Financing of Infrastructure

This case study examines the challenges and mechanisms for financing infrastructure in Africa, with a specific focus on the Southern African Development Community (SADC). It analyzes the shift from official development assistance and commercial bank lending toward alternative funding modalities, including Public-Private Partnerships (PPPs), infrastructure bonds, sovereign wealth funds, and diaspora-led financing, to meet the massive capital requirements of regional development plans.

• The Southern African Development Community (SADC) Regional Infrastructure Development Master Plan (RIDMP), adopted in August 2012, requires an estimated $500 billion in capital, with $100 billion expected from private-sector sources for implementation between 2014 and 2027.
• Infrastructure costs in sub-Saharan Africa are significantly higher than in other developing countries, with power tariffs up to 460% more expensive, road freight tariffs 350% higher, and water tariffs up to 1,093% higher.
• Project preparation in Africa is costly and often insufficient, with the OECD estimating that preparation costs average between 5% and 10% of total project costs.
• Private investment in African infrastructure has lagged behind other regions; between 1990 and 2011, only 10% of global private investment flowed to infrastructure in Africa, compared to 40% in Latin America.
• Financial markets in Southern Africa are underdeveloped, characterized by a lack of medium- to long-term lending and weak regulatory frameworks, with the exception of South Africa.
• China provides infrastructure funding to sub-Saharan African countries through low-interest, concessional loans and oil-for-infrastructure deals via the China Export–Import Bank and China Development Bank, often without the conditionality required by Western banks.
• There is significant untapped potential in diaspora financing for sub-Saharan Africa, with estimates suggesting countries could raise $3 billion by reducing remittance costs, $5–10 billion through diaspora bonds, and $17 billion by securitising future remittances.

APA

Wentworth, L. (2013). Financing of Infrastructure. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_infr_wentworth_financing_20131213.pdf

Chicago

Wentworth, Lesley. Financing of Infrastructure. South African Institute of International Affairs, 2013. https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_infr_wentworth_financing_20131213.pdf.

Wikipedia

{{cite report |last1=Wentworth |first1=Lesley |title=Financing of Infrastructure |publisher=South African Institute of International Affairs |date=August 2013 |url=https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_infr_wentworth_financing_20131213.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wentworth2013financing, author = {Wentworth, Lesley}, title = {{Financing of Infrastructure}}, institution = {South African Institute of International Affairs}, year = {2013}, month = aug, url = {https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_infr_wentworth_financing_20131213.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }