The Nation (Nairobi)
May 7, 2004

Posted to the web May 7, 2004
Nation Reporter

Policies Needed to Win Over Investors

Poor infrastructure increases the cost of doing business, thereby ceding advantage to established markets.

Aga Khan Fund for Economic Development (AKFED) director, Anwar Poonawala, told an international conference organised by World Bank affiliate, International Finance Corporation (IFC), and the Financial Times of London that policy makers need to make their economies receptive to private sector participation.

The Aga Khan Fund for Economic Development (AKFED) has a network of more than 90 separate companies which have employed over 35,000 people.

The organisation has invested in, among other sectors, infrastructure, health, education, media and rural development. The conference on 'Developing Business and Infrastructure in Africa' ended yesterday.

Mr Poonawala said that AKFED's knowledge of local conditions as well as international experience made it a vital link in channelling foreign resources to local private initiatives in infrastructure.

AKFED is one of the agencies of the Aga Khan Development Network, a group of private, international, non-denominational agencies working to improve the lives of people of all origins and faiths in specific regions of the developing world.

It makes long-term investments based on criteria different from those of a straightforward commercial investor as its investment decisions target not only making a profit but also improving people's lives.

AKFED is also among the key investors in the 75MW Kipevu II Power Plant in Kenya through Tsavo Power Company (TPC). TPC was formed as a result of the organisation and affiliates joining hands with other shareholders including Cinergy Global Power which is a subsidiary of Cinergy Corp, a leading US energy firm, and the IFC.

AKFED has also invested in Azito Energie in Cote d'Ivoire. "With an installed capacity of 288MW, the Azito power plant is arguably the largest independent power project in sub-Saharan Africa," Mr Poonawala said.

"Both Kipevu II and Azito follow recognised PPP [Public-Private Sector Partnerships] models, which have served us well in the past. But their principal beneficiaries are urban populations.

"In order to address the needs of the rural populace, certain variations to the established models are required, and here too, AKFED has played a leading role," Mr Poonawala stressed.

AKFED, through Industrial Promotion Services, is also involved in the West Nile Rural Electrification Project in Uganda in an area that was used to being supplied with only 4MW of electricity. The region has now been opened to commerce and industrial development as a result of the electrification project. IPS was granted a 20-year licence to generate, distribute and sell electricity in the West Nile region which has a population of 1.3 million.