The AfDB Bank announced it is contributing a US$5-million equity investment to the establishment of Kukuza Project Development Company (KPDC), a new firm that would focus on early-stage design and preparation of African infrastructure projects.

KPDC will assume turnkey responsibility for preparing the contractual, technical and financial arrangements of its projects, and marketing such projects to a range of potential private and public-private investors for onward implementation. The company expects to process between two and four new infrastructure projects per year. Thus, in 10 years the company aims to develop 30-40 projects for a combined possible investment of over US $5 billion.

KPDC's main sponsor is Infrastructure Leasing & Financial Services Limited (IL&FS), one of India's leading infrastructure development and finance companies, incorporated in 1987 to commercialize infrastructure projects and set up value-added financial services. Other initial investors in KPDC include Allied Investment Partners (AIP) of Abu Dhabi, India Exim Bank and State Bank of India (SBI), one of the world's leading project finance banks with a 10% market share and an extensive network of Indian investors amongst its active corporate clients.

KPDC's initial capitalization is expected to be US $25 million with the five equity shareholders - AfDB, IF&LS, AIP, SBI and the Exim Bank - holding a stake of 20%, 20.5%, 20.5%, 19.5% and 19.5%, respectively. The initial capitalization will fund the company's expenses incurred in developing its projects until advisory fees make the venture self-sustaining and profitable.

KPDC is intended to become an important vehicle in delivering "advisory services and institutional support at the policy and project levels [as] critical enablers of private sector development," as called-for in the AfDB's recently approved Ten Year Strategy. KPDC is aligned with the AfDB's objective to develop modern public- and private-sector infrastructure in Africa that supports sustained economic growth; the AfDB's new Ten Year Strategy to become increasingly catalytic by progressively extending the AfDB's operations upstream into early-stage project development; and the objectives of the recently approved Africa50 vehicle.