$320 Million AIIM Fund Raised from three Continental
By Abdul Rahman Suagibu –
NEW AFRICA BUSINESS NEWS, Freetown, Sierra Leone- African Infrastructure Investment Manager (AIIM) has reached it threshold of its flagship Pan-African infrastructure fund AllF3. The AIIM raised $320 million from various investor base across Africa, Asia and Europe. In a statement, AIIM expounded from genesis, the organization has raised cumulative commitments of $2.2 billion over seven funds and carried out more than 56 transactions successfully in target Pan-African Markets.
As it hinged on diversification and predictable cash flows, AllF3 targets significant influence investments across the power, transport and midstream energy sectors in sub-Saharan Africa. These areas reflect the biggest disconnect between demand for critical infrastructure and supply of available capital.
The fund focuses on mid-market opportunities in these sectors; a space which is less competitive and carries less execution risk than the bigger brand deals; and gaining exposure to opportunities in countries with high growth prospect but lacking the scale to support mega deals. A key priority for AllF3 is also the continued implementation of a rigorous and ambitious Environmental, Social and Governance (ESG) strategy as part of its responsibility to all, stakeholders including the communities in which it operates.
AllM has fully restored the funds Social and Environmental Management System (SEMS) into the investment process for every single investment the fund makes and developed a robust measurement system to form in line to the UN Sustainable Development Goals which tracks the Performance of key impact metrics.
Limited Partners in Allf3 include existing Allf2 investors as well as new commitments from a high quality, diverse and global investor base demonstrating the ongoing attractiveness of Africa as an investment destination.
The support from existing investors and the trust, that non-Allf2 investors have placed in AllM in making their first Pan-African allocations through Allf3 is a trace of support for AIIM’s strategy and track record. AIIM’s on the ground team, has already pronounced a diversified portfolio of assets for the fund with nine investments concluded across the thermal power, renewable energy, ports and logistics and airports sectors; gaining exposure to operations across 12 African countries. Supported by the focus on mid –market deals with shorter construction periods, five of the assets in the AllF3 portfolio are already operational and delivering against their original investment thesis.
Heads of strategic Initiatives at AllM, said “Africa focused alternatives funds have concluded fundraisings of $2.5 billion on average per year over the last five years with final closes for Africa-focused infrastructure funds over this period averaging $233 million. The success of AllM’s fund raising against this backdrop demonstrates the confidence our deeply experienced investors feel in both team and the potential of Africa”.
Jurie Smart- Ceo of AllM noted “This fund epitomizes AllM’s broader investment thesis of building out domestic infrastructure in Africa and delivering sustainable economic growth across the region. AIIM’s 2.100mw renewable energy portfolio generated a total of 1.795 GWh of clean power last year, offsetting nearly 1million tones of Co2 equivalents and at a full generation, AllM projects will generate around 10% of Nigeria’s on grid generation, 27% of Mali’s on- grid generation and 17% of Ghana’s on-grid capacity.
“We are delighted that our investors share our vision for the African infrastructure opportunity and we are grateful to them for placing their trust in our proposition”
Closing of this fund, marshalls quantum of successful exists from previous funds including the Azara-Edo Power Plant in Nigeria and Kipeto Energy Limited in Kenya, which provided strong returns for the fund investors. Azura- Edo Nigeria’s first non-recourse project finance Independent Power Project (IPP) in almost two decades. The 461MW power plant supplies 14 million homes with electricity and accounts for 10% of the countries on –grid power supply.
AllM was an early co-developer in Azura and one of the largest equity investors in the project at the time of financial close, as well as subsequently chairing the board’s technical committee which over saw the completion of construction eight months ahead of schedule. AllM’s in house ESG experts were also involved in the project supporting on the development and implementation of ESG initiatives, from investment through to exist. The exit represents the largest exit by a private equity fund in the Nigeria power sector to date.
Olusola Lawson, Head of West Africa at AllM said, “AllM is proud to have played a role in delivering the pioneering Azura project over a period of seven years, initially as a co-developer and subsequently as a significant financial close equity investor. We continue to believe that the energy sector in Nigeria holds great potential, and this is evidenced by our recent growth equity investment in the Uquo Integrated Gas Project.
“The successful sale of our shareholding in Azura- Edo to existing shareholders also indicated their confidence in the country’s prospects and the future of the power sector. Importantly, it creates a marker for successful exists to both domestic and international investors in the nascent Nigeria power sector”.
For New Africa Business News Abdul Rahman Suagibu Reports, Africa Correspondent
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