The African Development Bank (AfDB) and twenty African countries have raised $830 million to finance infrastructure development on the continent under the newly created Africa50 initiative.
This was announced in a statement released shortly after a constitutive general assembly for Africa50, yesterday, in the Moroccan city of Casablanca.
Africa50 is a new platform being promoted by AfDB to mobilise a pool of funds to bankroll infrastructure investment on the continent that has a daunting annual deficit of over $40 billion of the more than $90 billion needed every year.
Dr Donald Kaberuka, the outgoing pesident of AfDB and the current chair of the Board of Directors of Africa50, said the initiative will rejuvenate infrastructure financing and development in Africa.
“The large presence of African States and their financial commitments is a testimony to a shared vision to find new ways to accelerate the provision of infrastructure,” said Kaberuka.
East African countries are not among the 20 founding members of the initiative that include Benin, Cameroon, Congo, Djibouti, Egypt, Gabon, Ghana, Ivory Coast, Madagascar, Malawi, Mali, Mauritania, Morocco, Nigeria, Niger, Senegal, Sierra Leone, Sudan, Gambia and Togo.
However, Rwanda still has an opportunity to invest in the Africa50 initiative when the second closing for investors is held before the end of the year.
The first opportunity to invest in the initiative was given to only African countries but subsequent investment drives will accept capital from other non-sovereign investors both in Africa and outside.
Africa50’s main objective is to mobilise long-term savings within and outside Africa for the financing of commercially viable infrastructure projects across Africa.
The AfDB targets to mobilise at least $3 billion in capitalisation from investors in the medium term and Kaberuka said the strong expression of commitment by the African countries is a necessary to attract more institutional investors.
Among institutional investors targeted include sovereign wealth funds, pension funds, insurance companies and other sources of long-term finance around the world.
During the constitutive general meeting, on Wednesday, Africa50’s founding members signed articles of incorporation enshrining the highest standards of corporate governance.
An agreement was also signed with the Kingdom of Morocco paving way for the establishment of the Africa50 headquarters in that country.
Mohamed Boussaid, the minister for finance for Morocco, said Africa50 is an idea whose time has come and that the Constitutive General Assembly is an important first step towards making it a reality.
Other decisions taken at the meeting included the appointments of the members of the board of directors of the project finance and development vehicles as well as the appointment of KPMG as external auditors of the initiative.
Alassane Ba, the former managing director of Shelter Afrique, is the acting chief executive of Africa50, and his main assignment is to put measures in place to immediately operationalise Africa50.
Africa50 expects to start developing and financing projects before the end of 2015 and countries such as Rwanda that have huge commercially viable infrastructure projects will have an extra alternative to raise funds.