In a significant milestone for African pension capital being deployed for domestic infrastructure and industrial development, the Public Investment Corporation (PIC), Africa’s largest asset manager, with over US$150 billion in assets under management, plans an inaugural investment in the Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider.
PIC has given formal notification to make a US$100 million equity investment in the AFC. The approved investment from the South African pension fund manager follows recent equity inflows to AFC from the Seychelles Pension Fund, the Government of Sierra Leone, the Republic of Togo, the Central Bank of Guinea and further investment from the Ghana Infrastructure Investment Fund, which are among the 32 equity investors in AFC. These investments further embed the active collaboration between African sovereigns, financial institutions and the private sector.
AFC has a proven track record of developing key transformational projects on the continent, providing pragmatic solutions for Africa's infrastructure deficit and challenging operating environment. The Corporation recently announced its joint acquisition of Lekela Power, Africa’s biggest renewables independent power producer (IPP), with plans to more than double operating capacity of the operating assets within four years. Other AFC projects include the ARISE Special Economic Zone (SEZ) in Gabon, an industrial ecosystem building value from the forestry and minerals industry, which was last year certified as the world’s first carbon neutral industrial zone by the Swiss verification group SGS.
“The PIC is delighted to partner with the AFC in the development, industrialisation and growth of the African continent,” said Kabelo Rikhotso, Chief Investment Officer for PIC. “Our clients’ investment mandates allow us to invest in the rest of the African continent. We believe that this partnership will assist us to deliver on that mandate and to diversify our growing portfolio. We are confident of the future prospect of this investment and its potential positive societal benefits.”
AFC’s investment footprint spans 35 countries across Africa and a pipeline of projects that blend positive social and environmental impact with superior risk-adjusted returns. The Corporation’s A3 investment-grade rating from Moody’s enables beneficial access to global capital markets and underscores the confidence of Africa’s decision makers in AFC’s role as a key institution for sustainable economic development.
As a shareholder, PIC will further benefit from co-investment opportunities and access to AFC’s formidable project development and risk-mitigated projects on the continent across the power, transport and logistics, natural resources, telecommunications and heavy industrial sectors.
“This equity investment is a significant vote of confidence in AFC and connects us to a very important source of capital in Africa,” said Samaila Zubairu, AFC President & CEO. ”African pension funds have a key role to play in financing the instrumental infrastructure urgently needed on the continent and we look forward to a long-term partnership for a prosperous African future.”
AFC was established in 2007 to be the catalyst for private sector-led infrastructure investment across Africa. AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.
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Fifteen years on, AFC has developed a track record as the partner of choice in Africa for investing and delivering on instrumental, high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. AFC has invested over US$10 billion in 35 countries across Africa since inception.