Africa50 Overview
October 2017 No part of this document may be circulated, quoted, or reproduced for
distribution outside the Africa50 organization without prior written approval
of Africa50.
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Africa50 was created to help close the infrastructure gap in Africa
through private and PPP investments
▪ Africa50 was created as a vehicle to
complement the AfDB’s own
infrastructure investment funding
▪ Africa50 not only invests in fully
developed projects but also accelerates
the provision of infrastructure by
supporting project development in its
early stages
▪ Africa50’s mandate is consistent with
and supports the AfDB’s High Fives and
the Sustainable Development Goals
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Infrastructure spending in Africa, US $ bn p.a.
SOURCE: Infrastructure Stock and Spend Database; IHS; International Transport Forum
150
Gap: 30-40 p.a.
2025 required22025 projected1
110-120
▪ Overall funding need 2017-
25 estimated at US $1.2 tn
▪ Government and public
funding while critically
important, will not be enough
to bridge the gap
▪ Africa50 could unlock up to
US $50 bn in project value
through its equity
investments and value-add
capabilities
An illustration of the magnitude of the infrastructure challenge
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Limited
government
capacity to
implement
projects
Limited number of
early risk-takers
and credible
private players
Enabling
environment/
regulatory
constraints
Limited public
resources
Barriers to bridging the infrastructure financing gap
2 43
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
1
Budgetary
constraints and
inefficient use of
resources limit the
number of projects
the public sector
can fund
Public sector Private sector
3
5
Existing Africa50 shareholders have made a strong commitment
in support of the organisation
▪ Funding from 23 African
shareholder-countries, the
AfDB, the Central Bank of
West African States (BCEAO),
and the Bank Al-Maghrib
(BAM) – US $ 812 mn
committed capital
▪ Continued support, including
non-financial, from our
shareholders is critically
important to Africa50’s success
▪ Africa50 recently welcomed the
countries of Guinea and the
Democratic Republic of the
Congo as shareholders
Africa50 shareholder countries
New Africa50 shareholder countries
TunisiaMorocco
Senegal
Mauritania
Mali
Burkina
Faso
Ghana
Cote D'Ivoire
Sierra Leone
Cameroon
Nigeria
Togo Benin
NigerSudan
Djibouti
Egypt
Madagascar
Kenya
Congo
Gabon
Malawi
The Gambia
Democratic
Republic
of the Congo
Guinea
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Africa50’s investment strategy has 3 main pillars
Africa50-Project
Development
seeks to grow a
pipeline of
bankable projects
▪ Africa50-Project
Finance provides
primarily equity and
quasi-equity capital
alongside strategic
partners
DEVELOP
A Pipeline of
Bankable
Infrastructure Projects
ACCELERATE
Private
Investment into
African
Infrastructure
MOBILISE
Public and
Private Sector
Funding
▪ Public and Private Investors with priority on
mobilizing long term savings managed by
institutional investors from within and outside Africa
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… with a unique core value proposition…
▪ Close relationships with African government shareholders
and the AfDB which are critically important in the infrastructure
development and financing process
▪ Jurisdiction-specific risk mitigation through high level public-
sector engagement
▪ Preferential access to deal-flow generated from project
development activities and through ongoing dialogue with its
African government shareholders
▪ Experienced investment team with a demonstrated track
record of deal-making
▪ Access to competitive finance, including long-term debt
from the AfDB and broader DFI community, as well as existing
concessional funding
▪ International best-practice ESG standards
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…. and priority focus in the Power and Transport sectors
African annual infrastructure investment needed
▪ The greatest
investment need in the
future will be in power
and transport (68%)
▪ Both sectors also have
significant economic
and transformative
impact
▪ Africa50 will contribute
to expanding PPP and
private financing in
today’s typically more
commercially viable
segments (e.g., power
generation, ports,
airports, logistics, toll
roads)
Projected
infrastructure
investment needs for
2025 (% of overall
total)68%
18%
14%
31%
37%
Telecom
Water
Transport
Power
US $150 bn
2025
US $ bn p.a. (%)
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Africa50 Project Development: Increasing Pipeline of Bankable
Projects
▪ Identify projects through network and
shareholder support
▪ Engage stakeholders along deal cycle
through relationships (shareholders,
government and private sector partners)
▪ Identify and resolve obstacles to move
projects to financial close
▪ Mitigate risk by innovative structuring and
financial appraisal
PD Value Proposition
▪ Typically take significant minority stakes in
projects or platforms
▪ Play an active role alongside main sponsor
