Sub-Saharan Africa has attracted only a small share of the private investment in infrastructure in developing countries, and that share has been heavily tilted toward telecommunications. This sector claimed 64 percent of investment flows to the region’s infrastructure sectors in 1990–2004—a far larger share than the 47 percent in the rest of the developing world. Many factors have influenced these patterns. But Africa’s limited access to project finance has been an important one.

Infrastructure projects with private participation are often financed with a mix of equity and nonrecourse debt (debt contracted by the project company without recourse to the sponsors, also called project finance). Limited access to such debt can severely damage an economy’s ability to attract private investment in infrastructure. Project sponsors will rarely finance infrastructure projects with equity only, or take the project debt fully on their balance sheets.

Africa has attracted less nonrecourse bank debt relative to private investment in infrastructure than other developing regions. It has been even less successful in raising project finance in capital markets through project bonds. And most of this bond financing was raised for South African projects through local currency issues in that country’s capital markets.

In the recent years, robust but few investment activities have surfaced in the African Continent. It has created a new buzz in the US and European investment communities. One of the most interesting projects of this decade in Africa is considered to be the Congo Hydro Power Project. This is a 40,000 MW Hydro Power Project requiring US $80 Billion.

Hillsdale Group has been actively monitoring the investment activities in this continent and remains very positive in terms of future investment for the company.