The fund is intended to help narrow Africa’s infrastructure spending gap, building on Africa50’s existing portfolio of major projects across the continent.
Investment platform Africa50 said agreements had been signed by stakeholders in preparation for the first close of its private equity Infrastructure Acceleration Fund (IAF), which aims to raise a total $500m to invest in African energy, transport, telecommunications and water projects.
The fund has attracted 17 African stakeholders, including sovereign wealth funds, development finance institutions (DFIs), banks, pension funds, asset managers and retirement agencies, as well as two international Institutional Investors.
Africa50 told Impact Investor the group includes Nigeria Sovereign Investment Authority, Arab Bank for Economic Development in Africa, West African Development Bank, CDC Sénégal, CDC Benin, CNSS Togo, CDG Invest and Attijariwafa Bank of Morocco. It did not supply the names of the rest of the stakeholder group.
The investment platform is hoping to attract further African and international investors to the fund, with more organisations expected to join the group by first close. No date has been given for first close, but it is expected “soon”, according to the organisation.
The fund is a 12-year close ended infrastructure private equity fund which aims to mobilise large-scale and long-term institutional capital. It aims to make “attractive” risk-adjusted returns for investors through equity and quasi-equity investments, mainly by taking majority stakes in African infrastructure projects.
It is the latest initiative from Casablanca-based Africa50, which was established to invest in and develop bankable projects, following a call by African leaders in 2012 to find mechanisms to bridge Africa’s infrastructure funding gap. Africa50 currently has 34 shareholders, comprising 31 African countries, the African Development Bank (AfDB), the Central Bank of West African States (BCEAO), and Bank Al-Maghrib.
The fund plans to leverage Africa50’s Project Development and Project Finance vehicles for its investments. At first close IAF will buy seed assets from Africa50’s existing investment portfolio at an independently set valuation, according to Africa50.
AfDB president Akinwumi Adesina said at the signing ceremony in Lomé, Togo, that it was “remarkable and unprecedented” for 17 African institutions to participate in this type of African infrastructure fund. “I strongly believe that for African institutional investors, this is the time to change the investment narrative on Africa,” he said, adding that, with the fund, the Africa50 group was in a position to play a leading role in redirecting a larger share of global assets under management – estimated to be more than $100trn – to the continent.
Africa50 has invested in critical infrastructure with a total value of more than $6.6bn during six years of operations. Its portfolio to date includes investments in major infrastructure projects, including the 461-megawatt Azura-Edo independent power producer in Nigeria in 2019, the Kenya Transmission Project on a public-private partnership basis in 2022, the 420MW Nachtigal Amont hydropower plant in Cameroon, and part of the huge Scatec Egypt solar power complex among other investments.
The AfDB has also been active elsewhere in the impact investment sphere recently, signing a partnership agreement with ILX Management to support the Dutch-based fund manager’s $1.05bn emerging markets-focused private credit fund and its future funds.