Project Preparation Funding Structure

PPP Pipeline and Project Preparation Funding Structure

What is the need?

Since 2008, the Government of Nigeria has been developing Public-Private Partnership (PPP) Projects but has recorded only limited success. 

Figure 1: Rationale for PPFs

One of the most critical challenges of PPP projects is the absence of project preparation funding and the consequent shortage of bankable projects, unable to attract private capital for the delivery of inclusive and climate resilient infrastructure.

UKNIAF Approach

Facilitating access to early stage and downstream financing for UKNIAF supported projects is a key plank of the UKNIAF Infrastructure Finance programme strategy. UKNIAF is:

    1. Working with a range of federal and subnational MDAs to prepare a pipeline of credible, bankable climate smart projects that can be offered to the private sector through a competitive bidding process. A preliminary pipeline of climate-resilient, inclusive infrastructure projects that cut across transportation (BRT infrastructure), renewable energy, Special Agro Processing Zones (SAPZ) and ICT (tech hubs) has been developed.
    2. Identifying and facilitating access to early-stage project preparation funding (as either a grant facility, loan facility or early-stage investments (equity), in alignment with the requirements of the different funding providers under an agreed PPF Structure. UKNIAF has secured financing interest from selected multinationals and DFIs willing to appraise projects on a case-by-case basis, with the intention of making project preparation funding available to projects that meet their financing criteria.

Figure 2: Structure PPF Support for UKNIAF supported projects

How UKNIAF PPF Support is delivered

  • Transaction teams work with federal and sub-national MDAs to collate information on PPP projects being developed. In doing this, our transaction teams conduct pre-appraisal screening of projects to ascertain alignment with ICF and FCDO criteria
  • The Investment team work with multilaterals and DFIs to establish commitment to participate as members of the PPF Panel and potential sectors/projects of interest.
  • Pre-screened projects that cover the areas of validated PPF Panel interest receive support in the form of preparation of concept notes, outline business cases, pitch-decks, teasers and information memoranda, prepared on a case-by-case basis
  • Investment team pitch individual projects to PPF Panel on an individual case by case basis
  • Where there is committed interest from PPF panel members, the Investment team support candidate projects as required to apply for and broker PPF commitment from interested PPF Panel members.

PPF Panel (Prospective)

During the fiscal year to March 2021 the Investment team successfully engaged in extensive consultations with shortlisted multilaterals and DFIs to establish their interest and appetite to provide early-stage funding to Government of Nigeria (federal and sub-national) projects.

 

Working with a range of federal and subnational MDAs to prepare a pipeline of credible, bankable climate smart projects that can be offered to the private sector through a competitive bidding process. A preliminary pipeline of climate-resilient, inclusive infrastructure projects that cut across transportation (BRT infrastructure), renewable energy, Special Agro Processing Zones (SAPZ) and ICT (tech hubs) has been developed.

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