Infrastructure in Africa

“A Snapshot of Key Infrastructure Development Plans on

the Continent”

Presenter

Kudzanayi Bangure

Programme Manager – Infrastructure Division

2

Functional Expertise

• Experience in strategy consulting and market research, which include over 30 significant market research and

growth consulting projects. Particular expertise in:

− Local and global consulting engagements with experience in the following

− Commercial due diligence analysis

− Strategic analysis of new markets

− Development of market entry strategies

− Geographic expansion strategies

− Analysis of emerging markets

− Opportunity analysis

− Analysis of Infrastructure development in Sub-Saharan Africa

Industry Expertise

Long-standing working relationships with leading industry participants’ Senior Executives.

Experience base covering a broad range of sectors which include the following

African Infrastructure (Energy, Telecommunications, Transportation and Water Infrastructure)

Built environment (Construction, Green Buildings)

Building Technologies (Lighting, HVAC, Security, BMS, Facilities Management)

Automotive & Transportation

What I bring to the Team

• Strategic Thinking

• Project and Team Management

• Client and Relationship Management

• Market Analysis

• Competitor Analysis

• Customer Analysis

Education

• Bachelor of Commerce in Economics and Information Systems from Rhodes University

• Honours in Financial Analysis & Portfolio Management from the University of Cape Town

Kudzanayi Bangure

Kudzanayi BangureProgramme Manager

African Infrastructure,

Automotive & Transportation

Frost & Sullivan Africa

South Africa, Cape Town

• Econometric Analysis

• Economic Modelling

• Financial Analysis & Modelling

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Contents

Section Slide Number

Africa Infrastructure Overview 3

Road Infrastructure Analysis 7

Rail Infrastructure Analysis 8

Energy Infrastructure Analysis 9

Mega Infrastructure Projects 10

Conclusions 12

Contact Details 14

Africa – Key Infrastructure Statistics

$604 billionAnnual spending

needed for the next five years to

upgrade, rehabilitate and expand Africa’s

infrastructure

$440 billionIs the current spending on

infrastructure development in Sub-

Saharan Africa

% of investment in Sub-Saharan

Africa on transport

infrastructure

31%

70%In land-locked

countries, transport accounts for 70%

Is the number of

countries in Africa which have regular

power outages

30

South Africa is currently

investing $145 billion in

infrastructure

$145

billion

50 years It will take 50 years for most

countries in Africa to reach

universal access to modern

infrastructure

50%Infrastructure

development has been responsible

for more than half of Africa’s

improved economic

performance

21%% of

investment in Sub-Saharan

Africa on energy and

power infrastructure

of the value of exported

goods

*based on active projects in 2011

Source: World Bank and Frost and

Sullivan analysis

5

Infrastructure Africa: Market Outlook

Infrastructure Development in Sub-Saharan Africa

< 0.5

0.5 – 1.0

1.0 – 5.0

5.0 – 10.0

0.0 – 15.0

15.0

Transport

$136 billion

Energy

$93 billion

Telecoms

$17 billionWater

$15 billionSocial

$43 billion

Legend:

Investment ($ billion)

Total investment amounts to

$440 billion

Number of high value

projects, many valued

>$1 billion

Most projects

valued < $100

million

*based on active projects in 2011

Source: Frost and Sullivan analysis

6

0 20 40 60 80 100 120 140

Transport

Energy

Telecoms

Water

Social

Investment ($ billion)

Se

cto

r

South Africa Nigeria Mozambique Tanzania Ghana

Zambia Botswana Namibia Uganda Kenya

Infrastructure Africa: Market Outlook

$440 billion is being invested in infrastructure development in Sub-

Saharan Africa

Nigeria and Mozambique

account for 8.9% and

7.7% of infrastructure

investment

South Africa is the leader in infrastructure development on the continent, investing $145 billion

$230 billion will be invested in the

transport and energy and power sectors

(Includes housing, hospital

and school construction)

*based on active projects in 2011

Source: Frost and Sullivan analysis

7

Infrastructure Africa: Market Outlook

What impacts infrastructure development on the continent?

Drivers

Restraints

Millennium

Development

Goal targets

Expansion of

the mining

industry

Increasing

private sector

participation

Corruption and

mal-

administration

Reliance on

private sector

for funding

Poor power

supply capacity, restricting the

growth of economies

Expansion of the mining industry and increased participation of the private sector are the key drivers for infrastructure development

Challenges

Project funds have to be secured from the private

sector as African countries do not have sufficient

public funds to support infrastructure development

Skills shortage on the continent results in

engineers and other skilled labour being imported for

projects, increasing costs

Political Instability in the long term increases

the risk of future projects. This challenge is

particularly pertinent in a country like Nigeria.

Source: Frost and Sullivan analysis

8

Infrastructure Africa: Market Outlook

$28 billion will be invested in transport corridor development in Sub-

Saharan Africa

Road

Rail

Ports

$9.2 billion

$14.8 billion

$3.5 billion

Investment will

result in greater

regional integration

and significantly

increased intra-

African trade

Roads in good condition

Western 72%

Central 49%

Eastern 82%

Southern 100%

Container dwell times (International standard: 7 days)

Western 11-30 days

Eastern 5-28 days

Southern 4-8 days

Freight transport by rail

Western 11%

Central 2%

Eastern 2%

Southern 85%

Existing road networks will be rehabilitated and expanded

to create nine Trans-African Highways

Rail networks will be extended and upgraded to

complement the Trans-African highways

Capacity building at ports will decrease bottlenecks and

support growth in trade and industry

Ten transport corridors are being developed across the

region to improve road and rail networks and increase port

capacity

Current state of transport infrastructure:

*based on active projects in 2011

Source: World Bank and Frost and Sullivan analysis

9

Infrastructure Africa: Market Outlook

Rail infrastructure is the fastest growing segment of transport

infrastructure

Ethiopia

$3.70B

Kenya

$405.5M

Tanzania

$5.37B

Mozambique

$3.66B

Botswana

$1.40B

Zambia

$93.8 M

Nigeria

$6.40B

Ghana

$6.40B

Namibia

$2.68B

Morocco

$14.67BActive rail projects amount

to $48 billion

Number of

planned projects2

1

5

1

1

77

3

31

3

41

1

2

2

3Multi-Country Mega Projects

Botswana-Mozambique-

Zimbabwe$7.0B

Isaka-Keza-Kigali

(Tanzania-Rwanda)$1.9B

Namibia-Botswana $1.3B

Passenger rail

services on the rise...