except for surrogate sponsor engagement
▪ Partner with other developers to complement
value proposition when beneficial
▪ Remain more flexible and understanding of
African realities
PD Ownership Model
▪ Project Concept
▪ Feasibility (Technical, E&S, Business, Legal)
▪ Land acquisition, approvals and permitting
▪ Contract negotiation and structuring (Offtake,
EPC, O&M)
▪ Financing, guarantees and financial close
PD Project Cycle Positioning
▪ Operate following a venture capital model
▪ Deploy risk capital in early stages
▪ Balance profitability and development impact
▪ Develop a large portfolio of projects
▪ Return Target : modest return on investment
on portfolio basis to ensure sustainability
▪ Ticket Size: US $2-10 million
▪ Current Allocation:10% of Africa50’s Capital
PD Sustainability Model
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Africa50 Project Finance : Catalyzing Private Investment in
Projects and commercial infrastructure funds
▪ Source proprietary investments through
Africa50 Project Development and other
sources
▪ Engage stakeholders post financial close
through relationships
▪ Access AfDB and DFI community for
preferential debt
▪ Mitigate risk during construction and
operation phases in markets perceived as
high risk
PF Value Proposition
▪ Typically take significant minority stakes in
projects or platforms
▪ Play an active role regardless of the type of
investment
▪ Provide capital alongside strategic partners
▪ Invest in and sponsor private sector funds to
mobilize institutional investors capital
PF Ownership Model
▪ Construction
▪ Testing
▪ Initial operation
▪ Steady state
PF Project Cycle Positioning
▪ Operate following a private equity model
▪ Provide primarily equity and quasi equity with
flexible exit options depending on projects
▪ Focus on profitability primarily without
overlooking development impact
▪ Return Target : differentiated return on
investment based on risk, impact and location
▪ Ticket Size: > generally US $20 million
▪ Current Allocation: 90% of Africa50’s Capital
PF Sustainability Model
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Africa50’s investments will lead to multifold impact and
mobilisation of financing
Assuming Africa50 takes a 30% share
of the equity
Direct equity investments
Assuming Africa50 funds 30% of
project development costs
Project development
- illustrations not to scale -
Assuming Africa50 seeds 15% of the
fund, and the fund takes a 60% equity
stake
Equity investments through
commercial fund
Africa50 equity
investment$27m
Total equity
investment$90m
x11 multiplier
Total project costs$300m
Africa50 project
development
investment
$4.5m
Total project
development
investment
$15m
Total project
costs at
financial close
$300m
x65 multiplier
Total equity
investment at
financial close
$90m
Infrastructure fund
equity investment
$8m
Total equity
investment$90m
x38 multiplier
Total project
costs$300m
Indirect Africa50
equity investment
$54m
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Nova Scotia Solar Plant in Nigeria – investment committed in
December 2016
▪ A Joint Development Agreement with Scatec Solar, Norfund and Africa50, for development of
a 100MWDC solar power plant in Jigawa state, Nigeria. Total project cost will be about US
$150 mn, with financial close expected in 2018 and operations in 2019
▪ Africa 50’s role: project development and long-term equity partner (24.5%). Facilitate
interactions with Government entities and prospective lenders, particularly AfDB
▪ Strong partners: Senior debt will be provided by OPIC, Islamic Development Bank, and
AfDB
▪ Strong fundamentals: Reliable solar resources and direct access to the grid under a 20-
year Power Purchase Agreement with Nigerian Bulk Electricity Trading
▪ Strong development impact: The plant will produce about 200 GWh of power per year,
contributing to the state’s US $2 bn development plan, and helping Nigeria meet its climate
change commitments, with an estimated 120,000 tons of CO2 emissions avoided annually
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Benban solar PV projects– investment committed in May 2017
▪ A Joint Development Agreement with Scatec Solar, Norfund and Africa50, for development of
a 400MWDC solar power plant in Benban, near Aswan in Egypt. The projects were developed
under Round 2 of the feed-in-tariff (FiT) program. Total project cost will be about US $430
mn, with financial close expected in October 2017 and operations in early 2019
▪ Africa 50’s role: Project development and long-term
equity partner (25%), relationship with GoE
▪ Strong partners: Senior debt will be provided by
EBRD, Islamic Development Bank, and Islamic
Corporation for the Development of the Private
Sector
▪ Strong fundamentals: Excellent solar resources
and interconnection facilities funded by all Benban
FiT developers under a cost sharing agreement.
Power sold to Egyptian Electricity Transmission
Company under a 20-year Power Purchase
Agreement, backstopped by the Government of
Egypt
▪ Strong development impact: The plant will produce
about 900 GWh of power per year, avoiding 350,000
tons of CO2 emissions annually