About the AIP Facility
Bigen is the founder investor in the African Investment Preparation Facility (AIPF) that delivers bankable infrastructure projects across key sectors in Africa. The projects are identified and prepared by a fully-resourced project development company with the technical, financial, environmental, socio-economic and institutional and legal expertise to take opportunities to financial close. This makes the AIPF an attractive investment destination for funders.
The Need for Project Preparation Funding
Enabling financial close
Despite the progress made, most developing countries still suffer from insufficient access to quality, reliable infrastructure. Preparing infrastructure programmes to attract private investment is a complex and demanding challenge, especially in the African context.While there is abundant private-sector interest in financing bankable projects, the available preparation resources are insufficient to advance projects to a bankable stage; hence the pipeline of well-prepared projects is scarce, limiting investment opportunities.
AIPF Funding Focus
A strategic blend
Infrastructure Project Preparation Facilities
In 2015, the World Economic Forum (WEF) published its "key principles for improving project preparation facilities", aimed at reducing early stage risk, improving effectiveness, and increasing the attractiveness of this market to infrastructure investors. The AIPF incorporates these principles by design, as described here:
Clear objectives and a focussed strategy
The AIPF has applied this approach to its strategy development with clearly identified strategic objectives.
A self-sustainable financing model
The AIPF will recover project preparation costs from the sponsor or at financial close with a reasonable margin to offset losses from unsuccessful projects. With this approach the AIPF has an incentive to optimise the preparation period in order to convert effort into benefit as soon as possible.
Excellence in portfolio management
The AIPF implements a stage gate review mechanism within the project preparation cycle that identifies "unfeasible" projects early in the process, thereby minimizing costs. The objective is to allocate the funds optimally and to apply a portfolio approach to project preparation investment.
Cost-efficient and value-adding advisory services
AIPF adds value to projects as it has the expertise, experience, networks and knowledge to ensure preparation of a very high standard, at reasonable cost and within an acceptable timeframe.
Stringent governance and accountability
The Facility as a legal entity with its governance and management structures will ensure effective fund management and reporting based on statutory and corporate requirements and an agreed investment strategy.
Strategic Objectives of the AIPF
• Complement financial and institutional resources from like-minded investors for the preparation of infrastructure projects.
• Focus on project preparation with emphasis on feasibility studies, assessment of institutional, technical, financial, environmental, legal and social modules of the project and the key promotor.
• Improve the risk/return profile for investors through diversification of portfolio and set criteria for country exposure limits.
• Shorten the approval times of project preparation, thereby lowering the transactional costs of project preparation.
• Increased throughput of projects to financial close as a result of improved project screening, selection and modelling.
• Unlock project opportunities through origination capabilities.
• Leveraging concessional and grant funding for the Facility.
• Capitalise on existing relationships with entities and professional service providers in Africa.
• Focus on best risk management practices.
• Adhere to sound governance principles.
• To stimulate economic activity and social development on the African continent by enabling infrastructure development.