IFC considers $150m for Africa infra fund

The IFC is considering coordinating $150m in senior debt for the $600m Emerging Africa Infrastructure Fund, which is managed by a division of Standard Bank. The fund supplies long-term debt to finance private infrastructure projects across Africa.

The International Finance Corporation (IFC), the private sector investment arm of the World Bank, is considering coordinating loans of up to $150 million for a fund that provides credit to private infrastructure projects in sub-Saharan Africa, according to a proposal on the IFC website.

The fund, called the Emerging Africa Infrastructure Fund (EAIF), supplies long-term debt denominated in US dollars or Euros to finance private infrastructure projects in 45 countries across Africa, according to the proposal. The EAIF provides investments of $10 million to $30 million for any single project, with a tenor of up to 15 years, according to the EAIF website.

The IFC Board of Directors is expected to decide on the investment on 7 July. If the proposed investment is approved, the IFC would provide a $45 million loan to the EAIF and coordinate an additional $105 million in loans from other development finance institutions.

The EAIF, which has grown in size from $305 million to $600 million since its inception in 2002, has invested in over 25 projects from a range of sectors, according to the EAIF website. The IFC said in its project summary that the $150 million in senior debt would be necessary “in order to enable the Fund to meet its projected pipeline of projects through 2013”.

The EAIF is managed by Frontier Markets Fund Managers, which is a division of Standard Bank, according to the EAIF website.  The EAIF’s equity sponsor, which provided $150 million for the fund, is the Private Infrastructure Development Group, whose current members include public development agencies in the UK, the Netherlands, and Sweden, the Swiss Secretariat for Economic Affairs, and the IFC, according to the Group’s website.

The IFC said it had previously committed a senior loan of $36.25 million and a liquidity facility of $12.5 million to the EAIF.

The IFC has also been planning to raise a $1 billion private equity fund for infrastructure investments in “frontier” markets outside of the BRIC (Brazil, Russia, India, China) countries. In May, the IFC Board of Directors approved an equity commitment of up to $200 million to the fund, called the Global Infrastructure Fund (GIF), which will be managed by the IFC Asset Management Company. The IFC hopes to raise an additional $800 million from “large global institutional investors,” according to the GIF project summary.