(Ecofin Agency) – The infrastructure deficit in Africa remains a major obstacle to development. Energy, transport and access to drinking water are among the sectors most affected. According to the ADB, annual infrastructure needs are between $130 billion and $170 billion, leaving a significant financing gap.
The Development Bank of Southern Africa (DBSA) and Axian Group have formalized their intention to invest in the Africa50 Infrastructure Acceleration Fund (IAF). This fund aims to fill Africa’s chronic infrastructure deficit estimated at between $68 and $108 billion per year, according to the African Development Bank (AfDB).
During its first closing in December 2023, the vehicle led by Vincent le Guennou (photo, center), former CEO of Emerging Capital Partners (ECP), had raised $222.5 million, thanks to the participation of 16 investors African institutional investors and an international investor.
With these new commitments, the 12-year fund intends to mobilize a total of $500 million to catalyze the financing of high-impact projects in the areas of energy, transport, water, digital and social infrastructure. These sectors remain the most affected by a financing gap which continues to widen. This is evidenced by ADB data: 43 to 53 billion dollars are missing each year for water, an absolute priority. Energy, transportation and ICT are also suffering, with respective deficits of $20, $16 and $3 billion.
“Participation in the IAF enables collaboration with various institutional investors to meaningfully mobilize and pool financial resources, expertise and networks to address the infrastructure gap on the continent,” stated Boitumelo Mosako, CEO of DBSA.
« We must accelerate progress […] We reaffirm our commitment to advancing transformative infrastructure projects across the continent and fostering sustainable growth for Africa,” said Hassanein Hiridjee, CEO of Axian.
They join the 16 African institutional investors and the International Finance Corporation (IFC) who participated in the first closing of the IAF last year. For Vincent le Guennou, these new commitments confirm the relevance of the new Africa 50 vehicle: “in less than a year, we have demonstrated our ability to attract key institutional investors”
Fiacre E. Kakpo
Edited by Mahoudjro F. Vahid Codjia
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