A new lifeline for infrastructure funding has been lined up for Nigeria and the rest of the continent’s economies, under the Africa Infrastructure Investment Fund (AIIF3), with $40 million ready for disbursements.
An initiative approved by the African Development Bank (AfDB) and the third in a series of equity investments, is a closed-ended pan-African infrastructure fund managed by South Africa-based Africa Infrastructure Investment Managers (AIIM).
AIIM is one of Africa’s most experienced infrastructure fund managers and focused on acquiring positions of significant influence in roads, airports, rail links, bridges, ports, logistics, power generation, utility distribution, as well as telecommunication assets.
According to AfDB, AIIF is Africa-based and features five regional offices in South Africa, Nigeria, Cote d’Ivoire, and Kenya, translating to on-the-ground knowledge and strong relationships to source infrastructure investment opportunities.
AfDB’s Group’s Director of Infrastructure and Urban Development, Amadou Oumarou, said in terms of development outcomes, AIIF3 will create a quantifiable and measurable social and environmental impact by supporting energy and transport infrastructure access across Sub-Saharan Africa. The Fund will support the creation of over 1,500 jobs at the project level and enhance capacity building and skills-transfer.
“The recent downturn in global commodity prices and a reorientation away from private equity in Africa by a few DFIs have lowered fundraising expectations across the board. This is negatively affecting the availability of equity capital for Africa’s infrastructure space. In this sense, the Bank would play a counter-cyclical role through this investment,” he said.
AIIF3 boasts an extensive pipeline of bankable or near-bankable infrastructure projects, having already reviewed hundreds of potential investments and narrowed down approximately $500 million, including key projects cutting across African economies.
The proposal represents the AfDB’s third investment with this fund manager, following a 1996 investment in SAIF and a 2010 investment in AIIF2, while with current plans, the multinational lender stands to have positive additional role, given that the fundraising market continues to be very challenging, leaving an important role to be played by Development Financial Institutions (DFIs).
It has also expressed optimism that commercial and institutional investors are likely to view its investment as a positive demonstration effect, while it will also ensure that the highest environmental and social standards are applied to AIIF3.This Equity Investment is fully aligned with with the bank’s operational priorities and its “High 5s,”- Industrialize Africa, Light up and Power Africa, and Integrate Africa, expected to sustain the development of Africa’s infrastructure market.