Infrastructure finance remains one of the greatest obstacles to sustainable development in emerging and frontier markets. The Private Infrastructure Development Group (PIDG) launched the Emerging Africa Infrastructure Fund in 2002 to address these challenges directly by leveraging blended finance to crowd in private investment. In 2023, the fund expanded its remit to include Asia, becoming the Emerging Africa and Asia Infrastructure Fund (EAAIF).
The Emerging Africa and Asia Infrastructure Fund
Abstract
Infrastructure finance remains one of the greatest obstacles to sustainable development in emerging and frontier markets. In regions such as sub-Saharan Africa and Southeast Asia, infrastructure deficits undermine access to energy, water, sanitation, transport, and communications. Yet private capital - essential to bridging the estimated USD 2.5 trillion annual Sustainable Development Goals (SDG) financing needs - remains scarce in these high-risk environments, hindered by long project horizons, policy uncertainty, limited credit enhancement tools, and a lack of bankable pipelines. The Private Infrastructure Development Group (PIDG) launched the Emerging Africa Infrastructure Fund in 2002 to address these challenges directly by leveraging blended finance to crowd in private investment. In 2023, the fund expanded its remit to include Asia, becoming the Emerging Africa and Asia Infrastructure Fund (EAAIF).
The EAAIF was established as an open-ended blended finance debt fund, structured to de-risk infrastructure investments through anchor equity cushion provided by PIDG donor governments and multilateral partners, including Australia, Canada, the Netherlands, Sweden, Switzerland and the United Kingdom. This equity absorbs losses ahead of senior debt lenders, enabling private investors and multilateral development banks (MDBs)/development finance institutions (DFIs) to participate on commercial terms. Among senior lenders are major institutional investors and banks, such as Allianz, SMBC, ABSA and Standard Bank, as well as MDBs like the African Development Bank (AfDB) and DFIs like KFW (Germany’s main development bank), FMO (the Dutch Entrepreneurial Bank) and Swedfund. To enhance its credibility and broaden its investor base, the EAAIF obtained a Moody’s A2 foreign currency long-term issuer rating in 2024, reflecting the fund’s strong capital position and portfolio diversification.
Since 2016, the fund has been managed by NinetyOne (formerly Investec Asset Management), a sustainability-focused asset manager with vast experience in sovereign, corporate and private credit in African and wider emerging markets. Their leadership has helped improve the fund’s impact and the quality of its investment pipeline. The EAAIF’s simple capital structure, which consists of just two tiers including its senior debt and equity structures, has only made it easier to attract investors of a broad variety. The fund also features a key sustainability mechanism: its first-loss equity tranche has recycled over USD 175 million in retained earnings back into the fund, ensuring continued concessionality without needing constant donor replenishment.
[The EAAIF has demonstrated a commercially viable model for crowding in private capital in high-risk markets, having directly committed over USD 2.5 billion to infrastructure projects and mobilised an additional USD 16.5 billion in private investment across over 115 deals. Its portfolio spans ten sectors - including energy, transport, water, and digital connectivity - and has benefited more than 154 million people while creating over 24,000 long-term jobs. The fund’s clean, standardised structure and A2 Moody’s credit rating have helped attract institutional investors, while the recycling of USD 175 million in retained earnings has reinforced its financial sustainability and reduced long-term dependence on concessional capital.
The EAAIF could be scaled, for example in terms of capital base, geographical reach, or thematic coverage - with both more public and private capital and a stronger pipeline of bankable projects, facilitated by, for example, technical assistance and pipeline support from donors and other development cooperation partners.
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