chapter  22
10 Pages

Light Rail – The Issues

ByRobert Lewin, Investec

This chapter explores the role for privatization in unleashing the potential for infrastructure financings and tries to navigate the trend of newly formed regulators and the likely impact this will have on project finance in Africa over the next decade. It also explores the importance of navigating the regulatory process; the realization that private money is required needs to be accompanied by judicious deployment. The chapter focuses on the general dynamics of deal structuring in Africa including the use of Development Finance Institutions (DFI), mini perm structures and political risk insurance. It defines an exploration of liquidity. Just as the continent suffers frequent droughts despite its copious rainfall, financial liquidity is abundant in the form of the DFIs and World Bank funding but to access that liquidity requires extensive planning and structuring. Privatization processes, be they unbundling, performance controls, audits and revenue models to address under-collection or distribution losses, need to be undertaken well before private capital is deployed.