Foundations 19 – Infrastructure Space

In addition, a renewable energy initiative has been launched to attract an investment sum of USD 70 billion in order to gain an additional 10 gigawatts of capacity by 2020 and at least 300 giga- watts by 2030. In 2014 Kenya became the world’s third-largest producer of geothermal energy – with 600 megawatts. Ethiopia’s “Adama Wind Farm” with a capacity of 153 megawatts is currently the largest wind project in Africa. These projects underscore what Carlos Lopes tersely summarizes: “There have been more investments in infrastructure in the last five years than in the previous 30 years.” But this also raises the question of how Africa can finance these and future projects. Lopes confirms that the funding gap is large and that addition- al resources are needed. “Between now and 2020 about USD 93 billion is needed to overhaul Africa’s infrastructure.” But Africa is not only a receiver in this scenario: “Contrary to popular belief, do- mestic financing remains the single main source of infrastructure financing. Recent estimates suggest that Africa finances about 65 percent of its infrastructure expenditure.” This is possible thanks to increased tax revenues, gains in commodities prices, and a boom in demand that has persisted already for a decade. The gen- eral macroeconomic and institutional situation has also improved.

Left: The new administrative building in Kenya’s port Lamu is the starting point for the LAPSSET Corridor to South Sudan and Ethiopia. (www.lapsset.go.ke) Center: Ethiopia’s “Adama Wind Farm” with a capacity of 153 megawatts is the largest wind project in Africa. (www.top-energy-news.de) Right: Ethiopia is building the “Grand Ethiopian Renaissance Dam,” creating one of the largest hydroelectric power dams in the world. (www.internationalrivers.org)

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Perceptions of a continent completely linked to conflict persist, despite facts calling for a more nuanced view.

Lopes sees great opportunity in seeking alternative investment sources, and he emphasizes fast-growing pension funds in addi- tion to private equity and state funds. He also expects that the

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