Africa offers an abundance of opportunities for investment. The resources sector plays a leading role when it comes to attracting investment on the continent, particularly in the hydrocarbon, base and precious metals sectors, though investment in other sectors continues to grow in significance. In an effort to support these investments, it is critical to continue developing and investing in Africa’s infrastructure across all sectors.
The African Development Bank’s most recent estimation of infrastructure needs is between USD130 billion and USD170 billion annually, but the continent’s available capital is insufficient to support this level of spending. Currently, just a fraction of the AfDB’s estimate is being spent – USD45 billion per annum.
Africa’s continued growth is supported by the world’s most favourable demographic profile and by improvements in political and economic governance across the continent. Better governance has meant that there have been improvements in overall macroeconomic policy management, leading to increased fiscal stability and relatively more prudent monetary policy. This has contributed to greater competition, increased productivity and enhanced corporate growth. Opportunities abound for increased investment by the private sector in the continent’s infrastructure.
Against this backdrop, two well-known businessmen from the African continent, Johann Rupert (chairman of Remgro Limited) and Phuthuma Nhleko (chairman of Phembani Group), working with an experienced African infrastructure team, identified a particular niche and commercial opportunity for investment in private infrastructure across Africa. During 2012, they established a joint initiative, the Pembani Remgro Infrastructure Fund (“Fund I”), managed by a team with an established track record of infrastructure finance and transaction execution on the African continent. Fund I was designed with the appropriate profile and strategy for investors wishing to benefit from Africa’s vast opportunities.
The manager of Fund I is Pembani Remgro Infrastructure Managers Proprietary Limited, which is owned jointly by Remgro Limited, Phuthuma Nhleko and the investment team. Pembani Remgro is based in Johannesburg. Collectively, the investment team has over 200 years of global infrastructure investment experience and broader investment and transaction execution experience in Africa. Fund I and Pembani Remgro were established during 2012, and the fund received its initial capital from Remgro and Phuthuma Nhleko as cornerstone investors. Since then the key focus of the investment team has been to source and acquire investments, and the team has been successful in closing a number of investments.
In May 2014, Fund I embarked on a global fundraising and achieved its first close in the second quarter of 2015 and final close in the third quarter of 2016.