Liz Hart | Managing Director | Infrastructure Africa | mail me |
As the global infrastructure and energy transition agenda intensifies, many prospective projects stall in their earliest stages – long before they become “bankable”.
To address this roadblock, we bring together development finance institutions (DFIs), governments, developers and transaction advisors. The goal is to fast-track early-stage project development and provide practical support for scaling initiatives.
Why early-stage project preparation matters
According to the Development Bank of Southern Africa (DBSA), there is an average 8 – 9 year gap between project identification and actual implementation. Early-stage project preparation – including feasibility studies, environmental and social assessments, and risk analyses 0 is often underfunded. This leaves many projects “unbankable”.
A recent IRENA analysis found that well-structured renewable energy projects can reach financial close in 6 – 15 months. However, many projects languish for years due to inadequate development funding.
In Sub-Saharan Africa, the lack of early-stage capital disproportionately affects local developers. These developers often rely on their own equity or grants rather than structured financing. This highlights the critical importance of project preparation to ensure timely execution and access to funding.
Early-stage bottlenecks highlighted
There are several common obstacles affecting early-stage development:
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Limited access to prefeasibility funding
In the SADC region, only seven development finance institutions provide early-stage project preparation facilities. Only three cross-border project preparation facilities serve all 16 SADC countries: DBSA Project Preparation Facility, SADC Project Preparation Development Facility and the Southern African Power Pool’s Project Advisory Unit Fund. Importantly, there are no dedicated regional facilities in SADC exclusively for renewable energy project preparation.
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Lengthy, unstandardised approval processes
Terms and conditions for accessing early-stage facilities vary widely across DFIs, even within the same country. For many local developers, completing required prefeasibility work before applying for funding means stretching limited resources just to qualify. This inconsistency slows down overall project execution and highlights the need for streamlined project preparation procedures.
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Capacity and risk challenges
Local developers often lack the technical and financial expertise to structure and de-risk deals appealing to financiers. According to IRENA, 45% of projects submitted via its Energy Transition Accelerator Financing (ETAF) platform are rejected due to inadequate readiness. Around 25% are rejected because of poor financial planning; of these, roughly half are turned down for insufficient equity commitment.
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Financing gap despite available capital
Analysis by AGBI shows that although capital is available, there is a shortage of commercially viable, bankable climate projects, particularly in developing markets. DFIs and donor-backed project preparation facilities remain underutilised or difficult to access due to high capacity and procedural barriers.
In conclusion
Bridging the gap between project concept and bankability is our greatest challenge. Without preparation, even the most promising projects never reach financial close. This event catalyses deal flow by giving developers the tools, guidance and financing needed to make their projects investable.
