African Development Bank approves US$50 million equity investment in Africa Finance Corporation to support infrastructure projects in Africa
The African Development Bank has approved an equity investment of US$50 million in Africa Finance Corporation (AFC) − a pan-African development finance institution established in 2007.
This equity investment aims to foster strategic partnerships with a certain number of African DFIs that have a comparative advantage at regional or sub-regional levels in certain strategic sectors. By so doing, the Bank will accelerate and deepen co-financing opportunities, joint implementation and knowledge sharing for the continent’s benefit.
“We believe that this is very timely following the first Africa Investment Forum recently held in Johannesburg, as this will further strengthen Africa- led response to the continent’s infrastructure-financing deficit,” said Stefan Nalletamby, Director of the Bank’s Financial Sector Development.
Through this investment, the Bank will significantly enable AFC adopt the highest standards of development outcomes. It will contribute in achieving increased sustainable growth through an increased productive infrastructure in power, transport, water and telecoms to scale up Africa’s industrialization, thereby generating additional jobs and help reduce poverty.
By providing capital and capacity building to infrastructure projects, the Africa Finance Corporation, contributes to production costs reduction, improved services (agriculture, education, health), and facilitates trade flows as well as movement of goods. These outputs increase access to economic opportunities, productive industries, jobs creation and populations’ wellbeing, thus contributing in achieving the Sustainable Development Goals and the High 5s.
AFC’s impact on development, financing, and delivery of infrastructure projects over the past 10 years spans economic, social, and organizational benefits. In the transport sector, AFC interventions have helped improve the transport and logistics systems in specific countries and regions of Africa. A good example is the transformational Henry-Konan-Bedie Bridge in Cote d’Ivoire. The toll bridge, has tremendously improved travel time between the main city of Abidjan and adjoining areas, thereby reducing congestion on existing bridges and adjoining road network.
“From a development outcomes viewpoint, this equity investment is good, as there will be improved infrastructure development and more generally, private sector development across the continent,” Nalletamby added.
AFC’s mandate is to address Africa’s huge infrastructure gap and industrial development needs through the provision of various financing instruments, including equity, debt and guarantees, as well as project development and financial advisory services to infrastructure projects.
The main sectors of AFC’s interventions include power, natural resources, transport, industries and telecommunications.