The African Export-Import Bank and the Development Bank of Southern Africa have created a Joint Project Preparation Facility that could contribute up to US$20 million towards preparing high-impact infrastructure and industrial projects in South Africa and the wider Southern African region.

Under the framework signed in Cairo on 18 September 2026, each institution can contribute up to US$10 million. The facility is designed to support projects before they reach conventional project finance, covering the technical, financial and legal work needed to address bankability constraints. Priority areas include power and energy, including energy-transition projects, transport and logistics, information and communications technology, and strategic-minerals beneficiation.

The headline amount is modest relative to the scale of Africa’s infrastructure requirements. That is precisely why the facility matters.

Its purpose is not to finance a power plant, railway, data centre or mineral-processing facility outright. Its purpose is to improve the quality of the projects competing for the much larger pools of debt, equity, blended finance and institutional capital that become available once a project has been properly structured.

The Capital Problem Starts Before Financial Close

Infrastructure investment in Africa is often described primarily as a financing problem. The shortage of long-term capital is real, but the investment pipeline has another constraint: projects frequently reach the market before they are sufficiently prepared for investors or lenders.

The Development Bank of Southern Africa says there is, on average, an eight- to nine-year gap between project identification and implementation for projects requiring funding. Its project-preparation work is intended to shorten that cycle by identifying risks early, developing feasibility studies, structuring transactions and helping sponsors move towards financial close.

Infrastructure South Africa's current pipeline provides a more immediate illustration. More than 24 infrastructure projects with an estimated capital value of R148 billion are receiving project-preparation support, covering energy, water and sanitation, transport, social infrastructure, human settlements, municipal infrastructure, industrial development zones and digital infrastructure. Fifteen supported projects have already completed their preparatory work.

The government has also committed R600 million to project-delivery support, with the third project-preparation bid window opened in July 2026 for qualifying public-sector projects valued at R1 billion or more. The programme is explicitly aimed at addressing incomplete feasibility studies, unresolved approvals, unclear funding structures and other barriers that prevent projects from moving from planning into implementation.

The Afreximbank-DBSA facility therefore enters an existing preparation ecosystem rather than creating one from scratch.

Its significance is the combination of two institutions with complementary mandates and the potential to connect project preparation with downstream financing and regional trade.

Why the Facility Is Larger Than Its US$20 Million Ceiling

The US$20 million maximum commitment should not be interpreted as the amount of infrastructure investment the facility will finance.

Instead, it is upstream risk capital.

A project developer may have a credible infrastructure concept but still need engineering studies, demand assessments, environmental and social assessments, financial modelling, legal structuring, procurement advice, transaction advisers or other specialist work before lenders and equity investors can properly assess it.

DBSA's existing project-preparation framework covers precisely these functions, including feasibility studies, adviser procurement, project-risk identification, financial structuring and preparation for implementation.

Afreximbank has operated a similar upstream model since launching its Project Preparation Facility in 2018. Its facility was designed to support projects from the conceptual stage through bankability and can finance activities including feasibility studies, transaction advisers, project managers and fundraising or marketing expenses.

The new JPPF brings the two institutions together at this critical point in the investment chain.

The potential multiplier is therefore downstream.

A well-prepared project may subsequently seek financing from Afreximbank or DBSA, but it can also be presented to private investors, other development finance institutions and commercial lenders. Each downstream transaction remains subject to its own appraisal and approval.

That distinction is important.

The facility does not guarantee that a project will be financed. It increases the probability that a serious project can reach the point at which financing can be evaluated on commercial, technical and risk-adjusted terms.

South Africa Gives the Partnership an Immediate Pipeline

The timing of the agreement is significant.

South Africa formally joined Afreximbank in February 2026, becoming the institution's 54th member state. Afreximbank announced a US$8 billion Country Programme for South Africa, aimed at supporting industrial development, regional supply chains, trade and investment.

The JPPF is one of the first operational mechanisms to follow that accession.

It also builds on the Master Risk Participation Agreement signed by Afreximbank and DBSA in February, which created a risk-sharing framework intended to expand trade-finance capacity and support regional value chains. The new project-preparation agreement moves the relationship further upstream, from sharing financing risk to helping create the transactions that could eventually require financing.

That creates a potentially important sequence:

Project identification → preparation → bankability → financing → construction → trade and industrial activity.

Afreximbank's trade mandate and DBSA's infrastructure expertise therefore meet at the project-development stage.

The commercial question is whether that institutional combination can produce a pipeline large and credible enough to attract substantially more capital than the preparation facility itself.

The Sector Focus Reveals Where Deal Flow Could Emerge

The priority sectors provide an early indication of the types of transactions likely to emerge.

Energy

Power and energy remain central because inadequate and unreliable electricity continues to constrain industrial expansion across the region.

The facility's inclusion of energy-transition projects also creates potential scope for renewable generation, transmission, storage and other infrastructure required to reshape the region's power systems.

Transport and Logistics

Transport infrastructure is directly connected to Afreximbank's trade mandate.

