Project Concept Note

1. Project Concept Note (PCN)
A Study on Establishing a ‘Proof-of-Concept’ for Developmentally
Sound High Impact Infrastructure Projects that Enhance Global
Prosperity

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1. Project Title
A Study on Establishing a ‘Proof of Concept’ for Developmentally Sound High Impact
Infrastructure Projects that Enhance Global Prosperity.
2. Project Purpose
This study will outline effective guidelines for implementing sustainable
infrastructural projects in Nigeria.
3. Implementing Agency
Crown Agents
4. Project Duration
Project Start Date: November 15, 2016
Project End Date: May 26, 2017
5. Background
This concept note is for a study that will lead to the development of a ‘proof of
concept’ for infrastructural projects in Nigeria. Infrastructure development is the
basis of measuring the performance of democratic leaders and it is the foundation of
good democratic governance. Demand for infrastructural development is higher and
resources used in provision of infrastructure are limited. Ethnic-interest agitation and
lobbying are common things in democratic governance. The military era in Nigeria
was for the most part of the economic boom and only succeeded in widening the
gap in infrastructure demand and provision. Most infrastructures are now decayed
and need repair or replacement. Government is the system that organizes and
sensitizes the people of an area in other for all to have an acceptable community.
Government have the power to put in place all measures that it deems fit will make
an environment conducive for living for everybody. Infrastructure development in
democratic governance involves identifying the right project, carrying out feasibility
and viability studies and carrying out physical development of the project. The
challenges are numerous and include finance, technology for development,
maintenance and design. The challenges also include international requirements of
project to be sustainably developed.
Infrastructure is central to Africa’s development. Deficiencies in infrastructure are
holding back the continent considerably by at least 1 percentage point in per capita
growth. Africa’s largest infrastructure deficit is found in the power sector, which
delivers only a fraction of the service found elsewhere in the developing world. The
countries in Sub-Saharan Africa generate the same amount of power as Spain alone.

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To fund infrastructure, Nigeria needs about $4billion every year, out of which $10
billion should come from the federal level; currently the country’s spending on
infrastructure is about $30 billion.1
Although Nigeria needs an estimated US$30bn to
bridge its infrastructure deficit, there is need for any investment in infrastructural
projects to be accompanied by a detailed “proof of concept”. In Nigeria,
infrastructural projects often fail to meet the needs of the citizenry due to the lack of
a properly-developed proof of concept at the design phase of such projects. To this
end, this study seeks to develop a cross-cutting proof of concept for infrastructural
projects in Nigeria.
There has been considerable investment in support for infrastructure project
preparation in Africa and substantial work done to assess these facilities and their
effectiveness. We will recognise earlier work and build on it by objectively distilling
information on best practice in project preparation, and complementing it with our
team’s practical experience with managing complex cross-cutting infrastructural
projects.
The UK (i.e. through the FCO) is the best donor for this project considering its
longstanding interests in Nigeria. Nigeria is a country where Britain has comparative
advantage, “added value” to offer, and strong diplomatic presence. The Crown
Agents’ research team will also leverage on existing projects and programs being
implemented by DFID (i.e. Nigeria Infrastructure Advisor Facility) to fulfil all the
expected results of this study.
5.1 Justification for the Study
Infrastructure has been responsible for more than half of Africa’s recent improved
growth performance and has the potential to contribute even more in the future.
Current infrastructure networks, however, increasingly fall behind those of other
developing countries and are characterised by missing regional links and a lack of
household access.
Developing a ‘proof of concept’ for infrastructural projects’ will help to unlock the
potential for countries to develop high-quality infrastructure projects that are
attractive to market investors. Consequently, this study can contribute to ongoing
attempts to bridge the infrastructure gap that continues to constrain economic
growth across the continent. Furthermore, one of the outputs of this study is to
establish guidelines for private sector involvement in project preparation. In so
doing, the programme can provide a genuine boost for countries, especially
developing nations, to reach the level of investment needed for them to achieve
sustained economic development and a consequent reduction in extreme poverty.
Indeed, a key action from the Addis Ababa Action Agenda, was driven by the
1 National Integrated InfrastructureMasterplan (NIIMP)

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recognition that “investing in sustainable and resilient infrastructure for all is a pre-
requisite for achieving many of the Sustainable Development Goals (SDGs)”. Given
the broad nature of infrastructural development, the case studies for application of
the ‘proof-of-concept’ to be developed from this study are as follows: water and
sanitation; transportation (i.e. road networks); and waste management. These sectors
align to the current economic development priorities of the current administration.
This project fits with one of the FCO’s priority areas namely: “improving the business
climate”. Poor infrastructure –such as inadequate electricity supply and poor road
networks- intensifies the difficulties of doing business in Nigeria.2
6. Theory of Change for the Study
The results of this study would lay the foundation for sustainable infrastructure
projects in Nigeria. Essentially, this study will narrow the gap between the Nigerian
government and private sector expectations when it comes to investment in
infrastructural projects, i.e. increase private sector participation in infrastructural
investments in Nigeria. During this study, Crown Agents will develop a strategy to
improve dialogue between public and private sectors, making use of existing toolkits.
In so doing, this study will equally develop a framework for de-risking infrastructure
financing in Nigeria while improving the poor’s access to vital services.
2 World Bank (2016) DoingBusiness in Nigeria Report

