IFC commits $30m to shape future infrastructure in Africa

International Finance Corporation targets specific projects in Côte d’Ivoire, Egypt, Kenya, Morocco, Senegal, and South Africa.
IFC’s $30 million (Sh4.8 billion), own-account investment will help Africa Infrastructure Investment Fund 4 Partnership (AIIF4) exceed its final close target of $500 million (Sh80.4 billion).
A pan-African infrastructure private equity firm called the Africa50 Infrastructure Acceleration firm I is raising up to $500 million for investments

Kenya is among six African countries that International Finance Corporation (IFC) will pump $30 million (about KSh4.8 billion) equity investment to fund works on essential infrastructure.

The fund, managed by Africa Infrastructure Investment Managers (AIIM), part of the Old Mutual Group, will support projects in the telecoms, renewable energy, and transport sectors across Africa but with a specific focus on Côte d’Ivoire, Egypt, Kenya, Morocco, Senegal, and South Africa.

In the telecoms sector, the fund will focus on financing data centers, fiber networks, and communications towers. In the energy sector, the fund will target utility-scale renewable energy platforms and commercial and industrial projects.

In the transport infrastructure sector, the fund will prioritize investments in mobility and logistics, bulk-handling infrastructure, and temperature-controlled logistics.

IFC’s $30 million (KSh4.8 billion), own-account investment will help Africa Infrastructure Investment Fund 4 Partnership (AIIF4) exceed its final close target of $500 million (KSh80.4 billion).

International Finance Corporation (IFC) investment plan

According to IFC Africa Regional Industry Director for Infrastructure and Natural Resources, Sarvesh Suri, the investment underscores IFC’s commitment to supporting private sector projects that drive access to opportunity and support development in Africa.

“IFC’s partnership with AIIM will support the development of digital assets and bolster the crucial renewable energy and transportation sectors in several countries across Africa,” said Suri.

In the fiscal year 2023, IFC dedicated $43.7 billion to support private companies and financial institutions in developing nations. This commitment harnesses the strength of the private sector to address extreme poverty and enhance shared prosperity amidst the challenges posed by compounding global crises on economies.

Creating Markets Advisory Ag. Senior Manager for Eastern and Southern Africa at International Finance Corporation (IFC) Gokhan Akinci (right) and KenTrade’s Ag. Chief Executive Officer (CEO), David Ngarama (left), at a recent event to introduce the Application Performance Management tool in Kenya. Marcus Kimani (IFC) and Anne Waweru (KenTrade) are watching. [Photo/Capitalnews]

Highlighting the significance of private and development finance, it was emphasized that these investments play a crucial role in assisting African governments in meeting their increasing infrastructure demands, delivering essential services, and fortifying their economies.

IFC’s investment in the AIIF4 fund aligns with the World Bank Group’s Digital Economy for Africa (DE4A) initiative, which seeks to narrow the digital connectivity gap in sub-Saharan Africa. This investment contributes to the World Bank Group’s broader strategy to expedite electrification in Africa, with the goal of achieving universal access to power on the continent by 2030.

As a key member of the World Bank Group, IFC stands as the largest global development institution concentrating on the private sector in emerging markets. Operating in over 100 countries, IFC utilizes its capital, expertise, and influence to stimulate markets and create opportunities in developing nations, as emphasized by Suri.

Energy Financing GAP in Africa

Amani Abou-Zeid, AU commissioner for Infrastructure and Energy, says Africa faces significant infrastructure deficits that hinder economic growth and development in the continent.

He notes that closing the infrastructure funding gap and scaling up renewable energy investments are critical to help African countries meet climate goals.

According to the commissioner, energy access in Africa remains low, with more than 600 million people lacking access to electricity.

AFDB financing

In June last year, The Board of Directors of the African Development Bank Group approved an equity investment of $20 million in the Africa50 Infrastructure Acceleration Fund I (link is external), in support of its target to mobilize private capital for infrastructure across the continent.

A pan-African infrastructure private equity firm called the Africa50 Infrastructure Acceleration firm I is raising up to $500 million for investments and value-adding in key infrastructure areas. Power, energy, digital and social infrastructure, logistics, water and sanitation, and transportation are a few of them.

Africa50, an infrastructure investment platform founded by nations and the African Development Bank, is the fund’s sponsor. Africa50 unifies the financing and project development for infrastructure projects. Africa50 has a proven track record of making private sector investments.