Projects involving ports, rail, roads, border infrastructure and logistics platforms can potentially generate returns through user charges while also reducing the cost of moving goods across borders.

This is particularly relevant to AfCFTA-linked trade corridors, where infrastructure quality can determine whether formal trade integration translates into physical commercial integration.

ICT

Digital infrastructure creates another class of capital-intensive projects, including fibre networks, data infrastructure and connectivity systems.

The investment case is increasingly connected not only to telecommunications but to cloud computing, digital services and emerging AI-related infrastructure demand.

Strategic Minerals Beneficiation

This may ultimately be one of the most consequential components of the facility.

The focus is not simply on extracting minerals but on beneficiation, increasing the amount of processing and economic value captured within African economies.

That creates potential transaction opportunities around processing plants, power supply, transport corridors, industrial parks and associated logistics infrastructure.

The challenge is that beneficiation projects typically require coordinated infrastructure, long-dated capital and credible offtake arrangements. Project preparation can determine whether those components can be assembled into a financeable structure.

The Southern African Pipeline Already Has Multiple Preparation Channels

The new facility is entering a region where project preparation is already becoming a defined part of infrastructure finance.

The SADC Project Preparation and Development Facility, implemented through DBSA, supports feasibility studies, advisory services and other preparation activities for regional infrastructure projects. Its eligible sectors include energy, transport, water and sanitation, and ICT. The facility has already supported projects including the Angola-Namibia transmission interconnector, cross-border water projects and transport infrastructure.

The Afreximbank-DBSA facility therefore should not be viewed as a replacement for existing preparation mechanisms.

Its potential value is in additional capacity, institutional coordination and access to downstream capital.

That matters because preparation facilities can otherwise become fragmented: one institution funds feasibility work, another supports project development, another provides concessional capital, and a commercial bank eventually evaluates the financing.

The stronger model is one in which preparation is designed from the beginning with the eventual capital structure in mind.

The Real Test: Conversion, Not Commitments

For investors tracking African infrastructure, the critical metric will not be the US$20 million headline.

It will be the number and value of projects that move through the pipeline.

A successful facility should eventually produce measurable movement from:

Concept → feasibility → transaction structure → procurement → financial close → construction.

The distinction is important because Africa already has no shortage of announced infrastructure ambitions.

The African Development Bank's 2026 economic outlook notes that Africa mobilised roughly US$6 billion in private participation in infrastructure in 2024, compared with substantially higher volumes in other major developing regions. The report points to structural constraints including elevated risk premiums, implementation capacity and the availability of well-prepared, bankable project pipelines.

At the continental level, the NEPAD Infrastructure Project Preparation Facility reported in July that over two decades it had approved 114 grants worth US$124.67 million, helping mobilise more than US$13 billion in downstream investment across transport, energy, water and ICT.

Those figures illustrate why preparation capital can be strategically significant even when it is small relative to construction finance.

The question is whether each dollar of preparation produces a project capable of attracting substantially larger amounts of investment.

 

What Investors Should Watch Next

The next stage of the Afreximbank-DBSA facility is therefore likely to be more revealing than the signing itself.

The first signal will be project selection.

Which projects are jointly originated, screened and prioritised will indicate whether the facility is being used primarily for conventional public infrastructure or whether it can identify commercially structured projects capable of attracting private capital.

The second signal will be transaction readiness.

Projects should move beyond feasibility studies towards identifiable sponsors, revenue models, procurement structures, risk allocation, regulatory approvals and prospective sources of capital.

The third will be financial close.

A project reaching bankability is not the same as a project receiving financing. The ultimate test will be whether projects prepared through the JPPF progress into transactions involving Afreximbank, DBSA, commercial banks, infrastructure funds, institutional investors or other DFIs.

The fourth will be regional connectivity.

The strongest transactions may not be projects confined to one national market. Power interconnectors, trade corridors, logistics platforms, digital networks and mineral-processing chains can create economic value across several jurisdictions and fit more directly with the AfCFTA agenda.

The Deal-Flow Implication

The Afreximbank-DBSA agreement points to a broader change in how African infrastructure investment is being approached.

The shortage is increasingly being addressed not only by asking where the money will come from, but by asking which projects are sufficiently prepared to receive it.

That distinction moves project preparation from a technical prelude to financing into a strategic part of the investment pipeline.

For Afreximbank, the facility creates an upstream mechanism for identifying projects that can advance trade, industrialisation and regional integration.

For DBSA, it adds another source of capital and institutional cooperation to a project-preparation model already embedded in its infrastructure mandate. For sponsors, it potentially reduces the cost and complexity of moving a credible project towards bankability.

For investors, however, the measure will ultimately be conversion.

The most important development to watch is not another project announcement. It is the emergence of financeable transactions.

If the facility can repeatedly turn credible concepts into projects with completed studies, defined risk allocation, viable revenue structures and identifiable financing routes, its US$20 million ceiling could become the beginning of a much larger investment pipeline.

That is the real deal-flow story: the capital needed to prepare the deal may be small, but the quality of preparation can determine whether the much larger deal ever happens.

Sources