* World Bank investment arm to lend up to $5 bln in Africa
* Working on power projects in Ivory Coast, Senegal
* IFC confident Simandou iron ore project will progress
By Daniel Flynn
DAKAR, May 12 The World Bank's investment arm
will increase lending to sub-Saharan Africa by up to a quarter
this year as private sector companies flock to the fast-growing
region, its vice-president said.
Jean-Philippe Prosper said the International Finance
Corporation (IFC) would make new investments of between $4.5 and
$5 billion for the fiscal year ending in June, up from $4
billion the previous year.
The least developed continent is experiencing an economic
growth surge, outpacing global averages. The World Bank sees
Sub-Saharan Africa's GDP accelerating to more than 5 percent
over three years, driven by investment and commodity prices.
Prosper said projects to upgrade infrastructure for the
region's 1 billion people were attracting yield-hungry
investors, while governments were keen to share the costs to
free budget resources for poverty relief.
"In the past, nobody wanted to talk about Africa ... Now
more people are coming," Prosper told Reuters. "We would not be
able do this level of financing without private sector projects.
We did not invent these projects ourselves."
Roughly half the IFC's annual lending in the region goes to
financial markets and institutions to help improve the flow of
credit to small businesses, which employ most of Africa's
Another third goes to infrastructure projects - mostly
transport and electricity - and natural resources investments.
The IFC holds a 5 percent stake in the giant Simandou south
iron ore project in Guinea, managed by Rio Tinto, which
was due to start production in 2015 but has been hit by lower
iron prices and political and regulatory concerns.
Prosper, who met Guinean officials last week, voiced
confidence the $15-$20 billion project would go ahead. There
have been doubts the government can finance its 51 percent stake
in a 700 km (430 mile) railway and offshore loading berth.
"Our discussions were extremely positive. There was interest
from government officials to go ahead with the project," he
said. "Simandou is a good test. If it works, you will be amazed
by the level of investment which will follow in Guinea."
Post-conflict recovery in Ivory Coast, the economic
powerhouse of francophone West Africa, was helping to revive
investor appetite for the region, Prosper said. The economy of
the world's largest cocoa producer grew 9.8 percent last year as
it recovered from a civil war after disputed 2010 elections.
The IFC provided $135 million for the 139 megawatt expansion
of the Azito power station, near commercial capital Abidjan, and
organised the remaining $277 million of funding for the project.
In Senegal, it is now assessing an investment in the 70
megawatt Tobene power plant, with a cost of $150 million. "Power
is the main constraint to investment in Africa," said Prosper.
To help deepen financial markets, the IFC has made shelf
listings for local currency bonds in a number of countries
including Tanzania, Kenya, Zambia and Rwanda. It recently issued
a five-year naira bond in Nigeria, worth some $50 million.
"Zambia and Rwanda are probably quite close to the point
where we might do something. But we don't want to issue bonds
just to issue bonds. We want to make sure we are going to do
something with them," Prosper said.
(Reporting by Daniel Flynn; Editing by Catherine Evans)