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25 January 2002
Standard Bank leads in Africa infrastructure fund
Standard Bank has led an international consortium that has been appointed by the British government to establish and run a R3.5 billion (US$305 million) fund that will finance commercially viable private sector infrastructure projects in sub-Saharan Africa. Standard Bank has also invested R700 million in the fund, which aims to alleviate poverty and facilitate economic growth.
The Emerging Africa Infrastructure Fund (Emerging Africa) will be managed by Standard Infrastructure Fund Managers (Africa) Limited, a new Mauritius-based joint venture led by Standard Bank with partners FMO, the Dutch development finance institution, and Emerging Markets Partnership of the United States (EMP). It will operate with support from Emerging Africa Advisers, a division of Standard Bank London.
Emerging Africa will provide long-term debt finance to commercially viable private sector infrastructure projects in 44 African countries, excluding South Africa and Mauritius, which are deemed to be able to attract such finance already.
The project is the brainchild of the British government’s Department for International Development (DFID), which is the fund sponsor. DFID has underwritten the initial equity of US$100 million. Standard Bank and Barclays Bank have each committed US$60 million, the Development Bank of South Africa US$25 million, FMO US$40 million and DEG, a German development finance institution, US$20 million. The fund is expected to grow to US$450 million.
Standard Bank’s Project Finance team, drawing on their extensive experience in arranging finance for a multitude of projects in Africa over the past seven years, developed the financial structure of Emerging Africa.
Says Jacko Maree, Standard Bank Chief Executive: "We believe the fund will demonstrate real benefits of cross-regional collaboration between public and private sectors and bring economic prosperity to the continent. The fund seeks to make a lasting impact on poverty elimination in sub-Saharan Africa by enhancing and facilitating economic growth and providing a new source of long-term debt finance for infrastructure projects.
"We are proud that our credentials and experience in Africa gave the DFID the confidence to select us to play the leading role in this initiative that will help the continent to rebuild itself and become a force in the world. We see it as a practical step towards helping achieve the objectives of NEPAD (New Economic Partnership for African Development) and President Thabo Mbeki’s African Renaissance vision."
Emerging Africa will consider a wide range of projects including greenfield developments, privatisations, refurbishments, upgrades and expansions. Emphasis will be on the following sectors:
- power generation, transmission and distribution;
- telecommunications;
- transportation (roads, railways, ports, airports, gas/water pipelines); and
- water (supply, distribution, treatment/purification).
- The fund will seek to be co-financier with other international and regional/local lending institutions, making investments per transaction ranging from US$10-30 million.
Emerging Africa follows Standard Bank’s role in establishing the South Africa Infrastructure Fund in 1998. This fund has to date invested more than R500 million in infrastructure projects in southern Africa. The group expects specialised funds management in emerging markets to become an increasingly important element of its global franchise.
For further details contact:
FMO
Joost Zuidberg
Tel: 0931 70 314 9801
EMP
Paul Applegarth
Tel: 091 202 331 9051
DFID
John Hodges
Tel: 0944 20 7917 0116
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