DFIs commit $116m to support climate-adapted projects, women-led businesses in Africa

British International Investment (BII) and FMO, a Dutch development bank, say they have jointly committed $116 million to the African Infrastructure Investment Managers (AIIM), a private equity firm.

According to a statement on Thursday, the BII said it made a $76 contribution to African Infrastructure Investment Fund 4 (AIIF4), an Africa-focused investment fund managed by AIIM.

It said FMO also invested $40 million in AIIF4. 

The statement added that the investment aims to support AIIF4 to reach its $500 million target fund size.

It said it would support women-owned businesses and climate adaptation projects in Africa. 

“The Fund had previously received a cornerstone investment from Old Mutual, the fund manager’s sponsor and a prominent African financial services group,” the statement reads. 

“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.”

The UK’s development finance institution said at least 20 percent of the capital committed to AIIF4 would 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 percent of AIIF4’s portfolio companies,” it said. 

Ryan Wagner, head of infrastructure and climate funds, BII, 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 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, FMO, 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 in 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”.