Development finance institutions (DFIs) and export credit agencies (ECAs) would play a bigger role in funding projects in Africa going forward, law firm Eversheds director Charles Marais said on Tuesday.

He noted that it was becoming more difficult for marginal projects to attract funding, while projects would also likely take longer to complete than before.

There was an extensive list of projects on the African continent, with "massive opportunity" for project financing, but there were also challenges to raising finance for projects as a result of the global economic slowdown.

While Africa has not suffered as much as some developed countries, it was not immune to the economic crisis, with the continent facing a flight of capital, low liquidity levels, impaired economic growth and less international aid.

Further, the cost of building vital infrastructure, such as roads, power infrastructure and ports to improve trade, would "far outstrip" foreign funding, Marais noted at the Infrastructure Project Finance Conference in Johannesburg.

This "pressing need" for infrastructure projects in Africa would not go away, but at the same time world banking would never be the same as it was before the economic crisis happened.

Marais emphasised that until commercial banks had reestablished their appetite for large underwriting opportunities, DFIs and ECAs would play an increasingly large role in the financing of projects.

He explained that perceptions of the bankability of projects has changed, noting that "last year's base case will not cut the mustard this year".

This meant that project developers would have to conduct more comprehensive feasibility studies, which would likely cost more. They would also have to ensure that they were incorporating an appropriate and competitive technology, while environmental concerns were also important.

Marais noted that environmental risks, such as something changing in the project or changes in environmental specifications, was becoming a larger consideration for financiers and sponsors.

Meanwhile, he also expected higher levels of sponsor support, such as guarantees and standby equity, to be required for developing projects in Africa, which could have a negative impact on returns.