Since 2002, the Private Infrastructure Development Group (PIDG) has drawn from $2.4bn of funding and commitments to invest where the needs are the greatest. PIDG companies, which work across the spectrum of the infrastructure development process, have distributed this support based on local-market needs, catalysing private-sector participation and creating development impact along the way.
It’s this last point – development impact – that PIDG’s Chair, Andy Bainbridge, returns to time and again in conversation about his role. He is passionate about integrating the crucial private sector leadership needed to make projects happen, and boosting economic growth for some of the countries that need it most.
Referring to infrastructure as “the critical enabler” Andy has this to say: “Infrastructure is fundamental to progress. However you think of development, however you think about the growth of the economy – it all comes down to, what infrastructure elements do you need to have in place in order to enable that to happen?”
Throughout the course of a conversation, Andy frequently returns to the everyday lives of the people infrastructure benefits: “Whether it’s the power that provides the ability to use an electric stove that stops people from using charcoal, or reduces the problem of people dying from carbon monoxide poisoning, whether it’s power that gives light that enables people to read and educate themselves, or the power that gives access to the internet and allows communities to school their children: Without the necessary infrastructure, things stall.”
A global career
Andy’s ground-up perspective is informed by a career spent working across the globe, mostly in banking, and most recently as Global Head of Commercial Clients and the Chief Risk Officer for the Western Hemisphere for Standard Chartered. He’s lived in Bahrain, Dubai, Singapore, South Africa, the U.K., and the U.S., and he’s done a significant amount of business in almost every worldwide region.
Andy says he knows well most of the markets PIDG works in. For him, that means “understanding the risks, understanding how the market behaves, understanding and knowing some of the participants, and being closely enough connected to be able to phone someone, who if they don’t know, will phone someone who does know and give you the true story.”
Andy has spent the last 20 years working in emerging markets. Highlights include leading a small Middle Eastern bank out of the teeth of the financial crisis.
“Let me requalify that – a small, illiquid bank in the banking crisis. Taking that bank from being illiquid and really quite scary through to being liquid and very safe – it was a journey I’d not like to do again, but coming out the back end, I thought, yeah, that was nice.”
“Afterward, one of the bank’s board members took me aside and said, ‘Thank you, Andy, you saved our bank.’ And that was several hundred jobs, and that was important.”
At the intersection of banking and infrastructure
It was in the mid-90s, when Andy first started working in the developing world, that the importance of infrastructure came onto his radar.
“It took me a while to recognise how important it was in terms of development and in terms of what it enables. It’s a whole series of interconnected industries that put in place the basics, the mechanics of how we live and develop.”
Today, he wishes more private investors would act on the possibility of making a high return while providing the critical capital their countries need to develop.
“There’s a lot of talk about long-term investors loving infrastructure assets because they pay out over 25-30 years. As a banker, I love the sound of this. But the quantum of what I see is really small compared to the amount of noise that they make about it. So I’d like to see more long-term investment, and I’d like to see it on a national basis.
“Infrastructure is a liability-matching asset for investors in a country. On a continent-wide basis, there tends to be more of a correlation between many local currencies than there often is between any single currency and the U.S. dollar. Obviously, this is a pretty general comment, but with some truth at its core. It’s an area I would like to see develop further.”
The role of the InfraCo companies in the infrastructure equation
Andy believes that PIDG and the InfraCo companies – InfraCo Africa and InfraCo Asia – have an important role to play in shining a light on opportunities for long-term investment.
He describes PIDG as “fundamentally innovative”.
“It’s a series of companies aimed, like rifle shots, at market failures. Think about the Emerging Africa Infrastructure Fund (EAIF), the first fund, doing 15-year money in Africa. No one did that when they started. GuarantCo – local currency financing of infrastructure. No one did that. I mean, GuarantCo was set up in its first incarnation just to see, just to prove the concept that local currency financing in infrastructure could be done.
“InfraCo Asia, like InfraCo Africa, has brought a fundamentally new dimension to the PIDG family because it makes projects happen that otherwise wouldn’t. There is a whole series of market failures, and the InfraCos are addressing the first in the chain of those market failures.
“You think about InfraCo Asia and InfraCo Africa and what they’re doing in terms of developing projects that the private sector will not develop because they don’t like the risk profile. And this, by its very nature, is innovative. And that’s exciting.”
What’s next for PIDG
When Andy talks about the future for PIDG, two words are on repeat: achieving scale.
“We’ve got a series of really interesting, really successful, but still sub-scale opportunities. I think PIDG as a whole enables you to harness the companies, seek further donor funding, seek private sector funding, and achieve scale.”
More streamlined decision-making, and more visibility for PIDG and its promise as an employer, are first on the agenda.
“I’d like people to think that PIDG can offer careers. I’d like them to think that this isn’t a series of companies with 10, 15, 20 people, but it’s a 150-person-strong body operating across multiple continents, and it’s a great place to work because you get to do a series of innovative things, and you get paid for it. What’s not to like about that?”
Andy’s 15-year-old daughter has already bought into the promise of PIDG’s work and potential. When Andy served as Chair of GuarantCo, a PIDG company, she defined his professional pursuits by this affiliation alone.
“My daughter, who is rather marvellous as far as I’m concerned, refused to tell her friends at school that her father worked for a bank. She said her father worked in development and talks about PIDG and GuarantCo. Because she’s really proud of that.”