The Board of Directors of the African Development Bank (AfDB) has approved its third equity investment of US$40 million in Africa Infrastructure Investment Fund (AIIF3).
Managed by South Africa-based Africa Infrastructure Investment Managers, the Africa Infrastructure Investment Fund is a closed-ended pan-African infrastructure fund. This partnership represents AfDB’s third investment with this fund manager following a 1996 investment in SAIF and a 2010 investment in AIIF2.
With this proposal, the African Development Bank stands to have a positive additional role through this investment, given that the fundraising market continues to be very challenging, leaving an important role to be played by Development Finance Institutions (DFIs).
In his presentation to the Board, Amadou Oumarou, the Bank Group’s Director of Infrastructure and Urban Development said “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”.
AfDB’s investment will ensure the highest environmental and social standards are applied to AIIF3. Regarding 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. It will focus on acquiring positions of significant influence on roads, airports, rail links, bridges, ports, logistics, power generation, utility distribution, as well as telecommunication assets.
Africa Infrastructure Investment Managers is one of Africa’s most experienced infrastructure fund managers; while the Africa Infrastructure Investment Fund is Africa-based and features five regional offices in South Africa, Nigeria, Cote d’Ivoire, and Kenya. This translates to on-the-ground knowledge and strong relationships to source infrastructure investment opportunities.