The Board of Directors of the African Development Bank Group (AfDB) has granted approval for a $20 million equity investment in the Africa 50 Infrastructure Acceleration Fund I. This investment aims to mobilize private capital for infrastructure projects across the African continent.
The Africa 50 Infrastructure Acceleration Fund I is a pan-African private equity fund focused on strategic infrastructure sectors, including power, energy, digital and social infrastructure, transportation, logistics, and water and sanitation.
In a statement issued in Accra, it was revealed that Africa 50, an infrastructure investment platform established by governments and the African Development Bank, sponsors the fund. The platform aims to consolidate infrastructure project development and financing under one entity.
The statement highlighted Africa 50's successful track record of investments in the private sector through Public-Private Partnerships. It emphasized the importance of mobilizing private capital to bridge Africa's infrastructure financing gap, given the limited fiscal capacity of African governments, which currently provide the largest source of infrastructure funding on the continent.
The Africa 50 Infrastructure Acceleration Fund I was established to attract private and institutional investors and facilitate investment flows into African infrastructure. The African Development Bank's investment in the fund underscores its commitment to strategic infrastructure sectors that contribute to closing Africa's infrastructure financing gap, estimated at $68-108 billion annually.
Mr Abdu Mukhtar, Director for the Industrial and Trade Development Department at the African Development Bank, highlighted the significance of the Bank's investment in mobilizing private capital and expressed confidence in the private equity fund's appeal to private investors.
Mr. Wale Shonibare, Director for Energy Financial Solutions, Policy and Regulations at the African Development Bank, emphasized that the Bank's support for the Africa 50 Infrastructure Acceleration Fund I aligns with its High Five objectives.
He also mentioned the Bank's existing collaborations with the Africa 50 Group on initiatives such as the African Sovereign Investors Forum and the Alliance for Green Infrastructure in Africa.
The CEO of the Africa50 Group, Mr Alain Ebobissé, expressed gratitude for the African Development Bank's support and affirmed the commitment to working together to improve the infrastructure landscape on the continent.
By leveraging private capital, the Africa 50 Infrastructure Acceleration Fund I aims to create employment opportunities, enhance healthcare and education access through digital technologies, promote financial inclusion through fintech investments, and mitigate the impact of climate change.
The fund is projected to generate 3,278 full-time equivalent jobs by 2035, including 1,676 jobs for women. Additionally, it is expected to contribute to regional integration by improving transport and logistics infrastructure, which can boost inter and intra-regional trade.
The African Development Bank and its partners will continue to provide growth capital and infrastructure equity to support the urgent need for private sector funding in bridging Africa's infrastructure financing gap.