The World Bank has approved $425-million in International Development Association (IDA) financing to support infrastructure projects in East and southern Africa in the power sector, transport, logistics and social sectors.

In a statement dated Tuesday, the bank said the regions suffered from ailing infrastructure, especially in the power sector, where effective generation was 20-30 percent less than the installed capacity due to drought, lack of maintenance as well as general system losses of electricity in both transmission and distribution.

Such deficits caused a loss of about two percent in gross domestic product growth in most of the countries and impeded access to energy for a large part of the population, the World Bank said, adding that heavy public financing of infrastructure was contributing to rising debt, with nearly half of the countries in the region in debt distress even before the outbreak of Covid-19.

"The Covid-19 pandemic threatens the development gains made over the past years," the bank's director of regional integration for sub-Saharan Africa, the Middle East and North Africa Deborah Wetzel said.

"The new operation will help address the long-term infrastructure funding gap through a regional approach focused on private financing, with the objective to mobilize about $975-million of private finance in addition to the funds provided by IDA. This requires a broader approach, including an enabling environment for private capital mobilisation, sound public debt management, bankable projects, long-term finance, and risk mitigation."

The World Bank’s IDA, established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programmes that boost economic growth, reduce poverty, and improve poor people’s lives.

It is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Annual commitments have averaged about $21-billion over the last three years, with about 61 percent going to Africa.