THE African Development Bank (AfDB) raised almost $1 billion in contributions from regional governments for a fund to develop roads, ports and energy projects, said Donald Kaberuka, the institution’s outgoing president whose term ends in August.
The bank now plans to seek money from private African organisations, including pension funds and insurance companies, and later investors outside the continent, Kaberuka said in an interview on Thursday in the Kenyan capital, Nairobi.
The lender has also asked African central banks with “excess reserves,” and some have import-cover of as many as 10 years, to invest part of that money in the fund, he said.
Africa needs to invest $50 billion a year in infrastructure to keep pace with economic growth, according to the World Bank.
To help meet that need, nations are accepting a growing amount of foreign investment including from China, which more than tripled financing to the continent to $26 billion in 2013 from $7 billion in 2008, Bloomberg Intelligence said in a report June 19.
The fund, known as Africa50 and endorsed last year by finance ministers and central bank governors from across the region, is targeting $3 billion in initial fundraising and $10 billion in the longer run.
About $300 million will be spent on assessing the financial viability of projects and preparing them for investment, Kaberuka said.
Shareholders in the Africa50 fund will meet next month in Casablanca, Morocco. The fund, initially scheduled to be operational by March 2014, will start working next month, he said.
The AfDB’s loans and grants climbed 22% to $7.8 billion in 2014 from the previous year.