Africa Largest Pension Fund Exits Infrastructure Development Fund

Africa’s largest pension fund South Africa's Government Employee Pension Fund has divested from its holdings in the pioneering African Infrastructure Development Fund, a along with other prominent investors, including Absa Bank Ltd and Old Mutual Ltd.

Why does it matter: The African Infrastructure Development Fund has been instrumental in financing various crucial infrastructure and power initiatives across the continent. Among its key holdings are significant projects, such as the Lanseria International Airport, a critical gateway that enhances connectivity and facilitates economic growth, and the Kelvin Power Station, which plays a pivotal role in meeting South Africa's energy demands.

• According to a report by the African Development Bank, Africa faces an alarming infrastructure financing gap estimated at $108 billion.
• This shortfall poses a considerable obstacle to achieving the essential infrastructure development necessary for the continent's economic progress and overall viability.
• In light of this context, both Chinese and Western nations have emerged as critical stakeholders in efforts to bridge this financial gap

The decision to divest follows a $360 million strategic acquisition of the fund by a consortium of investors—led by Harith General Partners, a the South Africa-based private equity firm, Zungu Investment Ltd and Mergence Investment Managers.