The development financing arm of the UK government, British International Investment, intends to invest US$6 billion (R100 billion) in Africa over the following five years including areas such as helping women-owned businesses and digital infrastructure.
The expenditures, which are a part of a $10 billion global program, include a $76 million investment to a $500 million fund that Old Mutual’s African Infrastructure Investment Managers are hoping to establish and which was revealed on Wednesday.
“Investment priorities will be driven by the size of the economy, and the development needs in that economy,” according to an interview with BII CEO Nick O’Donohoe.
The BII’s investment intentions coincide with a flurry of competition among development finance organizations for the funding required to address climate change issues in Africa and meet demand for digital connectivity, from France’s Proparco to Germany’s KFW Group. The African Development Bank estimates that the region requires an annual investment in infrastructure of up to $108 billion.
While focusing on the “powerhouse” markets of Ethiopia, Kenya, Nigeria, and Egypt, BII, formerly known as CDC Group, is only permitted to engage in the private sector. However, some funds will flow to South Africa due to that country’s efforts to draw in climate funding.
The organization last week decided to lend around $157 million in debt and equity to Oslo-based energy producer Scatec ASA for a solar and battery-storage project in South Africa, according to moneyweb.co.za.