With an initial target capitalization of USD 500 million (to be scaled up to at least USD 1 billion), Africa50 aims to attract a variety of investors, including African states, international financial institutions, pensions funds, sovereign wealth funds and private sector entities. There will be two phases of capital increase:
- First Capital Increase: USD 500 million has thus far been secured and will form the basis of the first capital increase of Africa50. Consistent with the established strategy, such initial capitalization will be held by African sovereigns and the African Development Bank. A constitutive general assembly of these shareholders, referred to as founding shareholders, will take place on May 25, 2015 in Abidjan, Cote d’Ivoire. For the collective pledges received from African countries, it is proposed (subject to approval of countries subscribing), that 90% of the resources pledges be earmarked for the Project Finance activities of Africa50 while the remaining 10% apportioned to the Project Development activities.
- Second Capital Increase – The second capital increase, geared towards attracting institutional investors both in Africa and outside Africa, is expected to take place during the course of 2016. This will allow Africa50 to further establish its Executive Team and deliver more transactions before approaching institutional investors. The second capital increase targets an additional USD 1 billion of capital.
In order to attain its targeted scale, Africa50’s financial structure will be geared towards achieving a “Single A” rating so as to enable it to leverage itself at an attractive cost. As a commercially oriented financial institution, Africa50 will seek to preserve and grow its capital base as well as provide a return to shareholders.