The Board of Directors of the African Development Bank (AfDB) has approved an equity participation of up to USD 25 million in the Pan African Infrastructure Development Fund 2 (PAIDF 2). PAIDF2 is a Private Equity Fund that will invest in projects across the power, transport, water and sanitation, Information and Communication Technologies (ICT) and healthcare infrastructure sectors throughout the continent. The Fund’s investments will contribute to the development of Africa’s infrastructure backbone, foster economic growth and contribute to the creation of direct and indirect employment.
In 2007, the Bank approved an investment of USD50 million in the Pan-African Development Fund (PAIDF 1), a Private Equity Fund investing in infrastructure projects across the continent. Harith General Partners (Harith) of South Africa was established as the fund manager of PAIDF 1, which is now almost fully committed in nine transactions. To date, investments made by PAIDF 1 have increased access to electricity, upgraded transport infrastructure, improved access to ICT services and supported over 3,000 direct jobs across North, East, West and Southern Africa. Through its participation in PAIDF 2, AfDB will leverage on the quality of the investment platform, the experience of the team and the strength of the project sourcing networks developed by Harith over the past six years.
The deficit of adequate infrastructure is a major obstacle to doing business in Africa. The development of new infrastructure projects will support economic growth through enhanced competitiveness, increased foreign direct investments and improved trading opportunities. Through these channels, investments in infrastructure projects will contribute to poverty reduction in addition to improving the living conditions of the targeted populations.
According to the Africa Infrastructure Country Diagnostic study, USD93 billion need to be invested annually in order to address the continent’s infrastructure deficit. A key challenge for the development of private infrastructure projects is the limited access to private financing and in particular equity and quasi-equity instruments. With one of the most experienced teams on the continent and a pipeline ready for deployment, Harith is ideally positioned to continue addressing these deficits through PAIDF 2. Moreover, by virtue of its size and geographical reach, PAIDF 2 will be well positioned relative to competition.
Tshepo Mahloele, Chief Executive Officer of Harith General Partners, emphasized that “We are of the firm view that our continued partnership with AfDB will unlock even more game changing infrastructure projects as is evident with the likes of the Lake Turkana Wind Power Project in Kenya and the Henri Konan Bédié Toll Bridge in Abidjan.”
Samuel Ekue Mivedor, Manager of the Portfolio Division of the Bank’s Private Sector Department underscored that “the Bank is building on the experience gained by Harith as a team over the past six years in order to invest strategically and pragmatically in power, transport, ICT, water and sanitation, as well as health infrastructure projects across the continent”.