By Dr. Mohamed H’MIDOUCHE
Africa is not lacking in ambitions, needs, or project ideas. It often lacks projects that are sufficiently prepared, structured, bankable, and de-risked to attract public, concessional, private, and institutional financing. The real challenge is to transform the continent’s priorities — ports, airports, toll roads, power plants, desalination plants, logistics corridors, industrial platforms, or digital infrastructure — into truly financeable projects. This is why Project Preparation Facilities (PPFs) must become a pillar of the new African financial architecture.
One of the paradoxes of African development lies in this contradiction: the continent has massive infrastructure needs, attracts the interest of development banks, institutional investors, sovereign funds, financial markets, and international partners, but continues to lack mature projects to absorb this financing. It is not enough for a project to be necessary to be financeable. It is not enough for it to be politically prioritized to become attractive. Between the project idea and financial closing, there is a critical zone: that of preparation, structuring, de-risking, and credibility.
It is in this zone that Africa loses time, opportunities, and sometimes its negotiating power. Poorly prepared projects delay decisions, discourage investors, weaken the position of states, and increase perceived risks. Conversely, a well-prepared project clarifies needs, stabilizes the financial model, anticipates environmental and social constraints, specifies the legal framework, reassures investors, and allows states to negotiate from a position of strength.
Bankability is not decreed. It is built.
Prepare, make bankable, de-risk
Africa talks a lot about mobilizing financing. It talks less about financing preparation. Yet, this is often where the future of a project is decided. Preparing a large project requires technical, economic, financial, environmental, social, and legal feasibility studies. Costs must be evaluated, revenues simulated, risks analyzed, contractual structure defined, guarantees identified, stakeholders consulted, bids prepared, and approvals secured.
All of this has a cost, even before the project generates any revenue. The real question is simple: who finances bankability before the project becomes financeable?
De-risking is not a technical luxury. It is a prerequisite for capital entry. What often deters investors is not the lack of need, but the accumulation of unidentified, unallocated, or uncovered risks: political, regulatory, land, demand, currency, construction, environmental, social, contractual, or payment risks.
This is precisely where PPFs become strategic. Their role is not only to finance studies. They must identify risks, prioritize them, distribute them among parties, propose appropriate guarantees, structure contracts, clarify public and private obligations, and make the project understandable to banks, investors, and insurers. A de-risked project is not a risk-free project. It is a project whose risks are known, measured, allocated, and partially covered. This clarification reduces the cost of capital, shortens negotiations, improves trust, and increases the chances of reaching financial closing.
Without de-risking, projects remain intentions. With de-risking, they become financeable assets.
Mobilizing fragmented domestic resources
The central question is that of sustainable financing for PPFs. Africa is not starting from scratch. Resources often already exist, but they are dispersed, fragmented, and rarely directed towards the preparation of structuring projects. The challenge is not only to find new financing but to build a domestic architecture for mobilizing resources combining budgetary resources, public and private national banks, national and regional development banks, sovereign funds, deposit funds, pension funds, social security organizations, insurance companies, profitable public enterprises, concession companies, regulated sectors, technical and financial partners, climate funds, and multilateral institutions.
National banks should be involved in this dynamic, not only as future co-financiers but also as contributors to preparation. The better prepared the projects are, the deeper, credible, and profitable the project financing market becomes. Institutional investors — pension funds, social security, insurance companies, pension funds — can also play a role, provided their contribution is cautious, regulated, and in line with their fiduciary mandate. The goal is not to put social savings at risk but to make it contribute, through secure mechanisms, to the future creation of national wealth.
Profitable public enterprises are another avenue. In energy, mining, telecommunications, ports, transportation, or water, some generate positive results. A controlled fraction of their dividends or surpluses could feed a national project preparation fund. This logic could also apply, with caution and transparency, to certain activities heavily regulated by the state: games, national lotteries, tobacco, or other sectors benefiting from licenses, concessions, or regulated market situations. The goal is not to levy indiscriminately everywhere but to intelligently organize resources already present in the national economy.
Funds exist. They are fragmented. What is missing is architecture, governance, and political will.
The leverage effect of PPFs
The interest of PPFs is also measured by their financial leverage effect. It is not just about financing studies but unlocking much larger financing downstream.
The case of the NEPAD Infrastructure Project Preparation Facility, hosted by the African Development Bank, is illustrative: since its creation, it has supported 113 regional projects, committed over $124 million to preparation, and contributed to mobilizing over $13 billion in investments. This represents an indicative leverage effect exceeding 100 dollars mobilized for every $1 invested in preparation.
Europe confirms this logic with JASPERS, a European Investment Bank assistance program that supports public authorities in preparing projects for EU-funded investments. Latin America also offers a useful reference: CAF has developed pre-investment instruments to improve the quality of infrastructure projects and facilitate their financing.
These examples should be interpreted with caution, as the leverage effect varies depending on sectors, institutional quality, regulatory framework, and project maturity. But they demonstrate an essential reality: financing preparation is not an accessory expense. It is often one of the most profitable investments in the development financing chain.
A financial recycling mechanism should also be provided. When a project prepared with a PPF reaches financial closing, a portion of the preparation costs could be reimbursed to the fund by the project vehicle, concessionaire, private investor, or benefiting public authority. The PPF would thus become less dependent on subsidies and more sustainable.
Governance and action priorities
To be effective, PPFs should not become new bureaucratic structures. A PPF should not be just a budget line or an additional administrative department. It should take the form of an autonomous national fund for project preparation and de-risking, with professional governance, financial autonomy, and a clear mandate: transforming national priorities into bankable projects.
Its oversight should ideally involve the Ministry of Economy and Finance and the Ministry of Planning, Development, or National Economy. The former would bring financial discipline, budget sustainability, public guarantees, and investor relations. The latter would ensure coherence with national, sectoral, and territorial priorities.
Ten priorities are essential: making project preparation a national priority; creating dedicated funds; ensuring professional governance; mobilizing fragmented domestic resources; involving banks, institutional investors, and profitable public enterprises; systematically integrating de-risking; recycling a portion of preparation costs; publishing credible pipelines; measuring performance by effectively mobilized financing; and making preparation an instrument of economic sovereignty.
The PPF should not be a political window or an administrative cash register. It should be the national workshop where public priorities become financeable projects.
Conclusion
Strengthening PPFs is strengthening the economic sovereignty of African states. This does not mean rejecting international expertise. It means being able to mobilize, direct, and negotiate it based on a unique vision.
Making Project Preparation Facilities a strategic priority is not about funding additional bureaucracy. It is about funding the birth of bankable projects. It is investing in the crucial transition between vision and execution, between need and financing, between political priority and financial closing.
The challenge is no longer just about seeking financing for Africa. The challenge is to enable Africa to create financeable projects itself.
One dollar invested in preparation can unlock tens, sometimes over a hundred dollars of investments. But the real issue is not just preparing the projects: it is de-risking them enough for public, private, concessional, and institutional capital to engage with confidence.
It is under these conditions that the continent’s infrastructure will cease to be recurrent promises and become effective, productive, and transformative investments.
Dr. Mohamed H’MIDOUCHE
International expert in development, African finance, and risk management
CEO, Inter Africa Capital Group — IACG
Former senior official at the African Development Bank
Sources
African Development Bank. (2025). NEPAD-IPPF marks 20 years of impact.
European Investment Bank. (n.d.). JASPERS: Joint Assistance to Support Projects in European Regions.
World Bank. (n.d.). Primer on project development funds.
CAF — Development Bank of Latin America and the Caribbean. (2012). Infrastructure pre-investment studies in Latin America.
