The Public Investment Corporation (PIC) has given formal notification to make a $100 million (R1.65 billion*) equity investment in multilateral financial institution the Africa Finance Corporation (AFC).
The investment will be the PIC’s first such contribution to the Nigeria-headquartered AFC and will be used for the continent’s infrastructure and industrial development efforts.
According to the AFC, the PIC’s investment will afford it “co-investment opportunities and access to AFC’s formidable project development and risk-mitigated projects on the continent across the power, transport and logistics, natural resources, telecommunications and heavy industrial sectors.”
“The PIC is delighted to partner with the AFC in the development, industrialisation and growth of the African continent. We are confident of the future prospect of this investment and its potential positive societal benefits.” PIC CIO Kabelo Rikhotso says in a statement issued on Tuesday.
“Our clients’ investment mandates allow us to invest in the rest of the African continent. We believe that this partnership will assist us to deliver on that mandate and to diversify our growing portfolio,” Rikhotso adds.
AFC President and CEO Samaila Zubairu says the PIC’s equity investment is a “significant vote of confidence in AFC and connects us to a very important source of capital in Africa.”
“African pension funds have a key role to play in financing the instrumental infrastructure urgently needed on the continent and we look forward to a long-term partnership for a prosperous African future,” Zubairu adds.
Through the investment, the PIC joins the AFC’s cohort of 32 equity investors, including the Seychelles Pension Fund, the Government of Sierra Leone, the Republic of Togo, the Central Bank of Guinea and the Ghana Infrastructure Investment Fund.
As Africa’s largest asset manager, the PIC has over R2.34 trillion of assets under management, with its largest client the Government Employees Pension Fund (GEPF) accounting for 89% of its assets.
Investing in SA
AFC was established in 2007 with the aim of becoming the key driver of private sector-led infrastructure investment across Africa and has an investment presence in 35 African countries, including South Africa.
The AFC recently revealed its joint acquisition of Netherlands-based Lekela Power – Africa’s largest pure-play renewable energy independent power producer – with Egyptian company Infinity Group, in a deal estimated to be worth over $1 billion.
Lekela Power contributes approximately 564 000MWh of clean energy to South Africa’s strained national grid every year through its Khobab Wind Farm, based in the Northern Cape’s Loeriesfontein. The wind farm is said to support about 170 000 households in the country.
*US$1 = R16.57