Infrastructure is key to Africa’s future, and to any economy. Investments in it are often considered risky or complicated, but there is enormous potential, says Africa50 CEO, Alain Ebobissé

At Africa50, our position is clear. We live and invest in infrastructure in Africa. They are transformative, impactful, and profitable. And once you have the right formula, they are replicable and scalable

The year 2024 marked a milestone for our young institution. After seven years of operations, we have achieved significant successes; but these are modest compared to the magnitude of the continent’s infrastructure gap. We have made investments in infrastructure that have brought real benefits to people and economies on the continent, while delivering attractive risk-adjusted returns.

Bold and innovative solutions

Africa’s infrastructure needs are huge, and the continent needs bold and innovative solutions to bridge the gap, especially as climate change accelerates and our population increases. Africa50, established by African countries in response to the African Union’s call for an innovative instrument to tackle the infrastructure deficit, is one such solution.

Over the last seven years of operations, we have invested in 27 projects across 29 countries, with an aggregated value of over $8 billion, delivering tangible impact. These projects span energy, transport and logistics, information and communications technology, fintech, healthcare, and education. This has been made possible largely due to the increasing number of our national shareholders who trust us to carry out the infrastructure development mandate they have given us.

Today, we have 32 African countries, the African Development Bank, and two African central banks as our shareholders. With their support, we have mobilized over $1.1 billion in capital commitments and catalyzed an additional $4.4 billion in private sector funding for our projects. This is also the result of our focus on project development, a critical step in building a quality pipeline of infrastructure projects, which are currently insufficiently funded in Africa.

Promoting Africa’s energy transition goals

The continent’s energy transition is critical, and Africa50 is playing an important role in mobilizing the funding needed for a just transition, through the Alliance for Green Infrastructure Africa (AGIA), led by the African Development Bank and supported by the African Union. At COP28, global and African partners pledged $175 million to AGIA.

Our intent for AGIA is to develop a one-stop shop for the entire project lifecycle, from project preparation and development to long-term project financing and de-risking. Our goal is to raise $500 million in early-stage project preparation, and AGIA aims to catalyze $10 billion in green infrastructure investment.

Fueling Africa’s infrastructure growth with innovation

We also take pride in the innovative approaches we’ve used to raise financing for African infrastructure. In December 2023, through our Africa50 Infrastructure Acceleration Fund, we achieved a first close of $222.5 million from 16 African institutional investors and one global investor, a historic first on the continent. This groundbreaking achievement paves the way for leveraging some of the $2.3 trillion in funds under management in Africa to drive much-needed infrastructure investing. This fund is indicative not only of our commitment but also of what is possible if we work together as Africans, in partnership with non-African institutions, to pursue African solutions for African problems.

Another historic transaction was the asset recycling deal we concluded with the government of The Gambia in 2024 regarding the Senegambia Bridge. Asset recycling allows governments to free up public funds for other projects by concessioning infrastructure assets to private investors for a set period of time. This model is especially beneficial for governments with limited fiscal headroom, enabling them to redirect resources toward other key development priorities.

Meanwhile, we will proceed to enhance this asset with new features such as 24-hour surveillance, advanced traffic management systems, and overload control centres. In addition to upgrading existing facilities, new ones will be constructed to maximise regional trade under the programme, fostering long-term economic growth for The Gambia.

The project will generate 235 direct jobs: 175 during construction and 60 permanent positions for operational staff once the upgrades are completed. Above all, it will be a tremendous boost to the efficient movement of goods and people within the West African sub-region. We are excited by the opportunity to bring this transformative project to life, unlocking economic potential and fostering regional growth.

Lighting up the continent

Infrastructure is as much about people as it is about projects. Today, there are 680 million people in Africa without access to electricity; this is one of the reasons why energy is one of our priority sectors. It is essential for driving industrialization across Africa, creating jobs, and building sustainable economic opportunities for our people. We believe that the future of the energy sector in Africa should see greater private sector participation in transmission infrastructure. At Africa50, we are leading the development of Kenya's independent power transmission (IPT) scheme, which will see the development, financing, and construction of the 400 kV Lessos – Loosuk and 220 kV Kisumu – Musaga transmission lines under a public-private partnership framework.

Africa50 is also becoming the partner of choice for the development of renewable projects in Africa. At the Africa Investment Forum Market Days in Rabat, Morocco this year, we signed a landmark agreement with the International Solar Alliance, under which we will become the managers and implementers of the Africa Solar Facility (ASF).

The $200 million facility seeks to provide tailored and cost-effective financing solutions designed to unlock and mobilize investments in distributed renewable energy projects across Africa. Despite their critical role in accelerating clean energy access for millions, these projects have historically been underserved due to small ticket sizes and high perceived risks. Through the ASF, we can bridge this gap by driving investments and harnessing the full potential of distributed renewable energy solutions, bringing us closer to a sustainable and energy-secure future for Africa.

Strategic partnerships for speed and scale

These projects simply exemplify the impact of investments and initiatives happening across the continent. With so much left to do, what’s important is that they demonstrate what is possible for our continent. Africa is eminently bankable, and with the right preparation, there is no shortage of projects with the potential to change lives, grow economies, and provide a decent return for investors.

There is an undeniable need for urgency in meeting the continent's infrastructure goals. In my discussions with African leaders, it has been clear that they are deeply committed to delivering projects. They feel this urgency. We must capitalize on this sense of urgency to transform the continent through infrastructure development.

Africa50 proves that through strategic partnerships, we can move quickly without sacrificing quality. What we need now is to work even more closely with the private sector, DFIs, governments, and African institutional investors to deliver at scale without slowing down project implementation. With greater agility, we can achieve these goals.

Article source: african.business