The African Development Bank (AfDB) approved an agreement April 25 with other major African lenders to form a private equity fund to invest in major African infrastructure projects in energy, water, transport, information technology, and sanitation sectors.
The Pan-African Infrastructure Development Fund (PAIDF) initially is to generate US$450 million to invest directly in infrastructure projects in all regions of Africa, as well as investments in securities of companies that own, control, operate, or manage infrastructure.
PAIDF is to focus on ï¿½very large scaleï¿½ investments in which it can make equity investments of US$25 million to US$120 million, AfDB said. From the investment perspective, PAIDF’s investments of US$1 billion over eight years are expected to spur additional investments for physical infrastructure of US$9 billion to US$14 billion.
AfDB agreed to contribute US$50 million to the fund and another US$1 million to the management of the fund.
Other investors, primarily South Africa-based, are to include the Development Bank of Southern Africa; Public Investment Corp., Africa’s biggest pension fund; Sanlam, a financial services company; Eskom Pension and Provident Fund; and Metropolitan pension fund. AfDB said other institutions that might participate are BPOPF of Botswana, GIPF of Namibia, and SSNIT of Ghana.