Development finance institutions (DFIs) British International Investment (BII) and FMO on July 27 made a joint commitment to the African Infrastructure Investment Fund 4 (AIIF4), managed by African Infrastructure Investment Managers (AIIM), aimed at supporting AIIF4 in reaching its $500-million target fund size.
Anchor investor BII – the UK’s development finance institution, has committed $76-million, while FMO – the Dutch entrepreneurial development bank, has committed $40-million to AIIM’s fourth pan-African fund.
The fund previously received a cornerstone investment from Old Mutual, the fund manager’s sponsor and a prominent African financial services group.
AIIM, an experienced fund manager with one of the longest records in infrastructure investment in Africa, will invest in high-impact infrastructure projects across the continent through AIIF4.
As such, the AIIF4 will assist AIIM in building on the successful performance of its predecessor funds by investing across three priority infrastructure subsectors – renewable energy, such as rooftop solar; digital infrastructure, including mobile telecoms towers, data centres and fibre-optic networks; and mobility and logistics, such as ports, roads and other supporting infrastructure.
AIIF4 will play a role in bridging the estimated infrastructure financing gap of about $108-billion a year by funding reliable infrastructure across Africa.
AIIF4-backed projects will boost productivity by creating jobs and stimulating economic activities, while the new and upgraded infrastructure will support inclusive development, improve standards of living for consumers and accelerate sustainable economic growth within many countries across the continent.
Further, at least 20% of the capital committed to AIIF4 will be invested in climate finance-qualifying projects, which will directly contribute to reducing greenhouse-gas emissions.
In addition, AIIF4 qualifies under Group of 7 initiative the 2X Challenge, based on AIIM’s workforce consisting of 50% women, and its commitment to working towards increasing entrepreneurship, employment, leadership and consumption opportunities for women in 30% of AIIF4’s portfolio companies.
BII infrastructure and climate funds head Ryan Wagner says that, for over a decade, BII has proudly been an active partner to AIIM, an institutional fund manager with long-term industry expertise and on-ground knowledge of the Africa infrastructure space.
“We are pleased that our partnership alongside FMO and Old Mutual will serve to mobilise further capital to help meet AIIF4’s target size, playing a role in meeting Africa’s infrastructure needs.”
He adds that AIIF4 clearly aligns with BII’s core infrastructure strategy, and BII is confident that its capital will help modernise cities and services and accelerate social and economic prosperity for people and communities across Africa.
FMO private equity energy manager Diana Wesselius says that, because FMO has also invested on the two predecessor funds, the organisation sees AIIM as a long-term partner in supporting infrastructure development in line with FMO’s strategy and look forward to supporting the advancement of the African continent’s infrastructure.
This commitment from BII, FMO and Old Mutual contributes to the United Nations Sustainable Development Goals 7 – affordable and clean energy; 8 – decent work and growth; and 9 – industry, innovation and infrastructure.