#Ebun’s Notes on #ProjectDevelopment
The infrastructure project pipeline cannot expand on charity only.
Project development funding has to become more self sustaining.
It has to become more value-creating and result focused.
Ecosystem sits with two extremes
⛔ The pipeline of projects starts deep and wide and tapers off into a trickle.
⛔ The availability of funding starts in trickles and expands into an ocean.
Free, non-return seeking funds are the primary source of support that bridges the gap of getting a sponsor's ideas through early and mid stages project development to late stage of raising finance and achieving financial close.
❌ Providers of these grants have zero expectations of the funds, they don't seem to really expect the projects to reach financial close.
❌ Success for these sources is measured by funds granted, not projects closed.
To grow the pipeline of bankable projects early-stage funding will need to increase.
The reality is, to increase, they cannot remain free or devoid of expectations.
If more project development funds actually require a result and a return, more funds will be recovered to recycle into new projects.
It will lead to
✅ Better identification and embedding of requirements of long-term institutional investors into project development efforts so that they are completed in a manner that better attracts that type of funding.
✅ More focus on coaching and education of developers to ensure better quality projects are picked and there is efficiency and effectiveness in managing development of pipelines at scale.
If Africa’s Infrastructure gap will narrow, early-stage project development funding has to begin to shift focus to properly catalysing and expanding the size of the pipeline that reaches the more abundant longer term, but lower risk capital.
Managing Partner at Arjun Infrastructure | ex KKR
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