ChangingtheGameforAfricanInfrastructure

Africa50OverviewMarch2017

2

Africa50’smission

Aninnova(veinstrumentfortransforma(onalchangeininfrastructuredevelopmentandfinancinginAfrica

3

StrategicObjec=ves

§  Become the leading strategic investor in commercially viable and financiallya;rac<veprivateandPPPinfrastructureprojectsinAfrica

§  IncreasethenumberofbankableprivateandPPPinfrastructureprojectsinAfrica

§  Raise significant capital from public (government and government related) andprivatesources,withprivatefundssignificantlyexceedingpublicfundsover<me.

§  Tap long term savings fromwithin and outside the con<nent by crea<ng an assetclassa;rac<vetoins<tu<oninvestors

.

4

Africa50hasbeensuccessfullyestablished

•  IncorporatedinCasablanca

•  Legallyandfinanciallyindependent

•  Twoseparatecompanies:ProjectDevelopmentandProjectFinance

•  Threeclassesofinvestors:

o  Africanstates

o  Interna<onalfinancialins<tu<ons

o  Pensionfunds,sovereignwealthfunds,andprivatesectoren<<es

•  Targetcapital:$3billion

Africa50-Project

Development

Africa50–ProjectFinance

Africanstates

IFIs,PublicFinancialIns<tu<ons

Privateinvestors

Earlystageriskcapital

funding

Investmentinbankable

projects

ProjectCompany

ProjectCompany

1 2

5

Africa50hasreachedamilestoneandfundraisingcon=nues

Fundraisingstage

Investors AfDB,Benin,BurkinaFaso,Cameroon,Congo,Côted’Ivoire,Djibou<,Egypt,Gabon,TheGambia,Ghana,Kenya,Madagascar,Malawi,Mali,Mauritania,Morocco,Niger,Nigeria,Senegal,SierraLeone,Sudan,Togo,Tunisia,BankAlMaghrib,BCEAO

OtherAfricanstates,centralbanks,DFIs

Africanstates,Centralbanks,DFIS,Privateinvestors(sovereignwealthfunds,insurance

companies,pensionfundsetc.)

August2016 Endof2016/Early2017

Finalclose

~$2bn

~$170m

$830m

Target$3bn

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Africaninfrastructuresuffersfromalargefinancinggap

Source:ICA,McKinsey‘Lionsonthemove(2016)’,Africa50es(mates

Annualinfrastructurefinancinggap

$130bn

$80bn

$50bnAddi(onalinvestmentneeded

$6.5bn

$2.5bn

$4.0bn

Projectdevelopmentfinancinggap

Averageannualprojectdevelopment

fundingneed(2016-2025)

Currentprojectdevelopmentspending(2015)

Averageannualinvestmentneed(2016-2025)

Currentinvestment(2015)

Addi(onalfundingneeded

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Barrierstobridgingtheinfrastructurefinancinggap

Limitedgovernmentcapacityto

implementprojects

Limitednumberofearlyrisk-takersandcredibleprivate

players

2 4Enabling

environment/regulatoryconstraints

3

Not enough well-prepared projects are ready for financing and implementation

Slow progress in establishing enabling environments conducive to PPPs

Early-stage investors and strong private sponsors are wary of Africa due to a perception of high risk

Source:AfDB

Limitedpublicresources

1

Budgetary constraints and inefficient use of resources limit the number of projects the public sector can fund

Publicsector Privatesector

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Africa50asabridgebetweenthepublicandprivatesectors

•  ImproveinfrastructureinAfricabydevelopingbankableprojectsandcatalyzinginvestmentsintoshareholdercountries

•  Leveragepublicfundstoraiseprivatecapitalfromlongtermins<tu<onalinvestorsinAfricaandelsewhere

•  Operatecommerciallywithanappropriatefinancialreturnwhilepromo<ngeconomicdevelopment

BecomealeadingAfricaninfrastructureinvestor

LeveragegovernmentandAfDBownershiptosupportinvestees

•  Substan=algovernmentownershipcombinedwithprivatesectormanagement

o  Construc<verela<onshipswithgovernmentshareholders

o  Clearmandatetoa;ractprivateinvestorsbygenera<ngmarketbasedreturnsonequity

•  StrongsponsorshipfromtheAfDB

•  Supportfromotherdevelopmentbanks

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Africa50’scompara=veadvantage

FlexibilityAnimbleorganiza<onabletoadapttopublicandprivate

sponsorneeds

ScalabilityAninvestmentplaPormdesignedto

growover(metosupportincreasingfinancingneeds

IntegratedapproachAonestop-shopforallprojectstages,includingearlystage

projectdevelopment

SpeedAprivatesectorapproach

totheprocessingoftransac(ons

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Africa50equityinvestment

$27m

Totalequityinvestment$90m

Assuminga30%Africa50shareofequity(illustra(onnottoscale)

x11mul'plier

Totalprojectcosts$300m

Projectfinancing

Africa50projectdevelopmentinvestment$4.5m

Totalprojectdevelopmentinvestment

$15m

Totalprojectcostsatfinancialclose

$300m

Assuminga30%Africa50shareofprojectdevelopmentcost(illustra(onnottoscale)

x65mul'plier

Totalequityinvestmentatfinancialclose

$90m

Projectdevelopment

Africa50’sabilitytoleverageitsinvestments

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Africa50’stargetsectorsandinvestmentcriteria

•  Sectorso  Priority:Power(genera<on,

transmission,distribu<onanddistributedpower);transport(airports,ports,roads,logis<cs)

o  Other:ITC,waterandsanita<on

•  Instrumentso  Earlystageriskcapitaltodevelop

projectso  Projectdevelopmentsupportto

thegovernmentandprivateinvestors

o  Equityandquasi-equityinbankableprojects

TargetSectors Selec=oncriteria

•  Onlypublic-privatepartnershipsandprivateprojectswithgoodcashflowpredictability

•  Strongsponsorwithsolidtechnicalandfinancialtrackrecord

•  Adequatereturnscommensuratewiththeprojectriskprofile

•  Significantdevelopmentimpact

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NovaSco=aSolarPlantinNigeria

•  AJointDevelopmentAgreementwithScatecSolar,NorfundandAfrica50,fordevelopmentofa100MWDCsolarpowerplantinJigawastate,Nigeria.Totalprojectcostwillbeabout$150million,withfinancialcloseexpectedin2017andopera<onsin2018.

•  Africa50’srole:projectdevelopmentandlong-termequitypartner(24.5%).Facilitateinterac<onswithGovernmenten<<esandprospec<velenders,par<cularlyAfDB.

•  Strongpartners:SeniordebtwillbeprovidedbyOPIC,IslamicDevelopmentBank,andAfDB.

•  Strongfundamentals:Reliablesolarresourcesanddirectaccesstothegridundera20-yearPowerPurchaseAgreementwithNigerianBulkElectricityTrading.

•  Strongdevelopmentimpact:Theplantwillproduceabout200GWhofpowerperyear,contribu<ngtothestate’s$2billiondevelopmentplan,andhelpingNigeriameetitsclimatechangecommitments,withanes<mated120,000tonsofCO2emissionsavoidedannually.