Africa Finance Corporation plans $500m climate-resilient infrastructure fund under new asset management division, AFC Capital Partners
Lagos, Nigeria–(BUSINESS WIRE)–As part of its efforts to combat Africa’s vulnerability to climate risk, Africa Finance Corporation (AFC) has created an independent asset management arm, AFC Capital Partners, with a first offering: the Climate Resilient Infrastructure (ICRF).
AFC Capital Partners expects to raise $500 million over the next twelve months and $2 billion over the next three years. ICRF will act as a direct investor and co-investment fund to improve the quality of ports, roads, bridges, railways, telecommunications, clean energy and logistics in Africa in the face of rising temperatures and sea levels due to climate change.
“AFC Capital Partners will strengthen our firepower in driving integrated infrastructure solutions that are central to Africa’s development in the post-Covid era,” said Samaila Zubairu, Chief Executive Officer of Africa Finance. Corporation. “The Climate Resilient Infrastructure Fund will allow us to support climate adaptation as well as projects that reduce carbon emissions and catalyze our continent to build back 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 a wealth of experience to AFC and will provide investors with access to significant exposure to the infrastructure market in Africa.
As a former head of the private sector arm of the Green Climate Fund under the United Nations Framework Convention on Climate Change, as well as a former CIO and IFC Senior Director of the the World Bank, 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 housing, transport, industrial and energy structures ill-equipped to survive storms, floods, droughts, wildfires and other extreme weather-related hazards. According to the United Nations Office for Disaster Risk Reduction, without urgent action, the cost of structural damage caused by natural disasters will rise to $415 billion per year by 2030, from $250-300 billion today. Damage to railways, roads, bridges, seaports and power grids will add to an infrastructure deficit currently running at $130-170 billion a 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 set out in 2018, to expand its range of pragmatic and innovative financing solutions by mobilizing capital to foster the development of infrastructure resilient to the impact of change. climatic.
“Significant funding is urgently required 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 tested and evaluated for many years by Africa Finance Corporation.
Ayaan played a key role in shaping the terms of reference for the Private Sector Facility of the Green Climate Fund and rapidly expanded its portfolio in three years to $2.1 billion invested in Africa, Asia-Pacific, Latin America and the Caribbean. Previously, she also held the position of Managing Director of Africa Funds at the UK-based CDC Group.
AFC Capital Partners’ mandate is aligned with that of AFC in providing attractive investment opportunities to 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 employ traditional project finance and private equity structures, backed by a mix of concessional finance, grants and soft equity.
“Our goal is to remain true to AFC’s track record, skill set and investor interest without compromising the ability to provide timely exits and seamless entry of new investors on an arm’s length basis,” said Ayan.
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 depth and breadth of Africa Finance Corporation’s experience across the investment lifecycle to enhance value for investors and deliver Unique access to impactful co-investment opportunities.
AFC was established in 2007 to catalyze private sector-led infrastructure investment across Africa. It is the second highest rated multilateral financial institution in Africa. AFC’s approach combines specialist sector expertise with a focus on financial and technical advisory, project structuring, project development and venture capital to meet Africa’s infrastructure development needs and drive 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, transportation and telecommunications. The Company has invested over US$8.7 billion in projects in 35 countries in Africa since its inception.