Technical Assistance (PIDG TA)

PIDG TA provides technical assistance and capital/viability gap funding (VGF) grants to the PIDG companies in support of projects that they develop and finance. In doing so, PIDG TA plays a centralrole in enabling the PIDG Group to enhance the impact of its projects, promoting initiatives that alignwith PIDG’s strategic objectives.

Our Impact

The PIDG TA Team manages grant funding to meet a range of needs associated with the infrastructure project development cycle, including the assessment of potential investment opportunities and building capacity of host country partners and local investors.

PIDG TA can also provide capital grants at financial close, such as viability gap funding, to support the construction phase of projects providing strong development impact

PIDG TA also manages key relationships with strategic partners to deliver upstream capacity within PIDG’s target markets and facilitate private sector investment in PIDG’s priority sectors.

$145m

Cumulative amount of TA grants approved since TA was formed in 2004 (up to 31 December 2021)

316

Total number of grants approved since TA was formed in 2004 (up to 31 December 2021)

72

Projects that PIDG TA has provided support to that was essential to the project reaching financial close

$1.3bn

Private investment capital mobilized at financial close from $68.4M of PIDG TA grant funding provided to projects

TA Role in Transactions

PIDG TA funding is deployed across the complete project life cycle with a particular emphasis on upstream capacity building and early-stage project development. These activities directly contribute to the success of PIDG projects, especially in situations where a project is very challenging and would not be commercially viable without an element of subsidisation.

Upstream support

We fund advisers to work with government officials to support the design and implementation of infrastructure projects financed by the private sector.

Project preparation

We fund activities to help develop the project to reach Financial Close or Commercial Close.

Transaction support

We cover costs relating to bond and loan note issuances.

Impact enhancement

We fund feasibility studies, design of developmental activities, or the implementation costs for developmental activities aimed at enhanced social inclusion, especially around gender issues.

Pre-feasibility study

We fund early-stage assessments to understand the viability of a project or aspects of a project.

Lender due-diligence

We fund enhanced due diligence of aspects and stakeholders involved in the project.

Capital market activities

We build capacity and strengthen local capital markets when such work enhances the likelihood of project financial closure or the sustainability of projects.

VGF and capital grants

We provide Viability Gap Funding grants which are upfront capital grants that reduce the costs of impactful infrastructure projects. The funding is designed to make economically viable projects financially viable, thereby, attracting private sector finance.

TA Role in Transactions

The DevCo Partnership is a partnership between PIDG and IFC. The partnership funds upstream capacity to governments in countries that PIDG operates, to encourage further private sector investment in infrastructure in these countries.

The Global Water Security and Sanitation Partnership (GWSP) is a partnership between PIDG and The World Bank. The aim of the partnership is to deliver upstream capacity to governments and public utilities and to support efforts to enhance the creditworthiness of off-takers in the water sector in countries that PIDG operates.

PIDG has partnered with Meridiam to support The Urban Resilience Fund (TURF). TURF is a global blended finance impact fund launched by Meridiam to support cities in delivering critical resilience infrastructure projects in Africa. PIDG TA is providing funding to TURF’s Catalytic Capital Fund to support technical assistance requirements for the fund in countries that PIDG operates.

Case Studies

Our purpose is to combat poverty in the poorest and most fragile countries through pioneering infrastructure to help economies grow and change people’s lives.

Piloting Energy Storage​

Financial close: Q4 2021​

Total debt amount: USD19m​

Increase access to reliable electricity to 66k consumers to improve quality of life and expected to avoid/reduce 6.3k tCO2e/ year through the displacement of thermal power.​

Mozambique: LDC and FCAS​

VGF and Capital Grants

Cuamba is located in a relatively remote location of southern Mozambique’s grid network, and has high poverty and low electrification rates. The project sought to reduce transmission losses currently experienced in Cuamba given its distance from the Cahora Bassa hydro-electric power plant, and has the potential to improve voltage levels in the grid. Due to increasing project costs, EAIF sought VGF with the main goal of ensuring that the tariff remains affordable throughout the life of the PPA, ensuring affordability for the end-users.

Role of PIDG: EAIF was the sole lender and provided a EUR19m to the project. PIDG TA provided USD7m of viability gap funding including for the battery component and USD 130k for an advisor to the utility (EDM) to build capacity and support the completion of commercial agreements.​

Summary of routes to impact​
Direct Impact on People ​
SDG: 7.1 + 7.2 – Access to affordable and reliable renewable energy.​
Expected impact: 66k consumers are expected to benefit across a mix of income groups/gender. The largest impact will be felt by users that consume the most power. ​

Direct Impact on Planet
SDG: 13 – Climate change mitigation​
Expected impact: Avoid 6.3k tCO2e per year ​

​Indirect Impacts (wider economy)​
The largest impact is expected for businesses that are highly dependent on electricity for operations​

