NEW EMERGING AFRICA FUND WILL TARGET TELECOMS
Following a successful competitive tender the UK’s DFID has selected a consortium led by the Standard Bank Group, together with Barclays PLC, the Netherlands Development Finance Company (FMO) and Emerging Markets Partnership (EMP), to establish the Emerging Africa Infrastructure Fund (Emerging Africa) to make available long-term debt financing for private sector infrastructure companies in sub-Saharan Africa. Emerging Africa is to be managed by Standard Infrastructure Fund Managers (Africa) Limited, a Standard Bank Group, FMO and EMP joint venture.
Emerging Africas initial financing comprises committed equity capital of US$100 million, underwritten by DFID; a tranche of US$85 million of development finance debt from FMO, DEG and DBSA; and US$120 million of commercial debt from Standard Bank Group and Barclays. DFID is combining with other European donors to provide additional equity capacity to enable Emerging Africa to grow to around US$450 million on a similar level of gearing. Among the sectors it will target will be telecoms.
The innovative structure of the fund has reduced the risk of lending to levels that will enable Emerging Africa to offer competitive long-term lending terms within a 15 year period, to significant infrastructure companies throughout sub-Saharan Africa. The majority of lending will be US$ based, although the Fund may also offer guarantees to local banks to facilitate local currency lending where this is beneficial.