The African Development Bank (AfDB) to endorse US$10bn infrastructure fund

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The African Development Bank (AfDB) is speeding up plans to finance power and rail projects in Africa. AfDB is set to endorse this week the Africa50 Fund, which is targeting US$10bn of equity from an initial capital of US$3bn, to finance infrastructure projects. Central bank governors and finance ministers across the continent are meeting at the bank’s annual conference in Rwanda’s capital, Kigali, to back the plan.

According to the World Bank, African nations have a funding shortfall of US$50bn a year to ease energy shortages and transport bottlenecks.

The AfDB is appearing to be competing with China which has invested heavily in the continent’s infrastructure. AfDB’s spending on the continent is dwarfed by China, which invested more than US$13bn in infrastructure in 2012 against the bank’s approved funding of US$9bn in 2011 with infrastructure projects accounting for US$3.4bn of the amount.

During his recent visit to Africa, Chinese Premier Li Keqiang said that China will boost its line of credit to African nations by US$10bn to US$30bn. He further pledged to almost double capital in the China-Africa Development Fund to US$5 bn. China Development Bank (CDB) and Exim bank publicly offered around US$110bn worth of loans to emerging markets beating the World Bank’s record of offering just over US$100bn between 2008 and 2010.

The AfDB is a multilateral development finance institution consisting of 77 African and non-African countries which funds a variety of public and private projects throughout the continent.