The International Finance Corporation (IFC) - a member of the World Bank Group, has signed an agreement to invest $100 million in the Africa Infrastructure Investment Fund 2, an equity fund that will promote the development of basic infrastructure in Africa. The equity fund plans to raise $600 million to $1 billion to invest in unlisted equity and equity-like infrastructure investments in Sub-Saharan Africa. The fund 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. The fund, known as AIIF2, was established by African Infrastructure Investment Managers Proprietary Ltd, a joint venture between Macquarie Africa Pty Ltd, part of the Macquarie Group, and the Old Mutual Investment Group (South Africa) Pty Ltd, 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. It is also an important step for the continued expansion of our participation in Africa and we anticipate will meet investors’ expectations on financial, social, and environmental levels.”
Lack of infrastructure is hampering growth in Sub-Saharan African economies, hindering their quest for global competitiveness and poverty reduction. IFC is helping develop assets such as a reliable power supply and road networks, 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.
“IFC’s commitment signals our strong support for a fund that will address a key constraint for developers of infrastructure projects in African countries—namely the availability of equity capital,” said Bernard Sheahan, IFC Director of Infrastructure.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. It is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including investments in infrastructure funds across the globe.
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit www.sfi.org.
About the African Infrastructure Investment Managers
AIIM is a joint venture that was established in 2000 by Macquarie Africa (Pty) Ltd, a member of the Macquarie Group of Australia, and Old Mutual Investment Group (South Africa) (Pty) Ltd. AIIM is the leading manager of unlisted infrastructure equity funds in the Sub-Saharan region and draws upon the considerable experience of its shareholders.