At an early stage, when an investment opportunity is identified, the InfraCo Africa Finance team supports our colleagues in Compliance to review financial statements and undertake financial due diligence work, reporting on our observations and raising any follow-up queries. Before we commit to an investment or contract, we need to ensure that the companies we are investing into are financially sound and that any concerns are addressed or mitigated. We also support our colleagues in Business Development and Investments as they carry out valuation assessments, enabling us to better understand the value of an investment so that we don’t over or under report on this value but at the same time continue to work towards maximising our returns. As and when required, we will engage local tax advisory and other consultancy services in country to ensure that the project is fully compliant with local tax laws and that the structuring is appropriate to ensure fair payment of tax (in line with the EDFI’s principles for responsible tax in developing countries
). This work ensures that we have all the information required to obtain assurance over both financial and tax matters before entering into a new investment.
We work very closely with the PIDG Risk team to understand our portfolio in the wider PIDG context, identifying potential risks early and balancing our exposure across various sectors and geographies. Having this sounding board is also invaluable as we seek to operationalise new policies across the Group, around tax management and treasury for example. The key is ensuring that these policies remain at the forefront of our Special Purpose Vehicles’ (SPVs) operations, implementing clear, practical applications which enable our project companies to achieve the highest standards of financial integrity.
Once we decide to invest, the Finance team contribute to the preparation of new, or the review of existing, SPV financial management policies to ensure that the controls in place are appropriate and robust. We then regularly review financial statements to assess performance and to ensure best practice is implemented at all times. Key findings will be communicated to the team to incorporate any improvements, as required. Through our board positions on our project companies, InfraCo Africa can also closely monitor the implementation of the various policies.
When we decide to exit a project, realising our returns and recycling those funds into future investments, our partners and future acquirers can rest assured that the company has the highest levels of financial management to attract future private sector funding, something which is fundamental to our PIDG mandate.
Finally, and arguably most importantly, we always seek to lead by example. We report to PIDG and our Owners, receiving their input and recommendations to strengthen our own processes on an ongoing basis. For example, as part of our ISO37001 certification around our Anti-Bribery Management System
s (and the annual audits which are required to maintain such certification) which is managed by our Compliance team, the team draws on some of the examples provided here to demonstrate how we are adhering to financial best practice to support our compliance with the ISO standard.