In a continent striving to close its infrastructure gap, Africa50, the investment platform established by African governments and the African Development Bank (AfDB), is rapidly becoming a key player. During its 2024 Annual General Shareholders Meeting, held in Antananarivo, Madagascar, Africa50 was praised by stakeholders, including the Presidents of Madagascar and Tanzania, for its critical role in addressing the continent’s infrastructure challenges.

In its relatively short seven-year history, Africa50 has mobilized over $1.1 billion in capital commitments and catalyzed an additional $4.4 billion in external financing. The platform is increasingly seen as a model for innovative financing mechanisms and strategic partnerships in Africa, helping to unlock large-scale infrastructure projects across the continent.

Africa50: A Game-Changer in African Infrastructure

Africa50’s role is pivotal, not just in raising capital but in driving transformational infrastructure projects that contribute to sustainable development and economic prosperity. In his address, Madagascar’s President, Andry Rajoelina, emphasized the importance of the institution in mobilizing financing for large-scale infrastructure projects. He highlighted Madagascar’s rich natural resources and its renewable energy potential, stressing the need for international support from partners like Africa50 to ensure the country’s transition to green and sustainable energy.

Madagascar, often seen as a model for Africa’s energy transition, has been leveraging its vast renewable energy resources to make progress toward a more sustainable energy mix. The flagship Sahofika project, for instance, has been instrumental in reducing Madagascar’s reliance on thermal power generation. Once completed, this project will reduce the share of thermal power to less than 10%, significantly cutting energy generation costs by more than 30%. President Rajoelina remarked on how such projects not only help the country but also set an example for the rest of Africa.

“Africa is not the problem. Africa is a solution,” Rajoelina stated, underscoring the continent’s potential to lead the global fight against climate change through sustainable development initiatives.

Addressing Health and Energy Issues in Africa

Tanzania’s President, Samia Suluhu Hassan, echoed Rajoelina’s sentiments about the transformative potential of Africa50. Although unable to attend in person, her message was delivered by the Minister of Finance and Planning, Mwigulu Lameck Nchemba Madelu. The Tanzanian President focused her speech on one of Africa’s pressing challenges: clean cooking.

According to the International Energy Agency, nearly one billion Africans rely on polluting fuels like wood and charcoal for cooking, leading to severe health impacts and causing about half a million premature deaths annually. Moreover, this dependency on traditional biomass fuels contributes to deforestation, further aggravating environmental challenges. President Hassan emphasized the importance of treating clean cooking as both a public health and business priority. She advocated for the use of microfinance schemes to provide low-interest loans, enabling households to afford clean cookstoves and transition toward cleaner energy solutions.

“It is crucial to make clean cooking affordable, especially in low-income areas,” President Hassan said, urging governments to introduce incentives for both producers and consumers to bring down the cost of clean cooking materials.

Africa50’s Broader Vision for Africa’s Future

The meeting drew global leaders, investors, and infrastructure experts who came together to discuss how to mobilize the necessary investments to secure a sustainable future for Africa. Dr. Akinwunmi Adesina, President of the African Development Bank Group and Chairman of the Africa50 Board of Directors, delivered a keynote address emphasizing the importance of Africa50’s work in bridging the continent’s infrastructure funding gap. Adesina praised Africa50 for its remarkable achievements, noting that the institution’s portfolio now includes 25 transformative projects across 28 countries, with a combined value exceeding $8 billion. These projects span multiple sectors, including energy, transport, digital infrastructure, education, and healthcare.

Africa50’s CEO, Alain Ebobissé, also took the opportunity to highlight the organization’s achievements over the past year. He pointed to the Africa50 Infrastructure Acceleration Fund, which secured $222.5 million at its first close in December 2023, primarily from African investors. This fund is the first of its kind on the continent and represents a significant milestone in mobilizing African capital for African infrastructure projects.

“Africa50 aims to mobilize and catalyze some of the $2.3 trillion that investors manage across Africa to finance critical infrastructure,” Ebobissé said. He further emphasized that the institution is focused on speed and scale in the implementation of projects, which is essential given the urgency of Africa’s infrastructure needs.

Clean Energy: Africa’s Golden Opportunity

One of the key opportunities for Africa, Ebobissé pointed out, is the potential for clean energy development. With over 60% of the world’s solar energy potential, Africa is in a unique position to lead the global shift toward low-carbon energy solutions. Africa50 has already been instrumental in securing significant foreign direct investment (FDI) for clean energy projects across the continent, even as global FDI declined by 3% in 2023.

By expanding its electricity supply and decarbonizing its economies, Africa can simultaneously achieve energy security and contribute to global climate goals. In the long term, this will not only improve the quality of life for millions of Africans but also make the continent an attractive investment destination, particularly in the renewable energy sector.

Transport Infrastructure: Driving Trade and Connectivity

While energy projects have garnered much of the attention, Africa50 is also playing a crucial role in improving transport infrastructure across the continent. In Madagascar, the African Development Bank has committed more than $1 billion toward infrastructure projects, with transport, energy, and agriculture accounting for more than 97% of its portfolio.

In his speech, Dr. Adesina highlighted the success of the corridor development and trade facilitation project in Madagascar. A key achievement has been the construction of 165 kilometers of roads, including the Analamisampy-Manja section and four bridges along the RN9. This project has dramatically reduced travel times, with journeys that once took 48 hours now being completed in just five hours.

This is not an isolated case; across the continent, transport infrastructure improvements are revolutionizing trade and travel. By improving connectivity, Africa50 is helping to unlock the economic potential of landlocked countries and regions, facilitating the movement of goods and people, and promoting regional integration.

Africa’s Investment Future

Looking to the future, Africa50’s vision aligns with broader projections for the continent’s growth. With Africa’s population expected to reach 2.5 billion by 2050, the continent is poised to become one of the most important consumer markets globally. This demographic trend, coupled with Africa’s vast natural resources and growing middle class, makes the continent an increasingly attractive destination for investors.

“We are determined to continue mobilizing capital, overcoming barriers to investment, and delivering transformative projects,” Adesina said, emphasizing that Africa50 is focused on creating a sustainable, inclusive future for Africa.

In the coming years, Africa50 is expected to play an even larger role in the continent’s development. Through its innovative financing models, the platform will continue to bridge the infrastructure gap, support clean energy projects, and improve connectivity — all while attracting significant foreign and domestic investment.

As Africa50 continues to exceed expectations, its work serves as a testament to the power of African-led solutions to African challenges. With strategic partnerships, strong leadership, and a clear vision for the future, Africa50 is well-positioned to help Africa achieve its full potential on the global stage.

Conclusion: The Path Ahead

Africa50’s journey has only just begun, but the progress made so far is a clear indication of the potential for impactful infrastructure development across Africa. By leveraging innovative financing mechanisms, fostering strategic partnerships, and focusing on sustainable development, Africa50 is not only addressing the continent’s current challenges but also laying the groundwork for a prosperous future.

The platform’s continued success will depend on its ability to scale up its operations, attract further investment, and remain responsive to the evolving needs of African countries. With leaders like Dr. Adesina and Alain Ebobissé at the helm, there is reason for optimism that Africa50 will continue to deliver transformative projects that bring lasting change to the continent.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

24th September, 2024