British International Investment, the UK’s development finance institution, is investing $20 million in an Africa50 fund as it seeks to attract more private capital to infrastructure projects across the continent.
The investment in the Africa50 Infrastructure Acceleration Fund was announced alongside a new agreement between BII and Africa50 to expand cooperation on infrastructure financing, co-investment and project development.
The commitment takes the fund to a fourth close of about $330 million, with investors including the African Development Bank, International Finance Corp. and more than 20 African institutional investors.
The fund targets infrastructure projects in power and energy, water and sanitation, transport and logistics, and digital and social infrastructure.
The investment comes as African governments struggle to finance the infrastructure needed to support faster economic growth. Limited public funding has increased the importance of development-finance institutions, pension funds, insurers and other long-term investors in funding large projects.
Under a memorandum of understanding signed at the Infra for Africa Forum in Tanzania, BII and Africa50 will identify opportunities for co-financing and co-investment while working to expand the pipeline of projects that can attract institutional capital.
“Africa’s infrastructure financing gap remains one of the biggest barriers to sustainable growth and development across the continent,” BII Chief Executive Officer Leslie Maasdorp said.
Africa50 Chief Executive Officer Alain Ebobissé said the continent’s infrastructure needs could not be met by public capital alone.
The partnership is designed to use BII and Africa50’s capital and networks to bring more investors into infrastructure projects, potentially allowing projects to reach financial close and construction faster.
For BII, the investment also supports a strategy of using development capital to mobilize additional funding from private and institutional investors. Africa50 specializes in developing, financing and investing in infrastructure projects across Africa.
The fund’s latest close brings together capital from international development institutions and African investors, reflecting growing efforts to finance the continent’s infrastructure through a combination of public and private capital.