The South African Government Employees’ Pension Fund has committed $250 million (€184 million) to the Pan African Infrastructure Development Fund’s $625 million fundraising, according to someone close to the fund.
The fund which was unveiled last month is targeting a $1.2 billion close in the next year as it looks to court investors in the US, Europe and the Far East having raised capital exclusively from African investors for its first close. The fund was unveiled last month at the African heads of state conference in Ghana. It received the backing of various African leaders, including South African leader Thabo Mbeki.
According to news agency Reuters the fund hopes to attract $20 billion over its 15-year lifespan. The fund’s chief executive Tshepo Mahloele told the agency the largest US pension fund the California Public Employees’ Retirement System and bank Credit Suisse were interested in investing in the fund.
Projects reportedly mulled include an airport in West Africa, a toll road in Nigeria and a hydro-electric dam in the Democratic Republic of Congo.
The fund is considering 21 possible projects across Africa. Private equity firms have been active in the drive to develop Africa’s infrastructure with a record $6.9 billion invested in the continent year to date, according to data provider Dealogic. However, much of the investment is targeted at wealthier countries in the north of the continent as well as South Africa.
Despite this lack of investment, development agencies such as UK government-backed CDC have worked across the continent for many years applying private equity techniques. There are signs that the current wave of investment across Africa is beginning to increase, with a $523 million fund raised by Emerging Capital Partners for pan-African investment.