Construction & Major Projects · February 2026 · 5 min read
The three exposures every African megaproject leaves unpriced
Post-mortems on African megaprojects are unusually consistent. The overruns rarely come from the risks the base case listed. They come from three exposures that were named in the risk register, left unpriced, and then materialised in exactly the way the register warned they might.
The argument
Those three exposures are FX pass-through on imported rolling stock or equipment, utility-relocation lead time sitting outside the main works contract, and land-acquisition timing dependent on political cycles the sponsor does not control. Each is straightforward to price with a Monte Carlo calibrated to comparable programmes on the continent. Doing so typically moves the downside completion date and capex materially — numbers that reshape the risk-allocation memo lenders see.
What we see in the field
On an illustrative metro programme approaching financial close, running the schedule as a Monte Carlo across those three drivers moves the downside completion date materially. That number, not the base case, is typically the one that makes a syndicate willing to close.
What it changes
For sponsors, an unpriced risk register is worse than none — it creates the illusion that the exposures are managed. For lenders, the risk memo that names distributions rather than adjectives is the one that supports a tighter pricing.
Where to start
Before the next financial close, price the three exposures above as distributions and report the downside capex and completion date alongside the base case. Re-allocate the deltas explicitly between authority, contractor and lender.
