Meeting in Davos ahead of the 2018 World Economic Forum, the World Pensions Council (“WPC”), an international organisation bringing together a wide range of pension executives and board members from Europe, Asia and the Americas, and Africa investor (“Ai”), an institutional investment platform for African sovereign wealth and pension fund institutions, entered an agreement to help mobilise one per ent of the $39 trillion of assets owned by pension investors worldwide towards African infrastructure investments at both the national and regional level.
The Ai-WPC agreement builds upon and supports the New Partnership for Africa’s Development 5 per cent Agenda (known as the NEPAD 5% Agenda), a collaborative partnership between African asset owners (essentially pension and sovereign wealth funds) and African governments, to mobilise $30 billion of African domestic capital, through a new de-risking framework named Institutional-Investor Public Partnerships (“IIPPs”).
Launched at the NASDAQ in September 2017, during the 72nd Session of the UN General Assembly, the NEPAD 5 per cent Agenda is designed to de-risk and thus facilitate a substantial net increase in African institutional monies allocated to African infrastructure from 1.5 per cent on average today, to 5 per cent of assets owned within an ambitious five-year timeframe. Today, we’re reaching out together to asset owners in the Global North to broaden the blueprint for African development, and territorial attractiveness.
Hubert Danso, CEO and Vice Chairman, Africa Investor (“Ai”), commenting on the partnership said: “A recurring question from the global institutional investment community is why should we invest our retirees’ money in African infrastructure when domestic African pension funds themselves aren’t doing so. Our continent needs to lead by example: the NEPAD 5% Agenda has responded robustly to this question through the establishment of a new kind of partnership between African asset owners (pension and sovereign wealth funds) and African governments, to mobilise $30 billion of domestic African capital.
At the same time, the need for new projects is such that we need to bring in additional long-term capital from our friends in Europe, Canada, Australia, the Middle East, China and North America, who can share in the risks and rewards of real-asset ownership in our economically dynamic continent. Africa investor is therefore delighted to partner the World Pensions Council and other pension associations in support of mobilising, 1% of global pension assets towards African infrastructure. By scaling up the investments we need to tackle the environmental, logistical, urban and educational challenges we face in the short-medium term, we will assist develop African infrastructure as an investable asset class and offer long-term asset owners the superior risk-adjusted returns future generations of retirees will require. This is not yet another aid project, but the start of a new, collaborative investment adventure, where private co-investors, foreign and domestic, and their public partners, share long term resources and returns efficiently: making good by doing good.”
M. Nicolas J. Firzli, Director-General, World Pensions Council (“WPC”), Co-Chair, World Pensions Forum (“WPiF”), said “Africa investor and the NEPAD 5% Agenda are at the forefront of financial innovation on the continent: we’re happy to lend them our support as they reach out to new institutional partners beyond the shores of Africa. Importantly, there is that progressive realisation on the part of policy makers, asset owners and civil society at large, that the cross-cutting challenges we face, such as climate change and the migrant crisis, and the impetus to fast track economic growth through infrastructure development are, as it were, tightly interwoven.
We need holistic, win-win solutions: by mobilising rapidly more private capital towards productive infrastructure projects from Morocco to Madagascar, we will accelerate the overall pace of economic development across the continent, whilst, simultaneously, help cash-rich asset owners from the ageing ‘Global North’ acquire long-term interests in the transportation, energy and socio-educational assets of the future”
