The Board of Directors of the African Development Bank Group AFDB has approved an equity investment of $20 million to mobilize private capital for infrastructure development across the continent.
The bank, in a statement on its website, said that the fund was part of Africa50 Infrastructure Acceleration Fund 1.
The Africa50 Infrastructure Acceleration Fund I is a pan-African infrastructure private equity fund that is mobilizing up to $500 million for investment.
The fund is also meant to ensure value creation in strategic infrastructure sectors which include power, energy, digital and social infrastructure, transportation, logistics, and water and sanitation.
The fund is sponsored by Africa50, an infrastructure investment platform established by governments and the bank.
In the statement, it reads, “Africa50 brings infrastructure project development and financing under one umbrella. It has a strong track record of investments in the private sector and of projects undertaken under the Public-Private-Partnership framework.
“The mobilization of private capital is critical to closing the infrastructure financing gap in Africa.
“This is especially given the limited fiscal space of African governments which currently provide the largest source of infrastructure funding in Africa.
“The fund was established as a vehicle to help execute Africa50’s mandate of mobilizing private capital and accelerating further investment flows into African infrastructure by targeting private and institutional investors.’
The AfDB’s Director for the Industrial and Trade Development Department, Abdu Mukhtar, said the Bank’s investment in the Fund underlined its strategic nature.
Mukhtar said this shows that the Bank prioritizes investing in strategic infrastructure sectors that contribute to closing Africa’s infrastructure financing gap (estimated at US$ 68 billion to US$ 108 billion annually).
“The Bank’s investment will support Africa50 to crowd in private capital into African infrastructure through a private equity fund vehicle that private investors better understand and are more comfortable investing in,” Mukhtar added.
The AfDB’s Director for Energy Financial Solutions, Policy, and Regulations, Wale Shonibare, said the Bank’s support for the Africa50 Infrastructure Acceleration Fund aligned with its High Five objectives.
“It also strengthens the Bank’s 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.
The Chief Executive Officer of the Africa50 Group, Alain Ebobissé, stated, “We are highly appreciative of the AfDB’s 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, and 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 full-time equivalent jobs over the period 2023-2035, 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 intra-regional 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 bridge the infrastructure financing gap in the continent.
The African Development Bank (AfDB) group had earlier reiterated its commitment to climate finance since the 2015 United Nations(UN) Climate Change Conference (COP 21) in Paris.
Africa’s foremost development finance institution disclosed this in a statement on Thursday.
READ ALSO: AfDB Intensifies Dedication To Climate Finance
Source: nannews.ng
