U.S. Position on an AfDB Equity Investment in Africa50 

April 23, 2014

Africa50 is an ambitious undertaking that holds the potential for meeting critical infrastructure 

needs in the region. The United States would like to thank President Kaberuka for his vision

and leadership and note its appreciation of the responsiveness of the African Development 

Bank’s (AfDB) management to U.S. questions and feedback over the past year. 

The time is ripe for a major push for infrastructure investment in Africa. Sub-Saharan Africa is 

the world’s fastest growing region but growth potential remains significantly constrained by the 

lack of infrastructure. As African leaders across the continent note, this persistent deficit 

threatens to hold back their countries’ social and economic gains. Indeed, the challenges posed

by the dearth of infrastructure led President Obama to launch the Power Africa initiative in 2013, 

and the United States greatly values the African Development Bank’s role as a vital partner in 

this initiative. 

Africa’s infrastructure financing gap is staggering. An estimated $38 billion of investment per 

year is needed and a further $37 billion per year is required when taking into account the often 

neglected but vital maintenance costs for existing infrastructure. This brings the overall annual 

financing need to $75 billion a year – more than ten percent of Africa’s total GDP. While Africa 

is an increasingly appealing destination for private capital, a number of barriers continue to deter 

investors. These include information asymmetries, high risk perception, a dearth of bankable 

projects and, all too often, the absence of strong legal and regulatory frameworks that are 

conducive to private investment. Ideally, Africa50 will help address these challenges which go 

beyond a financing gap. In that vein, the United States particularly welcomes the project 

preparation business line and its focus on preparing and delivering bankable infrastructure 

projects.

Though the United States supports the objectives of Africa50, the United States. has had 

concerns with key components of its design and operations, especially with regards to its 

financing structure and the application of African Development Bank safeguard and procurement 

standards. The United States thanks Bank management for working closely with us to address 

these concerns, especially in recent days. In particular, the United States welcomes assurances 

that equity investments will be phased in and that AfDB financing for both the business 

development and planning components will be contingent on leveraging other sources of capital 

on a 4:1 basis. That said, the United States would have preferred more certainty with respect to 

possible sources of other capital, the country of incorporation and the project pipeline. With 

respect to the pipeline, the United States urges management to prioritize projects with strong 

development impact, including in renewable energy and regional transportation. 

On safeguards, the United States. is very pleased that AfDB safeguards will be applied to all 

Africa50 projects. This commitment greatly increases U.S. confidence in the potential for 

Africa50 to support vital infrastructure needs while protecting the region’s environment and

vulnerable populations through? with the long-term perspective of sustainable and equitable 

development. 
The United States is disappointed that the AfDB’s procurement standards will not apply to all 

projects, though the U.S. presumes they will apply in the event there is AfDB co-financing. The 

U.S. would appreciate management’s clarification on this point. 

Finally, the United States wishes to be recorded as abstaining due to legislative mandates and 

the uncertainty regarding the procurement standards.