Leveraging Infrastructure Investments for Development
To be beneficial for a country’s development, non-renewable resource extraction should be leveraged to build long-term assets, such as infrastructure, that will support sustainable and inclusive growth. This is especially critical for countries facing an infrastructure-funding gap (the World Bank’s Africa Infrastructure Country Diagnostic has estimated that Africa faces an annual infrastructure funding gap of US$31 billion); leveraging extractive-industry related investment could help fill this gap. Historically, natural resource concessionaires have adopted an enclave approach to infrastructure development, providing their own power and transportation services to ensure that the basic infrastructure needed for their operations is reliably available. The initial phase of this project consisted of a worldwide survey of case studies on rail, port and power infrastructure. A first working paper delivers the findings for mineral railways and ports. A second working paper extends the research to power infrastructure.
To further develop the results of the initial study, VCC signed a contract with the World Bank in October 2012 consisting of assessing the energy demand from the mining industry by 2020 in Sub-Saharan Africa, identifying the different power sourcing options and understanding the different institutional arrangements that have the potential to lead to better integration between companies’ investment plans in power infrastructure and governments strategic development plans for countries.
Also, in 2013, the VCC was granted an award from AusAID to develop an economically, legally and operationally rational framework to enable shared use of mining-related infrastructure (rail, ports, power, water, internet and telecommunications). The framework will be obtained by distilling best practice principles from infrastructure developments around the world, guided by expert opinion. It will be tested in Liberia, Mozambique, and Sierra Leone but will be generally relevant to the African region.