Project Preparation: From Concepts to Bankability

As the global infrastructure and energy transition agenda intensifies, many prospective projects stall in the earliest stages – well before they become “bankable.” To address this critical roadblock, the upcoming Infrastructure Africa Business Forum will bring together development finance institutions (DFIs), governments, developers, and transaction advisors to fast-track early-stage project development.

Why early-stage project preparation matters

• According to the Development Bank of Southern Africa (DBSA), there is on average an 8-9 year gap between project identification and actual implementation.
• Early-stage project preparation – including feasibility studies, environmental & social assessments, and risk analyses – is often underfunded, leaving many projects “unbankable.”
• A recent IRENA analysis found that while well-structured renewable energy projects can reach financial close in 6-15 months, many languish for years due to inadequate development funding.
• In Sub‑Saharan Africa, the lack of early-stage capital disproportionately affects local developers, who often rely on their own equity or grants, rather than structured financing.

Early-stage bottlenecks highlighted

The event will shine a light on several common obstacles:

1. Limited access to prefeasibility funding

1. • 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.
   • There are no dedicated regional facilities in SADC exclusively for renewable energy project preparation.

2. Lengthy, unstandardised approval processes

1. • Terms and conditions for accessing early-stage facilities vary wildly 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.

3. Capacity & risk challenges

1. • Local developers often lack technical and financial expertise, making it difficult to structure and de-risk deals in ways that appeal to financiers
   • According to IRENA, 45% of projects submitted via its Energy Transition Accelerator Financing (ETAF) platform are rejected because they lack adequate readiness.
   • Around 25% are rejected due to poor financial planning; of these, roughly half are turned down for inadequate equity commitment.

4. Financing gap despite available capital

1. • Analysis by AGBI shows that although there is “capital ready to be deployed,” there is a shortage of commercially viable, bankable climate projects, especially in developing markets.
   • DFIs and donor-backed project preparation facilities are under-utilised or hard to access due to high capacity and procedural barriers.

How the event will help

The Project Preparation: From Concepts to Bankability event aims to address and de-risk these early-stage challenges through:

• Strategic partnerships
  Bringing together DFIs, governments, private developers, and technical partners to co-design and fund project preparation facilities.
• Technical Assistance (TA)
  Offering targeted TA for feasibility studies, environmental and social impact assessments, and financial modeling. These services help de-risk projects and make them more attractive to investors.
• Transaction advisory support
  Connecting projects with experienced transaction advisors who can help structure financing, negotiate offtake or PPA agreements, and align project structure with bankability criteria.
• Capacity building
  Building the skill sets of local developers to improve their bankability (technical, financial, legal know-how), reducing their reliance on external consultants.
• Innovation in financing mechanisms
  Exploring or scaling up instruments such as Project Preparation Facilities (PPFs), Development Impact Bonds (DIBs), risk-sharing facilities, and blended finance.
• • Example: the DREAM programme in Ethiopia was funded with US$8 million via a PPF, helping bridge early-stage bottlenecks.

“Bridging the gap between project concept and bankability is our greatest challenge – without it, even the most promising projects never reach financial close.” Stated Liz Hart, Managing Director of Infrastructure Africa. “This event is about catalysing deal flow: giving developers the tools, guidance and financing they need to make their projects investable.”