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The AfDB Approved an Equity of USD 30 Million to the African Infrastructure Investment Fund 2
Tunis, 25 November 2009- The Board of Directors of the African Development Bank (AfDB) approved an equity investment of USD 30 million to the African Infrastructure Investment Fund 2 which is the successor Fund of the African Infrastructure Investment Fund 1 and it will be a closed-end fund with a term of 13 years. The Fund will invest in infrastructure projects such as airport, road, power, telecommunications, rail, port, water and social infrastructure, primarily in Sub-Saharan Africa.
Infrastructure is the foundation of basic services, facilities and institutions upon which growth, development and interaction of modern communities depend and the African continent represents an exciting infrastructure opportunity as significant expansion potential exist in almost all African countries and in almost every sphere of infrastructure.
With a rapidly increasing population, high economic growth, gradual liberalization of regulatory structures and economic policies. The African market is expected to provide high potential over the foreseeable future as there is a pressing need to expand Africa’s grossly lacking infrastructure with a view to increasing economic competitiveness. The Infrastructure Consortium for Africa estimates that approximately USD 40 billion per annum would need to be spent over the next decade in order to address Sub-Saharan Africa’s infrastructure gap.
The Bank’s participation is expected to attract other investors, strengthen transactions and build relationships between equity and debt investors. In addition, the Bank’s general efforts to improve the enabling environment for infrastructure development and maximize development outcomes will benefit the Fund’s Investments.
The fund’s investment will facilitate growth and expansion in Greenfield and Brownfield projects, thus developing companies in the private sector, increasing efficiency, creating jobs and relieve government expenditure on infrastructure. All these outcomes are in line with the Bank’s infrastructure orientation and the Private Sector strategy.