PIDG plays a pathfinder role at the frontier to enable development impact and unlock the doors of infrastructure to private investment

The Private Infrastructure Development Group Ltd. (PIDG) an innovative infrastructure development and finance organisation that plays a pathfinder role to address market failures in the poorest and most fragile countries in sub-Saharan Africa and south and south-east Asia has today published its Five-Year Strategic Plan for 2019 – 2023 .

Building on its recent governance restructuring, PIDG’s new five-year strategy is focused on delivering pioneering infrastructure projects that offer an innovative, agile and sustainable way of combating poverty and delivering high development impact. Operating at the frontier, be that through the lens of geographies, sectors, products or standards, PIDG addresses a gap in the international development architecture which is critical to the achievement of the UN Sustainable Development Goals (SDGs).

Working collaboratively along the project life-cycle and across the capital structure, PIDG leverages its unique attributes to help early-stage projects overcome financial, technical or environmental challenges creating investment-ready, bankable infrastructure opportunities, as well as building local capability and capacity, while providing innovative financing solutions.

“It is about scale and pace, building on over 16 years of success and accelerating that.” said PIDG Chair, Andy Bainbridge. “Today, PIDG is a $3.4bn innovative infrastructure development and finance organisation. Operating at the frontier, we play a pathfinder role in creating impact by doing what others cannot or will not do, yet. Our ambitious five-year strategy sets out how we will seek to address the changing landscape and significant gaps that remain in the infrastructure space.”

Commenting on its new strategy PIDG CEO, Philippe Valahu, said: “The key obstacle to increasing private sector participation in infrastructure is the shortage of well-structured and bankable projects suitable for private investment. We provide innovative solutions in a way that is not available in the market today. It’s about doing more, better – and proving to people that in the world of emerging market infrastructure you can achieve things that other people believe are not achievable.”

PIDG’s strategy is focused on delivering projects that offer: Scale, Replicability, Affordability and Transformation. Together with the identification and leverage of programmatic themes, PIDG will continue to demonstrate its additionality and maximise development impact, while ensuring that priorities such as gender equality, women’s empowerment and climate change are reflected in depth across its portfolio.

PIDG will deliver its pioneering infrastructure through three business lines that deploy a unique set of capabilities:

• Upstream Technical Assistance – comprising PIDG’s Technical Assistance Facility (TAF) and DevCo
• Developer – Investor – comprising InfraCo Africa and InfraCo Asia
• Credit Solutions – comprising the Emerging Africa Infrastructure Fund (EAIF) and GuarantCo

This new structure embeds PIDG’s collaborative personality, creates better alignment, and allows its companies to be coordinated in a way they have not been in the past.

Upstream Technical Assistance: PIDG’s reconfigured IFC-PIDG/TAF business will support the other PIDG companies, by providing support to project development and enabling transactions, improving the affordability and/or impact of projects through viability gap funding; transaction advisory services, embedded advisers in some of the countries in which we operate, and piloting new programmatic initiatives.

Developer – Investor: InfraCo Africa and InfraCo Asia play a critical role in helping to originate innovative opportunities and structure projects to ensure they achieve a greater level of impact, making them more attractive to private sector investment and reducing transaction costs. They undertake early-stage project development providing management and capital to address  risks and develop bankable projects that can attract debt and equity at financial close. This supports projects where private sector developers are generally unwilling or unable to take on the upfront costs and risks (whether actual or perceived) on their own.

Credit Solutions: PIDG’s Credit Solutions business will address a shortage of long-term, patient funding and a lack of local currency financing and local capital market development for private sector infrastructure projects in developing countries. GuarantCo and the Emerging Africa Infrastructure Fund (EAIF) provide funded and contingent hard currency and local currency credit solutions. With greater flexibility to respond to the needs of the market, PIDG’s Credit Solutions business will expand its existing local currency and local capital market activities, both of which have significant market-building potential.

It is clear that the SDGs will only be achieved if organisations like PIDG mobilise private sector capital at scale. As an early proponent of blended finance, PIDG has demonstrated its success at attracting investment into infrastructure projects, drawing in funding sources such as local pension funds, which have not been willing to invest in such projects before. To retain its niche, PIDG will continue to seek complementarity and partnerships with other players in its space, as it believes this is a more efficient way to mobilise private sector investment to where it is needed most.

The next stage of PIDG’s evolution has begun. This new strategy, combined with its renewed governance, will allow PIDG, to maximise the development impact of its activities – while moving toward financial stability and ensuring that every dollar that it spends could not have been spent better.