Last week it was announced that General Electric, Mara Group and Atlas Merchant Capital are joining forces to create a venture that will focus on making infrastructure equity investments in a number of, as yet unspecified, countries in Africa. The initiative is squarely aimed at the opportunity presented by the continent’s social and demographic changes and its highly underdeveloped infrastructure sector.
With forecasts putting Africa’s population hitting 1.5 billion people within the next 10 years, the continent’s economic growth potential is very significant. The partnership will target high growth sectors such as power generation, transport, oil and gas as well as others including mining and will lead equity deals alongside other sponsors, leveraging its relationships with banks and development finance institutions to facilitate debt requirements for individual projects.
Current estimates put the continent’s infrastructure investment requirement at $360 billion between now and 2040, with an additional $90 billion needed each year for the next decade to upgrade and maintain the continent’s existing infrastructure assets.
“We all know painfully well the imperative to fill Africa’s annual $50 billion infrastructure funding gap,” Akinwumi Ayodeji Adesina, the African Development Bank’s President said, commenting on the news. “Partnerships like these are a crucial part of the development agenda as we seek to promote social and economic development and fight poverty in Africa.”