WASHINGTON, D.C., September 22, 1999 — The
International Finance Corporation has invested in the largest equity fund
ever established for investment in privately-owned infrastructure projects
in Africa, the AIG African Infrastructure Fund (AIF). World Bank Group
President James D. Wolfensohn hosted a ceremony marking the occasion of
the fund's closing of $400 million and announced that Nelson Mandela, former
president of South Africa, had agreed to chair the fund's advisory board.
AIF, a 10-year term private equity fund, was created with IFC's close involvement
to mobilize financing from strategic and institutional investors for private
sector infrastructure projects, which will total about $2.5 billion across
IFC Executive Vice President Peter Woicke said that "countries across
the continent need to significantly expand infrastructure systems and services
as a platform for sustainable economic growth. African governments are
adopting policies to encourage private investment and open up crucial infrastructure
enterprises through privatization. The success of this fund is an endorsement
of those policies and a reflection of investor confidence in Africa,"
he said, adding that it is part of the supply-side response that African
reformers have been seeking.
The fund represents a significant financing source for infrastructure projects
in Africa and is expected to stimulate foreign investment, lead to institutional
development in the infrastructure sector, and promote the growth of capital
markets in the region, especially local debt markets. It will invest in
projects that will bring improved services to consumers, such as affordable
and more reliable electricity, better roads and bridges, efficient telecommunications
and transportation, and enhanced services for water and sewerage treatment.
IFC has committed $75 million in equity—representing 15 percent of the
fund size—to AIF. IFC will also take an ownership stake in the fund manager,
AIG African Infrastructure Management LLC (AIM), and may co-invest with
AIF, an additional amount of up to $25 million for its own account, in
sub-projects which are of particular interest.
American International Group, Inc. (AIG), the leading US-based international
insurance organization, is the project sponsor and leading co-investor
with a commitment of $75 million. As a sponsor of three existing infrastructure
funds in emerging markets, AIG already plays a significant role in mobilizing
private capital for investments dedicated to infrastructure. Other leading
shareholders of AIF are Midroc, the company owned by international investor
Sheikh Mohammed Al-Amoudi with $50 million; the African Development Bank
with $50 million, Development Bank of Southern Africa with $25 million;
and several other international investors and development agencies, including
the European Investment Bank and Proparco, which is the private sector
arm of Agence Française de Développement of France.
AIF will be advised by Emerging Markets Partnership (EMP), a Washington
D.C.-based international fund management company, which will also operate
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.