Nairobi—Africa50, the Morocco-based pan-African infrastructure investment fund, plans to more than double the value of projects it backs to at least $20 billion over the next five years, as it seeks to help close the continent’s persistent infrastructure financing gap.

The fund, established by African governments in 2015, has so far co-invested in 36 projects spanning power, transport, logistics, ICT and healthcare, with a combined value of about $9 billion.

Africa50 has invested roughly $500 million in equity across those projects, Chief Operating Officer Tshepidi Moremong told Reuters.

“$20 billion and above is what we would like to see,” Moremong said, referring to the total value of projects Africa50 expects to co-invest in over the next five years.

 

Power remains a priority

The fund intends to concentrate on sectors where financing shortages are particularly severe, including electricity generation and transmission.

In December, Africa50 signed an agreement with India’s PowerGrid and the Kenyan government to develop $311 million of high-voltage electricity transmission lines through a public-private partnership.

It has also backed power-generation projects in Nigeria, Egypt, Cameroon and Madagascar, alongside an ICT investment in Rwanda and regional healthcare businesses.

The focus comes as Africa continues to face a major infrastructure funding shortfall. The African Development Bank estimates the continent has an annual infrastructure financing gap of more than $100 billion, with the challenge compounded by declining overseas development financing from wealthier countries.

 

Infrastructure operations offer another growth avenue

Africa50 is also expanding beyond traditional project investment through a model in which it leases and operates infrastructure assets, providing governments with upfront payments while taking responsibility for operations and maintenance.

One example is its agreement to operate the Senegambia Bridge, which connects Senegal and Gambia. Under the arrangement, Africa50 collects tolls while maintaining and upgrading the bridge and making lump-sum payments.

Moremong said this infrastructure-operations business could eventually represent 20% to 25% of Africa50’s portfolio.

 

 

Source: Reuters

Reporting: Duncan Miriri

Editing: Mark Potter