Market Transformation​
Challenge: Solar energy is intermittent which poses challenges for the operation of the grid to consistently and reliably meet electric demand.​
Channel: Demonstration of the first utility-scale energy storage system (funded by PIDG TA and BII+) in Mozambique and one of the first in SSA.​
Outcome: The utility and the project company will share the data and learnings publicly which should encourage other utilities and investors to adopt battery technology in the future.​

Climate Risk and Resilience Assessment​
Transition: Paris Aligned​
Physical: Risks considered and where possible mitigated​

Mobilisation​
Mobilised $9m equity from foreign and domestic sources. ​

Raising Safety Awareness and Empowering Women in Pakistan​

Total TA amount: USD192k​

​Partially financing a series of awareness and capacity-building workshops intended to reduce safety risks and technical/non-technical losses in K-Electric’s distribution/transmission network.​

Pakistan: LMIC & FCAS​

Impact enhancement

GuarantCo provided a guarantee to K-Electric (KE), Karachi’s power utility, to finance capex costs for installing ariel bundled cables to end electricity theft. About a fifth of electricity generated is lost during transmission and distribution through both technical losses and non-technical losses related to faulty metering and theft. K-Electric (KE) are making an effort to create awareness through capacity building of relevant communities and stakeholders with regards to safety threats and illegal connections. ​

Role of PIDG TA: PIDG TA committed to providing a grant to partially finance a series of awareness and capacity-building workshops intended to promote safety awareness amongst the most underprivileged, and influence policymakers to curb the illegal infrastructure around the KE network.​

Summary of routes to impact​
Direct Impact on People ​
SDG: 5 – Gender equality, 8 – Decent work and economic growth​

Expected impact: Woman Neighbourhood Network (Roshni Baji) – has trained 100 women, the first female electricians in Pakistan. Since March 2021, the women have educated 463,000 households on electrical safety, and have facilitated referral cases where there have been breaches in electrical safety or illegal hook connections, converting 6,900 illegal connections to legal ones. ​

The workshops sought to empower women in the community were employed to influence their communities.​

Indirect Impacts (wider economy)​
The workshops will reduce safety-related risks, resulting in improved reliability of service for consumers on the grid, and long-term savings to KE that will improve the company’s capacity to service additional customers.​

Supporting Early-Stage Mini-Grid Solutions​

Total TA amount: USD110K​

​PIDG TA covered the cost of conducting a comprehensive Productive Use of Energy (PUE) and Demand Stimulation pre-feasibility study.​

Sierra Leone: LDC

Pre-feasibility study

Sierra Leone has a rural electrification rate of just 5.3%, one of the lowest in sub-Saharan Africa. The government recognises the potential of off-grid solutions to address the electricity needs of the country’s rural population. InfraCo Africa and PowerGen developed the first of its kind in scale and scope solar mini-grid project in Sierra Leone and the wider region, that aims to deliver 5MW of off-grid power, electrifying 94 communities across four regions. data on the commercial viability of mini grids in Sierra Leonne remains scarce.​

Role of PIDG TA: PIDG TA provided a grant to cover the cost of PowerGen and 3rd party experts in conducting a comprehensive Productive Use of Energy (PUE) and demand stimulation pre-feasibility study across existing mini-grid sites in Sierra Leone.​

Summary of routes to impact​
Direct Impact on People ​
SDG: 7.1 + 7.2 – Access to affordable and reliable renewable energy.​
Expected impact: 12.5k new customer connections across the southern and eastern half of Sierra Leone.​

Direct Impact on Planet​
SDG: 13 – Climate change mitigation.​
Expected impact: Avoid tCO2 emissions through the displacement of diesel gensets . ​

Indirect Impacts (wider economy)​
SDG: 8.5 – Achieve full and productive employment and decent work for all women and men.​
Expected impact: Businesses will also benefit from improved productivity, enabling economic growth and job creation.​

Market Transformation of TA Grant​
Challenge: Productive Uses of Electricity and Demand Stimulation research relevant to mini-grids in Sierra Leone remains in a preliminary stage and required further investigation. ​
Channel: The study assisted PowerGen and InfraCo Africa to categorize and prioritize productive use interventions in terms of potential impact on mini-grid customers, mini-grid, unit economics and portfolio economics.​
Outcome: These interventions have enabled mini-grid customers to increase their consumption of electricity, with two-thirds of surveyed customers reporting significant improved quality of life as a result of connection to the mini-grid.​

Climate Risk and Resilience Assessment​
Transition: Paris Aligned​
Physical: Risks considered and where possible mitigated​

Catalysing Investment in Vietnam’s Water Sector​

Total TA amount: USD2.7M​

​PIDG TA provided USD2.7M in viability gap funding​

Vietnam: LMIC​

VGF and capital grants

The current water supply in the Ba Tri district in Vietnam is intermittent and the quality does not always meet the required standards. Only close to 40,000 people or 33% of the population have existing water supply connections, with majority using rainwater and storage tanks for water needs. InfraCo Asia and Darco Water are developing a retail water supply project in Ba Lai to address these challenges.​

