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The Board of Directors of the African Development Bank (AfDB) Group, has approved an equity investment of US 20 million to mobilise private capital for infrastructure development across the continent.
The bank, in a statement on its website, said that the fund was part of Africas 50 Infrastructure Acceleration Fund I.Advertisement
Africa50 Infrastructure Acceleration Fund I is a panAfrican infrastructure private equity fund that is mobilising up to US500 million for investment.
The fund is also meant to ensure value creation in strategic infrastructure sectors which included power, energy, digital and social infrastructure, transportation, logistics, and water and sanitation.Advertisement
According to the statement, the fund is sponsored by Africa50, an infrastructure investment platform established by governments and the bank .
Africa50 brings infrastructure project development and financing under one umbrella.
It has a strong track record of investments in the private sector and of projects undertaken under the PublicPrivatePartnership (PPP) framework.Advertisement
The mobilisation of private capital is critical to closing the infrastructure financing gap in Africa.
This is especially given the limited fiscal space of African governments which currently provide the largest source of infrastructure funding in Africa.Advertisement
The fund was established as a vehicle to help execute Africa50s mandate of mobilising private capital and accelerating further investment flows into African infrastructure by targeting private and institutional investors, it said.
The AfDBs Director for the Industrial and Trade Development Department, Abdu Mukhtar, said the Banks investment in the Fund underlined its strategic nature.Advertisement
According to Mukhtar, this shows that the Bank prioritises investing in strategic infrastructure sectors that contribute to closing Africas infrastructure financing gap (estimated at US 68 billion to US 108 billion annually).
The Banks investment will support Africa50 to crowdin private capital into African infrastructure through a private equity fund vehicle that private investors better understand and are more comfortable investing in, Mukhtar said.Advertisement
The AfDBs Director for Energy Financial Solutions, Policy and Regulations, Wale Shonibare, said the Banks support for the Africa50 Infrastructure Acceleration Fund I aligned with its High Five objectives.
It also strengthens the Banks already existing partnerships with the Africa50 Group on initiatives such as the African Sovereign Investors Forum and the Alliance for Green Infrastructure in Africa, Shonibare added.Advertisement
The Chief Executive Officer (CEO) of the Africa50 Group, Alain Ebobiss, said We are highly appreciative of the AfDBs support for the Africa50 Infrastructure Acceleration Fund I.
We look forward to continuing to work collaboratively with the African Development Bank and other investors to make a meaningful contribution to improving the infrastructure landscape on the continent.
By leveraging private capital for infrastructure investment, the Africa50 Infrastructure Acceleration Fund I can help create jobs, strengthen healthcare access, improve education access through digital technologies.
It will enhance access to financial services and financial inclusion through fintech investments, and reduce the impact of climate change.
According to the chief executive, the fund is projected to create 3,278 fulltime equivalent jobs over the period 20232035, including 1,676 jobs for women.
He said the fund was expected to contribute to fostering regional integration through improvements in transport and logistics infrastructure that can lead to increased inter and intraregional trade.
The AfDB and partners in the new fund will continue to provide growth capital and infrastructure equity to support the urgent need towards accelerating private sector funding and bridged the infrastructure financing gap on the continent. Advertisement
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