Project detail - EMERGING AFRICA INFRASTRUCTURE FUND

Who is our customer

The Emerging Africa Infrastructure Fund is a debt fund which provides loans to infrastructure projects in Africa. It was established in 2001 and has since then committed over USD$ 1.3bn to more than 70 projects in developing countries. The Fund is financed by equity from the Private Infrastructure Development Group (“PIDG”) and supported by loans from both Development Finance Institutions such as FMO, and commercial banks. The PIDG was created by the governments of the UK, Sweden, Switzerland and The Netherlands with the objective to provide financial solutions to bridge market gaps in infrastructure projects in emerging markets. From the start onwards FMO has played an important role in supporting EAIF through not only funding but also via knowledge sharing through for example staff secondments.

What is our funding objective?

To stimulate the Emerging Africa Infrastructure Fund to provide funding for infrastructure projects in Emerging Markets with the aim to address the lack of available LT foreign currency debt finance and to support infrastructure projects that promote economic growth, reduce poverty and benefit broad-based population groups. The new transaction is the result of a longstanding and strong partnership between FMO and the Fund.

Why do we fund this investment?

The Project fits FMO’s mandate and strategy as it will be 100% allocated to finance Renewable Energy projects. We furthermore co-operate well together whereby the Fund has proven to be a reliable, professional and constructive partner in many joint transactions. SDG’s 7 (Affordable and Clean Energy), 8 (Decent Work and Economic Growth), 9 (Industry, Innovation and Infrastructure), 11 (Sustainable Cities and Communities) and 13 (Climate Action) will be applicable to this proposed transaction.

What is the Environmental and Social categorization rationale?

Due to the nature of its financing, more than a quarter of existing and potential transactions can be categorized as high E&S risks (Category A) with significant adverse Environmental and Social (E&S) risks and impacts. Some 40% of the portfolio is expected to have E&S risks and impacts that are less adverse and reversible in comparison to Category A, however higher than medium (Category B+). The other third is expected to have limited adverse E&S risks and impacts that are few in number, generally site-specific, largely reversible and readily addressed through appropriate mitigation measures (Category B). Due to the diverse nature of its potential investments (both in geography and sector) and the potential of high E&S risk projects, this Fund has been classified as Category A. The Fund Manager will be required to ensure compliance of the investments made with FMO’s Exclusion List, applicable national laws and regulations and maintain an ESMS in line with the IFC Performance Standards.

More investments

Date	Total FMO financing
6/19/2018	USD 25.00 MLN
6/19/2018	EUR 25.00 MLN