Technical Assistance (TA)

PIDG TA plays a central role to enable PIDG to initiate multi-company programmes and initiatives that are not specific to a particular company, and which align with PIDG strategic objectives.

The PIDG TA Team manages grant funding to meet a range of needs associated with the infrastructure project development cycle, including the assessment of potential investment opportunities and building capacity of host country partners and local investors.
PIDG TA can also make up-front capital grants at financial close, through Viability Gap Funding (VGF), to support the construction phase of projects providing strong development impact.

The funding is designed to make an economically viable project financially viable, thereby, attracting private sector finance.
The aim of using VGF is, to deliver projects that are affordable and transformative which are replicable by other market participants. To be eligible for VGF grants, projects should be:

  • located in DAC 1 and 2 Countries*
  • have strong, demonstrable, development impact including, clear, strong positive impact on females or female-headed households and/or clear, strong, climate change mitigation benefits.
  • a ‘first mover’ and developmentally important
  • able to demonstrate that the VGF Grants does not exceed 20% of the project’s capital costs

Government-side Technical Assistance

Capacity building

Through provision of training and support to people in governments, operators, local capital markets, financial institutions and quasi-public enterprises

Policy, regulatory and institutional reform

Advice and training to support the design and implementation of reforms aimed at facilitating financing by the private sector

Embedded advisors

To fund advisers to work with government officials managing the structuring and negotiation of PPPs and private investments

Infrastructure development strategies

Studies to guide governments on options for financing, including mechanisms to promote private sector involvement and local currency financing

Capital market development

To strengthen local capital markets and augment the likelihood of project financial closure or the sustainability of projects

Project-side Technical Assistance

Upstream technical assistance

To cover upstream technical assistance that helps identify potential pipelines of PIDG projects, or legal/regulatory/policy obstacles.

Impact enhancement

To cover feasibility studies, the design of and/ or cost of developmental activities, aimed at enhanced social inclusion

VGF preparation grants

To help PIDG Companies prepare an early stage appraisal of the VGF subsidy requirements and an independent review of the project’s financial model to justify the size of grant

Pioneering transactions

Support for the design and implementation of pioneering projects or transactions, to reflect some measure of innovation or demonstration effects.

Post transaction support

Financial support to the PIDG Companies, directly to governments and/or private investors

Capital Grants

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Projects

InfraCredit – Nigeria

This project unlocked the potential in infrastructure financing in Nigeria.

GuarantCo provided a Callable Funding Facility of $50m

PIDG TA provided $1.2m in grants to cover feasibility costs and capital raising costs.

Challenge

  • Investment by Nigeria’s pension funds in infrastructure-linked bonds has been constrained by lack of precedents and insufficient credit quality to satisfy investors.

TA Solution

  • A TA grant of USD178,000 was provided to GuarantCo to cover the costs of just over half of a feasibility study for the establishment of a credit enhancement facility in Nigeria.
  • A TA grant of US$900,000 be made available to GuarantCo to cover approximately half of the seed capital required for setting up InfraCredit in partnership with NSIA.

Impact

  • Since it was established, InfraCredit Nigeria has successfully issued its first guarantee supporting a ten-year NGN10bn corporate infrastructure bond, as well as its first 15-year corporate infrastructure green bond.

Key facts

34
TA grants were approved in 2019 – and committed most TA funds to date.
Pipeline of 40+ TA grants for 2020 with a focus on pre-feasibility studies and capacity building

The majority of these address upstream capacity issues both within a project and at a broader government/utility level, as well pre-feasibility work that is required for infrastructure projects.

* Exceptions to this rule may be considered.
**Exceptions to this rule may be considered.


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