Funding Infrastructure Projects in Africa
The need for infrastructure improvements in Africa is critical. Untold
numbers of businesses suffer for lack of reliable power for industrial
processes or because of it costs far too much to get their goods to the
market. At the most basic level, millions of lives are threatened every
day for lack of clean water or safe sanitation.To help address these challenges, IFC is investing $100 million in the Africa Infrastructure Investment Fund 2, an equity fund that will promote the development of basic infrastructure in the region.
The fund plans to raise $600 million to $1 billion to invest in unlisted equity and equity-like infrastructure investments in Sub-Saharan Africa. It will take significant stakes in a range of infrastructure projects including toll roads, wind power farms, and other renewable energy projects, ports, water and sewerage utilities, and social infrastructure.
Joint Venture
The fund, known as AIIF2, was established by African Infrastructure Investment Managers Proprietary, a joint venture between Macquarie Africa, part of the Macquarie Group, and the Old Mutual Investment Group, which will advise the fund on investment matters.
“AIIF 2 is a vital addition to the pool of specialized African infrastructure equity capital,” said Andrew Johnstone, Managing Director of African Infrastructure Investment Managers. “It will facilitate the development and sustainable operation of a number of infrastructure projects, which are critical to accelerating Africa’s development.”
Key Priority
Supporting improvements in infrastructure is a key priority for IFC in Africa. IFC’s strategy focuses on is helping develop assets such as a reliable power supply and transport networks such as roads, which are essential for economic growth and sustainability and for improving the quality of life of the people living within and across the communities they serve.
In addition to investing in funds as AIIF2, IFC supports the development of infrastructure in Africa by investing directly in infrastructure projects and pursuing advisory mandates to create commercially viable structures to further develop infrastructure.
For example, in March IFC committed $750,000 to Comasel de St Louis, Senegal, a wholly-owned subsidiary of Morocco's electricity utility, the Office National de l’Electricité, for a project that will use a mix of grid connections and individual solar kits to bring power to 20,000 rural households in 300 villages. And earlier this fiscal year, IFC completed an advisory mandate for the government of Benin that led to a a 25-year concession agreement with France’s Groupement Bolloré to build and operate the South Wharf Container Terminal at the Prot of Cotonou.
For more information contact:
Houtan Bassiri
Communications Officer
Nairobi, Kenya
Tel: +254 20 275 9436
Email: hbassiri@ifc.org
