PPP units across the Continent, international organisations such as the AfDB, UNECA, the Global Infrastructure Facility (GIF), the Trade and Development Bank (TDB), the Private Infrastructure Development Group (PIDG) and The International Finance Corporation (IFC).
Through a bottom-up approach, majorly comprised of working sessions, the Forum explored how PPP units can integrate climate resilience principles into the entire PPP project cycle right from project identification to contract management. Several PPP units highlighted their challenges in attempting to introduce climate resilience principles into their first-generation PPPs. It was clear from the discussions that the groundwork of updating national development agendas, climate related laws, policies and regulatory frameworks had been done with the next step being the actual structuring and implementation of climate resilient PPP projects.
Collaboration between governments and the private sector was noted as pertinent in matters of accessing financing options for climate resilient PPP projects, accessibility to internationally developed climate assessment tools and capacity building opportunities. Climate-resilient projects often come with significant financial challenges, necessitating creative financing solutions to bring them to fruition. The Forum offered a platform for development partners to explore innovative financing mechanisms available to PPP units and governments.
Concrete areas for improvement to build more sustainable PPPs
At the end of the discussions, several recommendations emerged on how to enhance the bankability of climate-resilient infrastructure PPPs. The key recommendation was the need to integrate climate resilience principles at the very beginning of PPP projects including consideration of climate action at both concept and feasibility study stage. Other notable recommendations included prioritizing people-first principles alongside value for money, engaging in dynamic and flexible negotiations of climate-resilient PPP clauses within project agreements, and modifying regulatory frameworks to draw in greater investment. Additionally, implementing appropriate measures like early risk assessments and incorporating them into PPP contracts was suggested.
Recognizing the significance of mobilizing financial resources, participants highlighted the potential of climate finance mechanisms to accelerate and expand African countries' efforts to adapt to climate change.
The African Legal Support Facility: A central player in advancing PPPs in Africa
The ALSF, whose mission is to provide legal assistance to African countries in complex commercial transactions while enhancing their capacity to negotiate fairer and more sustainable contracts, has positioned itself as a key player in the development of public-private partnerships across Africa since its creation by the African Development Bank (AfDB) in 2008. By offering its legal and financial expertise to overcome obstacles to the affordability of projects, facilitating access to climate risk assessment tools, and promoting more flexible negotiation frameworks, the ALSF helps strengthen African states' capacity to negotiate projects aligned with sustainability goals.
