Africa has long been considered an appealing investment destination as it boasts untapped growth potential and has positive demographics. However, something that has often received an overwhelming amount of attention is the high demand for sustainable infrastructure development.
Because Africa has long been battling to minimise its infrastructure funding gap, Sanlam and Africa Infrastructure Securities (InfraSec) recently collaborated on a joint venture and launched the Sanlam InfraSec Infrastructure Fund.
The proposed fund will be based in Ireland, and will benefit from Ireland’s various trade and investment agreements with African countries. Sanlam said this will also enable inward investment from leading Development Finance Institutions (DFI’s) and international commercial investors due to its positioning and high governance standards.
“The fund is to be channelled into infrastructure projects on the African continent with an emphasis on economic growth, social upliftment and energy,” Sanlam said in a statement. “The fund will be aimed at leading international commercial and DFI institutional investors.”
Fund co-founders and executive directors, Kholofelo Molewa and Michael Brooks, said “although the appetite for investing in Africa is growing, we are still coming off a very low base relative to infrastructure demands.
“This will make our fund competitive, whilst leveraging Sanlam and InfraSec’s combined investment expertise, best-of-breed partners and on-the-ground knowledge and relationships in Africa,” they added.
InfraSec identifies appropriate investment opportunities and infrastructure projects across a broad spectrum of technologies, with a special focus on economic infrastructure, such as energy utilities, including renewable energy, and social infrastructure such as affordable housing.
The company said that together with Sanlam, their objective is to generate exceptional returns on a risk-adjusted basis by making equity and quasi-equity investments into a well-diversified portfolio of potentially high performing infrastructure equity investments on the African continent.
Ben Kodisang, CE of Sanlam Alternatives said the company “deliberately sought a partner experienced in African-focused infrastructure who has an established local presence to maximise future business growth”.
He added that Sanlam believes there is a huge amount of organic growth waiting to be unlocked over the medium to long term, along with greater synergies in the relatively untapped space of infrastructure investing in Africa.