Africa Finance Corporation plans $ 500 million climate resilient infrastructure fund under its new asset management division, AFC Capital Partners
Lagos, Nigeria – (COMMERCIAL THREAD) – As part of its desire to fight Africa’s vulnerability to climate risk, the Africa Finance Corporation (AFC) has created an independent asset management branch, AFC Capital Partners, with a first offer: the Infrastructure Climate Resilient Fund (ICRF).
AFC Capital Partners plans to raise US $ 500 million over the next twelve months and US $ 2 billion over the next three years. ICRF will act as a direct investor and co-investment fund to improve the quality of African ports, roads, bridges, railways, telecommunications, clean energy and logistics in the face of rising costs. temperatures and sea level due to climate change.
“AFC Capital Partners will strengthen our firepower in driving integrated infrastructure solutions that are at the heart of Africa’s development in the post-Covid era,” said Samaila Zubairu, President and CEO of Africa Finance Corporation. “The Infrastructure Climate Resilience Fund will allow us to support climate adaptation as well as projects that reduce carbon emissions and catalyze our continent to rebuild better, with more climate resilient and sustainable infrastructure. And we are delighted to welcome Ayaan Zeinab Adams as CEO of AFC Capital Partners. She brings extensive experience to AFC and will allow investors to gain significant exposure to the infrastructure market in Africa.
As a former leader of the private sector arm of the Green Climate Fund under the United Nations Framework Convention on Climate Change, as well as a former IT director and senior director of the Bank Group IFC global, Ayaan brings 27 years of experience in climate response and investment. to his new role.
The continent that has contributed the least to climate change is most at risk due to poorly equipped housing, transportation, industrial and energy structures to survive storms, floods, droughts, wildfires and other dangers associated with extreme weather conditions. According to the United Nations Office for Disaster Risk Reduction, without urgent intervention, the cost of structural damage from natural disasters will increase to US $ 415 billion per year by 2030, from US $ 250 to 300 billion currently. Damage to railways, roads, bridges, seaports and power grids will add to an infrastructure deficit currently of US $ 130 billion to US $ 170 billion per year. The United Nations Conference on Trade and Development has estimated that a total of $ 2.3 trillion in infrastructure is needed across Africa.
AFC Capital Partners is an integral part of the Company’s five-year strategy, as defined in 2018 to expand its range of pragmatic and innovative financing solutions by mobilizing capital to stimulate the development of infrastructure resilient to the effects of change. climate.
“Significant funding is urgently needed to build physical infrastructure that will survive the forces of climate change,” Ayaan said. “The good news is that much of this investment is consistent with competitive returns for investors by leveraging the expertise, relationships and blended finance models that have been tried and evaluated for many years by Africa. Finance Corporation. ”
Ayaan played a key role in building the mandate of the Green Climate Fund’s Private Sector Facility and quickly grew its portfolio in three years to $ 2.1 billion invested in Africa, Asia-Pacific, Latin America and the Caribbean. Previously, she was also Managing Director of Africa Funds for CDC Group UK.
AFC Capital Partners’ mandate is aligned with that of AFC in providing attractive investment opportunities for the global development finance community and commercial investors seeking long-term returns through structures that protect infrastructure built in Africa against climate risks. The newly created fund, incorporated in Mauritius, will use traditional project finance and private equity structures, supported by a mix of concessional finance, grants and soft equity.
“Our goal is to stay true to the track record, skill set and interest of AFC investors without compromising the ability to provide timely exits and seamless entry of new investors on an arm’s length basis,” said Ayaan.
About AFC Capital Partners
AFC Capital Partners is a wholly-owned subsidiary of Africa Finance Corporation, with a board of directors and executive committee independent of the company. Its collective investment vehicles are guided by specific investment themes that mobilize third-party funds for infrastructure financing. AFC Capital Partners seeks to leverage the breadth and breadth of Africa Finance Corporation’s experience throughout the investment lifecycle to enhance added value for investors and provide unique access to impactful co-investment opportunities
AFC was established in 2007 to catalyze private sector-led infrastructure investments across Africa. It is the second highest rated multilateral financial institution in Africa. AFC’s approach combines specialized industrial expertise with a focus on financial and technical advice, project structuring, project development and venture capital to meet Africa’s infrastructure development needs and stimulate a sustainable economic growth. AFC invests in high quality infrastructure assets that provide essential services in the basic infrastructure sectors of energy, natural resources, heavy industry, transport and telecommunications. The Company has invested over US $ 8.7 billion in projects in 35 African countries since its inception.