Allianz Commits to Funding African Infrastructure

By CultureBanx Team

  • Allianz is investing $120M in the Emerging Africa Infrastructure Fund
  • Only 35% of people have access to electricity

Allianz announced it’s funding infrastructure projects in Africa by investing in the Emerging Africa Infrastructure Fund (EAIF) to the tune of nearly $120 million. Could this encourage other major financial institutions to look more closely at investing in what are generally considered risky African projects?

Why This Matters: Africa has become more attractive for investors as the continent offers long-term growth opportunities. Some of those factors include positive demographic trends, a growing middle-class and increased urbanization. The European firm is going to make this investment over a 12 year period. “We believe in Africa’s growth potential and will invest across different asset classes across the continent,” said Sebastian Schroff, global head of private debt at Allianz.

The continent’s infrastructure has been continually under-invested in. Even the World Bank noted that most of sub-Saharan Africa has infrastructure shortages. More specifically, only 35% of people have access to electricity. Investments like this could really help to lift the overall economy of many countries on the continent.

EAIF is part of the Private Infrastructure Development Group, an organization supported by donors who actively encourage investment in the private sector of the world’s poorest countries. Allianz’s investment is part of part of a $385 million total funding round for the group. Also, it’s the first long term commitment from a institutional lender to a donor-backed African infrastructure fund.

Situational Awareness: In addition to Allianz’s investment, the African Development Bank returns as a lender to EAIF, providing a total of $75 million over 10 years. These investments have encouraged about $11 billion of private sector funding and helped an estimated 128 million people gain access to new and improved infrastructure.

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