A fund managed by asset manager Ninety One plans to invest $1 billion in African and Asian projects over the next three years. The firm manages $242 billion around the world.
The Emerging Africa & Asia Infrastructure Fund has been running for almost 25 years. It invests up to $350 million a year and expects that amount to grow, said Martijn Proos.
Proos is the co-head of emerging-market alternative credit at Ninety One and the managing director of the fund.
“If you roll that forward and you bring that to $350 million to $400 million per annum, then you get over the next three years that $1 billion amount,” he said in an interview.
The fund holds an active portfolio worth about $1.7 billion. Almost 85% of that money is invested in more than 25 African countries. The rest is in Asia.
Most of the new money will go to solar, wind, biomass and hydropower projects, Proos said. The fund will also back off-grid power systems for industries and businesses.
He said these projects aim to meet rising demand for electricity as countries move to cleaner energy.
Other investments include electric vehicles, fibre networks and data centres, he said. Ports, border post concessions and toll roads are also on the list.
“We’re seeing the opportunity in Africa where there’s still a big infrastructure-finance gap, but enormous need for capital as well,” Proos said.
“Power is still slightly over 50% of our portfolio and also our pipeline looks like that. The economies are growing; there’s more need for power and at the same time the system needs transition,” he said.
Africa has the youngest and fastest-growing population in the world. According to the African Development Bank, the continent needs between $130 billion and $170 billion a year for infrastructure.
The bank estimates that Africa falls short by between $68 billion and $108 billion each year.
The fund gets permanent equity capital from European governments, including the UK, the Netherlands, Sweden and Switzerland. Canada and Australia also add money.
Moody’s Ratings gives the fund an A2 investment-grade assessment. About 60% of its investment money comes from bank loans.
The fund’s loan book has about 80 borrowers, Proos said. When they repay, the money goes back into new projects.
That money is added to credit from lenders such as South Africa’s Standard Bank Group and Absa Group, as well as Sumitomo Mitsui Banking Corp, he said.
“We have over $1 billion of debt facilities available to us and we will continue to renew and increase bank financing as required to fund our growth,” Proos said.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.