Poor project preparation blocks Africa from tapping $2tn institutional capital
SeedTree Capital’s Bowale Odumade argues that Africa’s infrastructure deficit is driven by a lack of bankable projects rather than a shortage of capital, signaling a need for structural reforms in project preparation to unlock domestic institutional funds.
Africa’s infrastructure deficit is constrained by a lack of bankable projects rather than a shortage of funding, according to SeedTree Capital chief executive Bowale Odumade. He argues that the continent must prioritize early-stage project preparation to unlock its massive domestic investment pools and attract long-term institutional capital.
Domestic pension funds, insurance companies, and sovereign wealth funds collectively hold more than $2 trillion in long-term assets. Historically, the vast majority of this capital has been directed toward government securities, with less than three percent allocated to physical infrastructure development.
Odumade notes a structural shift as regulatory frameworks evolve to accommodate alternative investments and credit enhancement mechanisms de-risk assets. This transition is critical for investors seeking to deploy patient capital into markets where regional integration under the African Continental Free Trade Area is expanding cross-border opportunities.
Securing financial close requires projects to be structured so that lenders can accurately price risks in an environment where capital is increasingly expensive. Environmental, social, and governance factors are now integrated directly into investment risk management rather than treated as post-approval compliance exercises.
The primary bottleneck remains early-stage execution, encompassing feasibility studies, technical design, commercial structuring, and stakeholder engagement. Without this foundational preparation, projects fail to reach investment readiness, rendering broader discussions about financing largely academic and deterring commercial sponsors.
Public-private partnerships only succeed when they feature sustained political commitment, appropriate risk allocation, and genuine alignment on long-term outcomes. Because infrastructure investments typically span 20 to 30 years, investors require regulatory consistency that survives political transitions to justify capital deployment and price measurable risks.
Energy and transport logistics present the most urgent opportunities, with nearly half of the population still lacking reliable electricity and requiring massive supply chain upgrades. To capitalize on these sectors and bridge the gap between developmental impact and commercial returns, Odumade recommends that governments make project preparation a mandatory line item within every national infrastructure budget.
Where commercial viability alone is insufficient to attract private capital, blended finance solutions can bridge the gap. Utilizing grants, concessional funding, and viability gap financing helps preserve investment discipline while ensuring that developmental impact and commercial returns reinforce each other.