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6.1 Project Outputs and Results
This section of the PCN outlines the outputs, activities, and activity performance indicators for the project (see Table 1). Table 2
outlines the project outputs and activity performance indicators.
Table 1: Project Outputs and Activities
Outputs Target Activities Activity Performance Indicators
Output 1: Inception Report i. Hold project initiation consultations with FCO and
other relevant stakeholders to define and agree on
the scope of the study.
ii. Develop questionnaires and interview guides for
the study.
iii. Establish modalities for project coordination
meetings
i. Scope of the study finalized.
ii. Questionnaires and interview guides for the study
developed.
iii. Modalities and frequency of project coordination
meetings agreed.
Output 2: Draft reports
covering the scope of the study
i. Draft literature review on the challenges of
infrastructural development in Nigeria.
ii. Guidelines for sustainable infrastructure
development in Nigeria.
iii. Review of existing PPP frameworks in Nigeria.
iv. Proof-of-concept for sustainable infrastructure
projects in Nigeria.
v. Draft framework for increasing private sector
participation in infrastructure development in Nigeria.
vi. Draft framework for the creation of ‘Nigeria
Infrastructure Advisory Group’.
i. Number of reports produced.
ii. Number of frameworks produced.
iii. Number of stakeholders sampled in the study.
Output 3: Final Research
Reports
i. Final report on review of all literature and
documents dealing with the challenges of
infrastructural development in Nigeria.
i. Number of reports produced.
ii. Number of frameworks finalized.
iii.Nigeria Infrastructural Advisory Group established.

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ii. Final guidelines for sustainable infrastructure
development in Nigeria.
iii. Final report on the review of existing PPP
frameworks in Nigeria.
iv. Final crosscutting “Proof-of-Concept” for
sustainable infrastructure development in Nigeria.
v. Final framework increasing private sector
participation in infrastructure development in Nigeria.
vi. Establishment of Nigeria Infrastructure Advisory
Group.

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7. Project Risks and Mitigation Strategies
This section of the PCN outlines some of the possible risks that may be encountered
during the course of this study alongside indicative mitigation strategies.
Table 2: Project Risks and Risk Mitigation Strategies
s/n Risks Risk Mitigation
1 Unavailability of meaningful
documents for the study.
i. Leverage on our existing relationship with DFID
to obtain relevant documents and information
from the NIAF.
ii. Leverage on other similar studies done in SSA
to develop the literature review chapter for this
study.
iii. Leverage on out knowledge of the public
sector landscape –especially government MDAs-
to source for information for the study.
2 Delays in accessing relevant
stakeholders who form the sample for
the questionnaires and Key Informant
Interviews (KIIs).
i. Time lags –especially in relation to accessing the
sample for the interviews and questionnaires-
have been accommodated in the proposed
duration for the study.
ii. Leverage on FCO and DFID’s existing
relationship to access relevant stakeholders for
the study.
3 Emerging challenges may affect the
agreed scope of the study.
i. Any change in the scope of the study will first
be discussed and agreed with FCO before
proceeding.
8. Crown Agents: Track Record in Infrastructure-Related Studies
Our team for this study is exceptionally strong. Adam Wood, Team Leader, is the
former Africa Director for the FCO; Dianne Rudo is a global infrastructure project
finance expert and former Vice President of US Exim Bank; Dev Useree is a Public
Finance and Investments expert. Project Manager, David Cornish, successfully
delivered a similar scoping study analysing Africa’s infrastructure needs to DFID in
2015-16. We can draw upon our advisory panel’s expertise, including representatives
of PIDG, PPIAF, Standard Chartered and Barclays, chaired by Jim Drummond, former
DFID Director – Africa, West and South. Ian Shapiro (former DFID Head of Private
Sector, managing UK’s major infrastructure investments) and Tim Yapp (partner, lead
for PIDG/HANSHEP at MDY) will serve as Project Directors. Some of our notable track
records in infrastructure-related technical assistance include:
 Regulation of Water Supplies and PPP, Nigeria (2005-2007): The Nigerian
Federal Ministry of Water Resources instructed Crown Agents to assist it with
its National Urban Water Sector Reform Project (NUWSRP). Crown Agents

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were responsible for reviewing the local water regulations with a view to the
accommodation of private sector partnerships in the Nigerian water sector.
 Nigeria Expanded Trade and Transport Programme (NEXTT) (201202016):
NEXTT is designed to support the Nigerian government’s efforts to expand
trade domestically within the Economic Community of West African States
(ECOWAS). This support is being provided through addressing trade
facilitation constraints and improving the quality of transportation on a
corridor considered critical for national and regional food security. Crown
Agents is engaged in technical support on transport corridor improvements,
as well as supporting the Federal Ministry of Trade and Investment (FMTI).
 Kigali Bulk Water Supply Project, Rwanda (2015-2016): the legal team of
Crown Agents advised the Private Infrastructure Development Group on a 27-
year concession on a Build, Operate, and Transfer basis under which the
concessionaire is required to design, construct, finance, operate and manage
water production and treatment facilities to deliver up to 40,000 m3/day.
 In 2013, Crown Agents –with support from UKAID under PDF I- conducted a
study on “the environment of port reform in Nigeria with a focus on the
following areas: port performance; concession agreements; and customs and
trade facilitation”. The final research report was submitted to the Presidential
Committee on Port Reform.
 Feasibility study for the ratification of the TIR (transit) Convention in Kenya.