Role of PIDG TA: PIDG TA committed to providing a VGF grant of US$ 2.7M to meet the gap in funding required for construction of phase 1 of the water treatment plant. The VGF will support overall affordability and make the tariff more affordable to poor households​

Summary of routes to impact​
Direct Impact on People ​
SDG: 6 – Availability and sustainable management of water and sanitation for all.​

Expected impact: The project expects to increase first time access to 71k beneficiaries. This will improve their resilience to current and future climate change. Women and girls are expected to disproportionately benefit from improved access ​

Market Transformation of TA Grant​
Challenge: Commercial viability for water sector projects remains low and unattractive to the private sector because of the low water tariffs that are insufficient to cover full cost of such capital-intensive projects. ​
Channel: Private sector participation and investment in Vietnam’s water sector.​
Outcome: The project will help catalyse additional investment in Vietnam’s water sector. Successful operation of the first phase will enable raising additional funds from the market for the second phase, resulting in investor confidence in similar projects in the future.​

Promoting market transformation in the West African Monetary Union region​

Total TA amount: USD500K​

PIDG TA provided two grants totaling USD500K grant to cover the costs of engaging consultants to implement a number of reforms including expansion of the range of financial instruments and products tradable on the market, bolstering CREPMF employees’ capabilities related to reforms, and promoting sustainable finance instruments such as green bonds.

Multi-country (West Africa)​

Capital market activities

CREPMF, West African Monetary Union (WAMU)’s Capital Market Authority, has been promoting capital market reform to mobilise greater investment for local issuers. In 2020, EAIF participated in a US$ 107m local bond issued by the Port of Dakar. Following the successful implementation of stronger ESG standards to bond issue, PIDG was asked by CREPMF to support with standardising issuance procedures across future debt capital markets transactions. A new financial instrument (Green Social and Sustainable Bond) was introduced. ​

Role of PIDG TA: PIDG TA committed two grants that were used to revise the content of the prospectus required by issuers of securities and expand the range of financial instruments and products tradable on the regional financial market, bolster CREPMF’s employees’ capabilities to take over the actions related to the reforms of the WAMU regional financial market, and promote the new innovative instrument which would contribute to the diversification of products and the attraction of local and international investors.​

Market Transformation of TA Grant​
Challenge: Issuance procedures across debt capital markets transactions was not standardized. Additionally, the new bond instrument lacked visibility and promotion among issuers and investors in the regional financial market. ​
Channel: The PIDG TA grants were used not only to standardize transactions, but to also increase the opportunities to use financial instruments other than the transferable securities currently used on the regional financial market. The grants were also used to facilitate championing, as part of the implementation of the regional financial market reforms, the introduction of a new financial instrument (green social and sustainable bond).​
Outcome: This support largely contributed to the mobilisation of local and international investors around the innovative instrument being developed as it was expected to help the private sector reduce the cost of issuing sustainable bonds through subsidised costs.​

Creating a pipeline of investment-ready climate resilient infrastructure​

Total TA amount: £243K​

​PIDG TA provided £243K in grant funding to cover the cost of transaction advisors to prepare two climate resilient infrastructure projects in Kenya​

Kenya: LMIC & FCAS​

Upstream support

The Government of Kenya (GoK) has prioritized the use of Public Private Partnerships (PPPs) as a tool in development of infrastructure assets and provision of services. Through its PPP Directorate (PPPD), the GoK has sought to prepare a pipeline of investment-ready climate resilient infrastructure projects that can attract private sector investment through open and transparent procurement.​

Role of PIDG TA: PIDG TA signed an MoU with National Treasury in October 2021 which initiated the funding of early-stage project preparation and transaction advisory costs to support the PPPD with preparing investment-ready climate resilient infrastructure projects. PIDG TA provided a grant of £243K, with additional funding of £1.7M provided by FCDO.​

Summary of routes to impact​
Direct Impact on People ​
SDG: 11 – Sustainable cities and communities.​
Expected impact: One of the selected projects addresses existing issues related to inadequate supply of accommodation among students in Nairobi, as well as aging existing accommodation. Additionally, the project will be gender-inclusive by taking into account housing for female students and will incorporate accessible designs for students with disabilities.​

SDG: 13 – Climate change mitigation.​
Expected impact: Two projects were selected under the pilot phase in line with GoK’s and PIDG’s goal of prioritizing development of climate resilient infrastructure. The projects incorporate climate smart solutions with the goal of reducing emissions.​

Market Transformation of TA Grant​
Challenge: Despite the availability of funds, a large project pipeline and a clear need, comparatively few projects reach financial close in Africa, with 80% of projects failing at the feasibility and business planning stage (Mckinsey and Company – Africa’s Infrastructure Paradox). ​
Channel: The grant funding for early-stage project preparation activities will help to de-risk projects and bridge financing gaps to ensure the projects reach financial close and are successfully implemented.​
Outcome: If successful, the programme will help stimulate investments in Kenya and the region (if programme is replicated) that enhance the resilience of the most vulnerable to climate, who are usually the poorer and most under-served people in both rural and urban areas.​