Ndubuisi Francis in Abuja
To support sustainable infrastructure development across Africa, the International Finance Corporation (IFC), the private sector arm of the International Monetary Fund (IMF) has announced a $20 million equity investment in the Africa50 Infrastructure Acceleration Fund (IAF Fund), which will invest in digital infrastructure, renewable power and energy, transportation, logistics, and water and sanitation projects on the continent.
The fund aims to invest in projects across Africa, where the private sector is playing an important role supporting infrastructure development.
The fund’s focus on the digital infrastructure and energy sectors aligns closely with several World Bank Group initiatives and IFC’s strategy to support projects that deliver high development impact.
The fund’s first close secured $222.5 million in commitments, including from 16 African institutional investors. The fund’s final target close is $500 million.
The Chief Executive Officer of Africa50 Group, Alain Ebobissé said:
“We are thrilled to see such strong support from African institutional investors for the Africa50 Infrastructure Acceleration Fund. “This achievement is a testament to the increasing role that African institutional investors are playing in financing the real economy and unlocking Africa’s potential. The Africa50-IAF is the first of a suite of new investment instruments that the Africa50 Group plans to raise as we seek to mobilize further private sector capital from Africa and globally into African infrastructure.”
On his part, IFC’s Regional Industry Director for Infrastructure and Natural Resources, Africa, Sarvesh Suri, said:
“Investing in infrastructure is essential for Africa’s social and economic development. This partnership with IAF will help promote and mobilize much needed equity capital for projects that will have direct positive impacts on populations across Africa, including those that focus on climate mitigation.”
Africa currently faces significant infrastructure challenges.
According to Africa’s Pulse, a bi-annual World Bank publication, the continent lags behind in access to most types of infrastructure, including power, digital, roads, and water, impacting economic activity.
IFC’s investment in IAF is expected to help mobilise more private financing for the fund.
This includes attracting support from institutional investors, development finance institutions, as well as local and regional banks.