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.
What distinguishes Africa50 from private equity funds, of which there are several in Africa?
Africa50 is more commercial than other development financial institutions while being more developmental than private infrastructure funds. It is uniquely positioned because it can act as a bridge between its government shareholders and private investors, mobilizing political support to improve the risk profiles and implementation of projects.
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.
Will Africa50 be able to deliver on its promise to be profitable?
Yes. Africa50 follows a proven, private sector based business model. It is in a position to recruit 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 the Board of Directors which is chaired by its President. 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 will Africa50 source its projects?
It will use 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.
Is Africa50 already operating?
Yes. Africa50 is already working on several projects. At present the CEO is assisted by a team of senior consultants. Recruitment of the senior management team should be completed in early 2017.