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17th April 2018

Unlocking infrastructure investment in frontier markets

Beginning the next stage of PIDG's evolution

The Private Infrastructure Development Group (PIDG) has a unique structure that adapts to fill market gaps and create development impact in the world’s lowest-income countries. It is a fundamentally innovative organisation that mobilises private sector infrastructure investment in frontier and emerging markets in Africa and Asia.

Demand for infrastructure is growing globally, but the current investment shortfall has been estimated at US$1tn per annum. With a lack of investor-ready projects acting as a major bottleneck to unlocking finance in the countries where we work, PIDG provides solutions across the project development cycle. PIDG companies TAF, DevCo, InfraCo Africa and InfraCo Asia provide technical assistance and early-stage development expertise and funding, while EAIF and GuarantCo provide long-term hard and local currency finance respectively.

Many of PIDG’s investments support first-of-a-kind or landmark ‘greenfield’ infrastructure. Working to the highest international standards, we bring together developers, governments and private sector financiers to overcome the financial, technical, regulatory and environmental challenges.

Our pioneering approach has seen significant success. PIDG is now a sizeable infrastructure finance organisation, drawing on $2.4bn of funding and with a track record of supporting 154 infrastructure projects, mobilising $21.3bn from the private sector and benefiting an estimated 222m people. For every $1 PIDG invests, we mobilise $17 of private sector investment.

Evolving to deliver greater impact

We are now set to begin the next stage of PIDG’s evolution.

Since 2002 each of our companies has been established to meet specific infrastructure finance needs, but we can be even more effective as part of a combined offer. Projects such as the transformative Kalangala Infrastructure Services, Kigali Bulk Water and Vietnam’s Coc San hydro have demonstrated the capability of PIDG companies to invest at different stages of the development cycle, supporting projects to unlock investment opportunities for commercial finance.

PIDG will now formalise and embed this collaborative approach through a new governance structure; with a single board and committees to oversee development and investment priorities across the whole organisation. This new structure aligns some of our operations centrally to improve efficiency, maximise our impact and provide a common point of entry for investors and developers.

Demonstrating what’s possible

PIDG’s new structure will allow us to scale up our pioneering approach.

InfraCo Africa has provided pioneering early-stage investment for Ethiopia’s first geothermal IPP, which could mobilise up to $2bn in foreign direct investment. InfraCo Asia has sold its shares in two Pakistani wind farms it helped develop to the private sector. EAIF is rapidly becoming a well-known mandated lead arranger for project finance and has recently secured first-of-a-kind commercial investment from European insurer Allianz. Finally, in Nigeria, GuarantCo’s work with InfraCredit Nigeria, supported by TAF, has unlocked infrastructure investment from domestic pension and insurance funds for the first time.

In the coming years, PIDG companies will continue to make innovative investments, pushing the boundaries of what is possible for infrastructure finance in emerging markets. We have the funding and capability to catalyse greater private-sector participation and deliver investor-ready infrastructure where it is most needed.

Please contact us if you have a project that would benefit from our support. Together we can transform infrastructure in low-income countries from concept to reality.

 

This joint blog was signed by:

Andy Bainbridge, Chair, PIDG Ltd

Philippe Valahu, CEO, PIDG Ltd

James Leigland, Technical Advisor, PIDG Technical Assistance Facility (TAF)

Emmanuel Nyirinkindi, IFC Manager for DevCo

Alex Katon, Executive Director, InfraCo Africa

Allard Nooy, CEO, InfraCo Asia

Emilio Cattaneo, Executive Director, Emerging Africa Infrastructure Fund (EAIF)

Lasitha Perera, CEO, GuarantCo