$4.8 billion is to be invested in

metropolitan light rail

Lagos, Abuja, Maputo and

Addis Ababa are all investing in

urban passenger services

aimed at easing congestion

and road traffic pressures in

heavily built up metropolitan

areas

African governments are

shifting focus towards

large-scale investments

in rail infrastructure in

order to ease the burden

on road networksImproved rail services will

reduce trade costs and

increase access to Africa’s

huge population

*based on active projects in 2011

Source: Frost and Sullivan analysis

Number of

ongoing projects

10

Infrastructure Africa: Market Outlook

$94 billion will be invested in the energy sector in Sub-Saharan

Africa

2009 52.6 GW2020 111.6 GW

Mining industry drives growth in installed capacity

2.0 GW

5.0 GW

3.3 GW

18.0 GW

0.4 GW

2.0 GW3.6 GW

0.5 GW

1.7 GW

4.2 GW

2.0 GW

6.3 GW

2.2 GW

5.2 GW

0.4 GW

1.1 GW

0.1 GW

0.7 GW

40.0 GW

65.4 GW2009

2015

The generation capacity of Sub-Saharan Africa is 68 GW, equal to Spain in EuropeSouth Africa alone produces 40 GW Because little development has occurred since the 1980’s, 30 countries in the region

suffer from chronic power outages

$57.7 billion (12 GW) to be

developed in renewable

energies by 2020 across Africa

10,000 km of transmission

lines will be used to exploit

larger scale, cheaper energy

sources

Will continue to be the major

energy source to 2020

Governments to encourage

involvement of private

sector

*based on active projects in 2011

Source: Frost and Sullivan analysis

11

Infrastructure Africa: Market Outlook

$15 billion will be invested in water and wastewater infrastructure in

Sub-Saharan Africa

Legend

Number of

projects

WT/

WWT

20/0

1/0

10/1

13/0

9/3

66/13

4/2

10/06/2

7/2 15/7

12/6

Number of projects%

of

Gre

en

fie

ld p

roje

cts

<20%

20%-40%

40%-60%

60%-70%

>70%

$16.5 billion is required annually to meet the infrastructure gap

Less than $1.0 billion is spent on developing infrastructure

Rehabilitation, upgrading and

improvement projects characterise

development

Water supply has been prioritised across the

continent

Large number of projects, valued at less

than $100 million

Millennium Development Goals are the key

driver for development in the sector

Donor organisations fund the majority of

projects in the sector

Piped water

Urban 39%

Rural 5%

Flushing toilet

Urban 25%

Rural 2%

Access to modern infrastructure:

*based on active projects in 2011

Source: World Bank and Frost and Sullivan analysis

12

Infrastructure Africa: Market Outlook

Snapshot of Mega-Infrastructure Projects across the

Continent

$2.5 billion

1600 MW

hydropower station

$10 billion

200,000 low

cost houses

$7 billion

1,100 km railway linking

Botswana to Mozambique

via Zimbabwe

$1.2 billion

1,500 km railway line linking

Namibia to Botswana

$14.5 billion

World’s 3rd

largest

supercritical

coal fired plant

$6.3 billion

2,000 MW Wind and

2,000 MW Solar Power Plan

$7 billion

Rehabilitation of

60,000km of urban

and rural roads

$6 billion

Development of a

new deep sea port

*based on active projects in 2011

Source: Frost and Sullivan analysis

13

Infrastructure Africa: Market Outlook

Where will Africa be in 2020?

Transport corridors will drive trade, economic growth

and regional integration

Regional Power Pools will ensure security of supply

and support economic growth

Urbanisation in Africa will increase by 27% between 2010

and 2020, with Africa accounting for 15% of the world’s

urban population

14

Infrastructure Africa: Market Outlook

Bottom up approach used to create Frost & Sullivan’s Infrastructure

Trackers

Project Level Sector LevelCountry

Level

Regional

Level

A bottom-up approach is used to

collect project data across ten

sectors for each infrastructure

tracker.

Infrastructure Tracker Coverage

complete

Snapshot of Project Data Slide

14 trackers complete

Project Phase

Project Value

Start and End Dates

Stakeholders

Financiers

Road

Rail

Ports

Airports

Energy and Power

Telecommunications

Water and Wastewater

Housing

Healthcare

Education

Project Data Identified: Sector Coverage:

Project level data for ongoing and planned projects are identified for

each infrastructure sector

Each sector is analysed and compared based on the level of investment

and type of investment (public or private), providing a country level view

Countries can be compared, providing a regional outlook

15

Guillaume de BassompierreBusiness Development Director

Tel: +27 21 680 3282Cell: +27 71 684 0011Fax: +27 86 651 9430E mail: Guillaume.Bassompierre@frost.com

Kudzanayi BangureProgramme Manager - Infrastructure

Tel: +27 21 680 3207Cell: +27 76 905 1909Fax: +27 86 651 9430E mail: Kudzanayi.bangure@frost.com

Contact details