Report: Capacity Building for Infrastructure Entrepreneurs Key in Project Finance

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Hamid Ayodeji

The African Development Bank currently seeks investments from global pensions and commercial financiers to help fund the continent’s infrastructure gap of as much as $170 billion. This infrastructure need presents an investment opportunity, especially for Intrapreneurs.

Intrapreneurs, as used in the context of this article, refers to Entrepreneurs or business owners who are typically in corporate businesses but desirous of developing Large-Scale projects such as Toll Roads, Power Plants, Renewable Energy, Gas Plants, Airports, Large Scale Real Estate Projects, and so on.

While the government should provide an enabling environment for infrastructure to happen, the Private Sector should equally play a leading role in major infrastructural developments. For Intrapreneurs to overcome the obstacles often associated with project delivery process, it is necessary to develop a string of “Infrastructure Finance” capabilities, in order to attract capital from investors.

A survey by Brickstone revealed that 80 per cent of entrepreneurs who show interest in the development of Infrastructure do not currently have the knowledge and capacity to develop and execute these projects. The research further revealed that though most entrepreneurs have the inabilities to demonstrate in-depth knowledge of their large-Scale projects to institutional investors, they often find it difficult to secure (in the bag) the right equity funding needed to attract the necessary fund required for the project.

The inability to demonstrate the much-needed knowledge as well as the seemly gap in the quality of the knowledge of large-scale projects by most entrepreneurs has been the obstacle standing in the face of such entrepreneurs securing the required funding for projects from (African) investors, the report added.

“Our research equally shows that most Entrepreneurs have challenges making progress with their projects because of the limitation imposed by the paucity in knowledge and capacity building in financing projects centering on Infrastructure development. Consequently, the African Infrastructure private sector has also not been able to take its rightful place in project development and delivery.

“Understanding the need for knowledge exchange in Infrastructure Finance, Brickstone Africa has set up the Brickstone Dealcamp Series – a training series designed for African Entrepreneurs developing projects but lacking the knowledge of project and corporate finance principles in making deals happen. “Under the training series, the team provides intense two or three days programmes, using best practice masterclass finance training tools specifically for entrepreneurs involved in large scale projects in energy, infrastructure and real estate,” it stated.

It noted that the project finance fundamentals for infrastructure is one of the courses at the Brickstone Dealcamp Series. The trainings would hold in major African cities, including Abuja, Lagos, Port Harcourt and Accra. The training focuses on the infrastructure financing process.

“It is important for entrepreneurs to know that infrastructure financing is a lengthy process that could take up to 1 or 5 years to active the financing close (i.e. raising the required capital which sometimes could be up to over $2 billion on a single project.

“This is an enormous undertaking by the Intrapreneur as it requires the intrapreneur to drive the project along Four major phases of the project

“Finally, it is important for Intrapreneurs to note that Project Development is a journey towards achieving bankability. It is usually a long and expensive expedition, which could cost as much as five per cent to 10 per cent of the total project cost, while a less knowledgeable entrepreneur would spend a lot more.

“This important knowledge of how to achieve bankability is what is lacking amongst Africa business executives and Entrepreneurs developing Large projects to fill Africa’s Infrastructure gap. It is this very gap that Brickstone Africa has set out to fill through the Brickstone Dealcamp Series,” it added.