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African Leaders Launch Africa50 Initiative At NASDAQ: For Infrastructure Development

by Felix Omondi

African Leaders Launch Africa50 Initiative At NASDAQ: For Infrastructure Development
African Leaders Launch Africa50 Initiative At NASDAQ, For Infrastructure DevelopmentThere is an ambitious project that was launched in September 26th, 2013 in New York City at the NASDAQ Stock Exchange dubbed Africa50. This initiative came about as a result of a collaboration between the African Development Bank (AfDB) and Made in Africa Foundation (MIAF). A collaboration geared towards co-marketing initiatives that will lead to funding for Africa’s biggest infrastructure delivery vehicle;  the Africa50.

The main agenda of this initiative is to reduce the time that is normally takes to build any infrastructure project in any part of Africa. The Africa50 Initiative is backed by years of innovation and experience from AfDB and MIAF: in the last half decade, AfDB has invested over USD 5.4 billion in various infrastructure developments throughout Africa: relying on private sectors and the public-private financing.

On the other hand MIAF is the brain child of the famous Ghanaian-born designer, Ozwald Boaten and the leading Nigerian businessman Kola Aluko of the Atlantic Energy. The two realized that just a small millions worth of dollars investment in development projects in Africa has the potential of changing the economic status of the entire of the continent by a great magnitude. This partnership between MIAF and AfDB has set a goal of raising $500 million dollars for the Africa50’s project development arm before the end of the first half of this year.

The Africa50 project aims at accelerating infrastructure development in Africa, mainly by mobilizing private financing. This is expected to be a phenomenon platform for infrastructure development across Africa. The project will target high-impact countries and regional projects dealing with ICT, Energy, Water Supply and Transport. The structuring of the Africa50 project is development oriented yet is being operated to be a commercially viable entity. This initiative will be run complementary to, and legally independent from all development financing projects currently on-going in Africa. Its operation decisions will be made by a selected team of highly qualified managers appointed based on technical merits and have demonstrated competent managerial skills in their careers.

The Africa50 project will establish 2 business segments, namely:

  • Project Development: The objective here will be increasing the number of bankable infrastructure projects across Africa. Achieved through substantially increasing funding to infancy project development, which are made possible through innovative partnerships and incentive schemes. Africa50 will also avail skilled technical, financial and legal experts to the project from its early stages of development. It will be sharing the costs for the development with the host government and developers. Recovery of the funding will be through carried interest in the project or at financial close.
  • Project Financing: This segment mainly focuses on giving financial instruments necessary to attract more infrastructure financing to Africa. These financial instruments will include: senior secured loans, bridge equity, credit enhancement, refinancing/secondary transactions among other risk mitigation measures all meant to attract contemporary funders like international investment banks and institutional investors.

At current, the time it takes between the formulation of development project idea and the funding-close is about 7 years in Africa. Hence Africa50 intends to shorten this time to just 3 years, thus enabling a massive mass of infrastructure development under a very short period across the continent.

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