Zimbabwe became the 28th country to join Africa50, a $871 million pan-African private equity fund that acts as a key source of infrastructure investment on the continent.
The announcement came as the grouping wrapped up its General Shareholders’ Meeting in the Rwandan capital Kigali on Wednesday.
“Since our founding we have had a goal of having all African countries becoming shareholders,” the CEO of Africa50, Alain Ebobissé told African Business Magazine.
Zimbabwe would also bring much-needed funds to help bridge the continent’s infrastructure gap, which runs up to as much as $108bn, he added.
In a press conference following shareholder talks, Africa50 announced the launch of a third party fund that hopes to raise $1bn in funding from private sector institutional investors for infrastructure projects in Africa.
“We have today committed $870m in capital to Africa50. That isn’t enough given the needs of infrastructure on the continent. So we need to figure out a way to leverage this limited capital by increasing funds from institutional investors. Our target is about a billion dollars to raise additional capital,” Ebobisse said.
Stakeholders are working on a timeline and strategy for raising the funds, Ebobisse added.
Talks at this year’s forum, attended by Rwanda’s prime minister and finance minister, updated shareholders on the progress of the Africa50’s pipeline of 12 infrastructure projects, and sought approval for a range of funding plans for projects ranging from roads, rail, power, bridges, ports, optical fibre, toll roads and transmission and new innovation cities in West and East Africa.
In the pipeline
One of the major milestones reached was finalizing a plan for early stage funding for the $400m Kigali Innovation City (KIC) which the government of Rwanda is expected to sign within days, AfDB President Akin Adesina told African Business Magazine.
The tech city will act as a platform for entrepreneurs, universities and tech companies to innovate, and will add to the 442 tech hubs that have sprouted up across the continent, Adesina says.
AfDB who were chosen to co-develop the project said KIC will have five sectors including data analytics and agriculture.
Africa50 are also considering investing in a PPP project for a transport bridge and railroad across the Congo River, linking Brazzaville and Kinshasa, Adesina said.
“The central African region has the lowest index when it comes to regional integration. You can’t participate effectively in the continental free trade area if you can’t link them in that region.”
“So this project is a very strategic one, it is both a bridge, rail and a road that will allow free mobility of people, goods and services. This is not only good for goods and services but will allow those countries to collect a lot of revenues for resource mobilisation to grow their economies,” he explained.
Following Africa50’s $30 million investment in six solar PV power plants in Egypt, three of the plants have now been connected to the grid and
are delivering power to households and businesses in Egypt, Ebobissé told reporters.
Governments throughout the continent collectively spend less than 2% of GDP on infrastructure, with 48% of all infrastructure investment coming from the private sector, according to AfDB.