This list of FAQ is compiled to assist visitors of the Website to get quick responses on some basic questions on Africa50. Visitors can ask questions and this will help to extend the FAQ.
Africa50 is a new platform to complement the financing of infrastructure by the African Development Bank, other multilateral development banks, and private investment funds. Despite increased investment in infrastructure in Africa there is still a large funding gap. Moreover, the project development phase for infrastructure projects is too long and very limited resources are allocated to infrastructure project development given the needs. Africa50 accelerates the provision of infrastructure by speeding up both project development and financing. Africa50 is in a unique position to facilitate infrastructure development, since it is financed and supported by its African shareholder governments and the African Development Bank. It can thus act as a bridge between the public and private sectors, helping to eliminate bottlenecks for both private projects and public private partnerships, speeding up project implementation.
Is there not a conflict between having a development impact and making a profit?
No. Private sector financing, which is needed to bridge the infrastructure gap in Africa, can only be mobilized if investors can make a financial return commensurate with the risk profile of projects. Without adequate infrastructure, especially access to power and transport, there will be little economic development. It is the responsibility of governments to create the regulatory structures to ensure that investments contribute to the development of the country and that their benefits impact the greatest number of people in an equitable way.
How is Africa50 working with African governments to ensure that the infrastructure projects chosen are the right ones?
We use a multi-pronged approach. When possible we participate in donor and investor meetings with our shareholders. During these, governments lay out their financing needs, including for infrastructure. We also consult with governments in the field as necessary, especially to speed up project implementation. But mostly we rely on our extensive project due-diligence, our in-house expertise, and our top-notch investment committee to ensure that our projects are the best solution for the countries at the time of our investment.
What are the biggest challenges for infrastructure investors in the region and how can they be overcome?
The biggest challenge continues to be the lack of enough bankable projects, which is due to a large extent to the investment climates in many countries, which need to be improved to scale up private investments in infrastructure. Governments must demonstrate political will to implement sector reforms and efficient, private sector-friendly regulations that can attract investors and financiers. Financing can be found if the environment is right, if the risks are shared according to market practices, and if the projects are reasonably attractive.
Will Africa50 be able to deliver on its promise to be profitable?
Yes. Africa50 follows a proven, private sector based business model. It has recruited top managers and investment officers with substantial infrastructure and private sector experience. Projects are selected not only for their development impact, but also for their commercial merits and potential to pay a fair return. Investment decisions are based on the best practices of both the private sector and development finance institutions. Furthermore, infrastructure projects, when properly developed and supported by governments, have a low failure rate.
What is the relationship between Africa50 and the African Development Bank?
Africa50 is an independent institution with its own governance framework and decision making rules. However, the African Development Bank will continue to provide strategic support as a major shareholder, particularly through its President, who is the Chairman of Africa50's Board of Directors. Both institutions seek to leverage their respective competitive advantages and develop synergies to speed up the provision of infrastructure in Africa.
Why is Africa50 composed of two separate entities, a project finance arm and a project development arm?
The separation between development activities and financing is necessary because of their different risk profiles and because Africa50 is committed to supporting infrastructure project development as a priority activity.
How does Africa50 source its projects?
It uses its extensive network of contacts in industry, finance, government, and development finance institutions, as well as direct outreach to potential investors.
When will Africa50 reach its target capitalization of $3 billion?
Africa50 expects to reach this target in the medium term, given the present momentum.
Why was Casablanca selected to host the headquarters?
Casablanca won a competitive bidding process during which 12 African countries submitted bids. An international firm was hired to carry out the evaluation and ranking.