Egypt raises $100 million for Africa Infrastructure Fund

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Egypt raises $100 million for Africa Infrastructure Fund

Egypt has approved to invest a total of US$100 million in the Africa50 Infrastructure Fund, which was launched in 2014 by the African Development Bank (AfDB).

Africa50 targets raising US$3 billion in equity capital, to establish credibility with governments, private developers and financial markets. Depending on funding needs and the project pipeline, Africa50 will augment its financial capacity by raising debt in the international capital markets.

Africa50 is a fund focused on high-impact national and regional projects in the energy, transport, ICT and water sectors. The fund has been structured as an independent, profit-driven, commercially managed entity dedicated exclusively to Africa's infrastructure opportunities. Africa50 establishes two business segments:

  • Project development: The primary objective of this segment is to increase the number of bankable infrastructure projects in Africa. This will be accomplished through substantially increased funding of early stage project development activities, made possible by innovative partnerships and incentive schemes.  Further, Africa50 will make skilled legal, technical and financial experts available to projects from an early stage of development, sharing costs with member governments and developers and recovering its funding at financial close or through a carried interest in the project.
  • Project finance: This segment will focus on delivering the financial instruments required to attract additional infrastructure financing to the continent. These will include: bridge equity, senior secured loans, refinancing/secondary transactions, as well as credit enhancement and other risk mitigation measures geared at attracting non-traditional funders such as institutional investors and international investment banks.

The fund was launched in part due to the fact that the increase of infrastructure delivery in Africa implies a greater focus on project preparation and project development as well as specialized financial tools to address specific market challenges.

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