This paper studies the appropriate financing structure of infrastructure investment in Africa. It starts
with a description of recent initiatives to scale up infrastructure investment in Africa. The paper then
uses insights from the literature on informed versus arm’s length debt to discuss the structure of
infrastructure financing. Considering the differences in investors’ preferences that Africa faces, the
paper argues that continent’s success to fill its greenfield and, hence, risky infrastructure gap is a
delicate balancing act between development banking and institutional long-term investment. In a
first phase, development banks that have both the flexibility and expertise should help finance the
riskier phases of large greenfield infrastructure projects. In a second phase, development banks
should disengage and offload their mature brownfield projects to pave the way for a viable engagement
of long-term institutional investors such as sovereign wealth funds. In order to promote an
Africa-wide infrastructure bond market where the latter could play a critical role, the enhancement
of Africa’s legal and regulatory framework should, however, start now
