May 18, 2024
British International Investment, FMO commit $116m to African Infrastructure Investment Fund
– By Godswill Odiong

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Development Finance Institutions (DFI) British International Investment (BII) and FMO have today announced a joint commitment to African Infrastructure Investment Fund 4 (AIIF4), managed by African Infrastructure Investment Managers (AIIM). Their investment aims to support AIIF4 in reaching its $500 million target fund size. The Fund had previously received a cornerstone investment from Old Mutual, the fund manager’s sponsor and a prominent African financial services group.

Anchor investor BII, the UK’s development finance institution, has committed $76 million, and FMO, the Dutch entrepreneurial development bank, has committed $40 million, to AIIM’s fourth pan-African fund.

AIIM, an experienced fund manager with one of the longest track records in infrastructure investment in Africa, will invest in high-impact infrastructure projects across the continent through AIIF4. The Fund will see AIIM build on the successful performance of its predecessor funds by investing across three priority infrastructure sub-sectors: renewable energy such as rooftop solar; digital infrastructure including mobile telecoms towers, data centres, and fibre optic networks; and mobility and logistics such as ports, roads and other supporting infrastructure.

AIIF4 will play a role in bridging the estimated infrastructure financing gap of c. $108 billion per year, by funding reliable infrastructure across the continent. AIIF4-backed projects will meaningfully boost productivity by creating jobs and stimulating economic activities, while the new and upgraded infrastructure will support inclusive development, improve standards of living for consumers and accelerate sustainable economic growth within many countries across the continent.

Moreover, at least 20 per cent of the capital committed to AIIF4 will be invested in climate finance qualifying projects which will directly contribute to reducing greenhouse gas emissions. Additionally, AIIF4 qualifies under the 2X Challenge based on AIIM workforce consisting of 50 per cent women, and its commitment to working towards increasing entrepreneurship, employment, leadership, and consumption opportunities for women in 30 per cent of AIIF4’s portfolio companies.

Ryan Wagner, Head of Infrastructure and Climate Funds, at British International Investment, said: “For over a decade, BII has proudly been an active partner to AIIM, an institutional fund manager with long-term industry expertise and on-ground knowledge of the Africa infrastructure space. We are pleased that our partnership alongside FMO and Old Mutual will serve to mobilise further capital to help meet AIIF4’s target size, playing a role in meeting Africa’s infrastructure needs. AIIF4 clearly aligns with BII’s core infrastructure strategy, and we are confident that our capital will help modernise cities and services and accelerate social and economic prosperity for people and communities across the continent.”

Diana Wesselius, Manager Private Equity Energy said: “FMO is thrilled to support AIIM in the first close of AIIF4 as a cornerstone investor and appreciates the commitment shown by the AIIM team toward climate finance and gender equality. Having also invested on the two predecessor funds, we see AIIM as a long-term partner in supporting infrastructure development in line with our strategy and look forward to supporting the advancement of the African continent’s infrastructure.”

This commitment from BII, FMO and Old Mutual contributes to UN Sustainable Development Goals 7 (Affordable and clean energy), 8 (Decent work and growth) and 9 (Industry, innovation, and infrastructure).

British International Investment plays a key role in the UK Government’s wider plans to mobilise up to £8 billion a year of public and private sector investment in international projects by 2025.  

Over the next five years, at least 30 per cent of BII’s total new commitments by value will be in climate finance. This will make it one of the world’s largest climate investors in Africa.

BII is also a founding member of the 2X Challenge which has raised US $10bn to empower women’s economic development.   

The company has investments in over 1,300 businesses in emerging economies and total assets of £7.7 billion.

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