July 14, 2024

EAIF completes $294m debt raise in one of the largest blended finance debt packages for African infrastructure

4 min read

• Debt package bolsters EAIF’s plan to invest US$700 million in infrastructure over the next few years

• EAIF announces ambitions to expand loan portfolio to south and south-eastern Asian markets

• Moody’s reaffirms EAIF’s A2 credit rating

Private Infrastructure Development Group (PIDG) company, the Emerging Africa Infrastructure Fund (EAIF), has successfully raised $294 million of additional debt facilities, achieving over half of the Fund’s target to raise $500 million by 2025. The finance facilities demonstrate the Fund’s ability to mobilise private sector debt in one of the largest capital raises in recent years, led by a blended finance debt fund advancing infrastructure development across Africa.

Backed by prominent financial institutions, the package unlocks fresh capital to advance EAIF’s strategic, operational, and financial capabilities – enabling its investment portfolio to expand and meet rising opportunities in frontier and developing economies. The Fund will invest across various infrastructure assets, including those aligned with the energy transition, low-carbon economies, and energy-efficient smart cities. As a PIDG company, EAIF fulfils the Group’s key strategic priorities, focusing on pioneering infrastructure projects that offer an innovative, agile, and sustainable approach to delivering essential infrastructure services for economic development.

Allianz Global Investors led the financing on behalf of Allianz Group, one of the world’s leading insurers and asset managers, committing a further €75m and $50m to EAIF. Standard Bank, Africa’s largest lender by assets, provided a $75m multicurrency revolving credit facility with sustainability-linked features and a $25m sustainability-linked term debt facility. KfW, the German state-owned development bank, committed a further €60m loan to EAIF.

EAIF secured $385 million of debt capital in 2018, with KfW and Allianz among the participating lenders in the funding round, committing €75 million plus $50 million and €75 million and $25 million, respectively. The new finance package marks the maturity of Africa’s debt capital markets and illustrates the Fund’s ability to take on and manage risk while delivering sustainable returns and economic impact.

Since EAIF’s establishment in 2001, the Fund and its partners have completed 96 projects and mobilised total investment commitments of over $2.1 billion across 20 African countries and 10 infrastructure sectors. Reinforcing its leading position as an attractive vehicle for investors seeking exposure to the growing African infrastructure asset class, Moody’s reaffirmed EAIF’s foreign currency long-term issuer rating of A2 with a stable outlook as a testament to its strong capital position, diverse portfolio, and track record of success in Africa.

PIDG plays a unique catalytic role in increasing private investors’ appetite for investing in emerging market infrastructure and responding to macroeconomic trends and the climate crisis. To create impact on an even greater scale, EAIF plans to start investing in Asian markets this year and work even more closely with PIDG’s guarantee arm GuarantCo, development arm InfraCo, and PIDG Technical Assistance as the Fund progressively expands its Asia portfolio over the coming years.

Martijn Proos, Co-Head of Emerging Market Alternative Credit at Ninety One, the fund manager for the Emerging Africa Infrastructure Fund, said: “Over the last 20 years, we’ve developed a diverse portfolio, a unique business model and a distinct approach to investing for impact and returns, whilst maintaining a minimal default rate. The debt financing is a significant milestone and sign of private investor confidence that strengthens our ability to pioneer new models for infrastructure development – enabling the delivery of transformative projects in dynamic geographies, sectors and complex environments that otherwise would not be bankable. We thank Allianz, Standard Bank and KfW for their continued support. “

Philippe Valahu, CEO of PIDG, said: “Action on climate and nature, together with sustainable development, through new and improved access to infrastructure are the central focus of everything we do at PIDG. Marking this significant milestone means we are contributing to the goal of improving climate resilience and economic opportunities for 100 million people by 2030, as outlined in our strategy. But the challenges ahead are too great for any single organisation or country and will require more collaboration. We look forward to being part of this journey alongside our key partners.”

Aislinn Baker, Portfolio Manager, Development Finance, at AllianzGI, said: “We are delighted to see how the EAIF has been helping to unlock Africa’s potential over the last five years which underlines the decisive role private capital plays in blended finance. As one of the early movers in this area, we look forward to seeing how the projects financed by the EAIF will contribute to the further development of infrastructure assets and the energy transition on the continent and facilitate Allianz’s sustainable investment objectives in emerging markets.”

Andrew Pearce, Head of Leveraged Finance, Corporate and Investment Banking at Standard Bank, said: “Standard Bank’s sustainability-linked loans for EAIF reaffirm our commitment to the sustainable economic development of Africa and align with Standard Bank, EAIF and Ninety One’s shared ambition. Our footprint and expertise across the continent demonstrate that we see Africa’s development as intricately tied to advancing its infrastructure. Through our partnerships, we provide innovative solutions that offer value and transform Africa’s economy. This facility aligns with our strategic objective to deliver structured capital solutions that combine our clients’ sustainability strategy with our banking solutions and enhance value for our clients, businesses, and society.”

Dr. Thomas Duve, Director of Southern Africa at KfW Development Bank, said: “KfW has been financing EAIF since 2006 in various financing rounds as we strongly believe in the developmental impact that EAIF achieves. EAIF has clearly demonstrated that private sector financing can be mobilised to meet the substantial infrastructure needs in Sub-Saharan Africa if projects are structured adequately and experienced partners, such as EAIF, are part of the financing consortium.

As the mobilisation of private capital is an important target for KfW, we are very pleased to notice that KfW’s financing share in the recent financing rounds is constantly decreasing as private sector institutions, such as AllianzGI and Standard Bank, are gradually taking over the financing of EAIF.”

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