Funds for cooperation with Africa are available, but well prepared projects are lacking

The availability of European funds to finance cooperation projects in Africa is large, but there is a lack of well-prepared projects, particularly in Portuguese-speaking African countries, according to the president of the Portuguese Development Finance Society (Sofid).

Last week, the European Parliament approved the European Sustainable Development Fund, which intends to raise up to 44 billion euros for investment in Africa and in neighbouring countries of the European Union, with at least 28% of the funds earmarked investments in climate action, renewable energy and resource efficiency.

The president of Sofid, Mariana Abrantes Sousa, spoke at a conference organised by the AIP Foundation and Africa Monitor Intelligence and held in Lisbon about Sofid’s great interest in taking part in projects in the areas of renewable energy and tourism, which have a “significant impact on development.”

In a context of crisis in several African countries, where commercial bank financing is scarce, Sofid, she said, may “help get more resources” from European funds for cooperation with Africa, or the European Investment Bank, but “well-prepared projects are lacking in Africa.”

“If there is a project that has legs, we can intervene very early on, help to understand what the purpose of it is, if it is well structured, if the promoter has capacity and guide them to seek funds from another entity,” said Abrantes de Sousa.

Currently, there are “large amounts of funds in various forms for Africa,” notably the recent ElectriFI fund, to which Sofid can apply for renewable energy business projects in Africa.

“The big change we want to make is to intervene more upstream. There are few files ready to analyse and sign off,” said Sofid’s president, stressing the complexity of the requirements, namely social and environmental studies.

The lack of information makes it harder to conduct such studies in Africa, she said, which makes it easier for banks such as the European Investment Bank to lend in Asia than in Africa.

But there is also “a lot of money” available to prepare the files, through grants, which countries and promoters can access, although these are also little used by Africa, and Portuguese-speaking African countries are almost absent from the lists, Abrantes de Sousa said.

Created 10 years ago, Sofid is active in Portuguese-speaking African countries, Brazil, Timor-Leste (East Timor), Morocco, Tunisia, Algeria, South Africa and other countries in West Africa and Latin America.

It manages the InstiMOZ fund for the Portuguese State, which has an endowment of around 94 million euros, created in exchange for the transfer of control of the Cahora Bassa dam to the Mozambican state.

It is also setting up a credit line for Sao Tome and Principe, with 10 million euros guaranteed by the Portuguese and Sao Tome state to support business investments. (macauhub)