The main purpose of Africa Investment Facility (AfIF) is to support sustainable growth in Africa, it aims at fostering investments which will have a positive impact on the socio-economic development such as infrastructures in transport, communication, water, energy as well as agriculture and private sector development, in particular SME’s.
The Africa Investment Facility was created in August 2015 and started operating in November 2015. The Facility is an innovative financial mechanism that combines grants (non-refundable financial contributions from the European Union) with other resources such as loans from Development Finance Institutions in order to leverage additional financing for development and increase the impact of EU aid.
Similarly to the other EU blending facilities, AfIF acts as a catalyst to pool resources and improve the coordination and coherence of donor actions, thus conforming to the principles of ownership, partnership and shared responsibilities set out in the Paris Declaration on Aid Effectiveness and the subsequent Accra Agenda for Action(link is external) and Busan Partnership Agreement (link is external).
The Facility can support national as well as regional projects in all African countries eligible to receive financing under the EDF regional and national programmes as well as under the intra-ACP programme and the DCI Pan-African Programme.
Resources can be made available from the different EU financing instruments (EDF and DCI), in coherence with the priorities established in the EDF Regional Indicative Programme, relevant EDF national indicative programmes, the intra-ACP programmes as well as the Pan-African Indicative programme. AfIF interventions should focus on the following sectors: energy, agriculture, transport, environment, water and sanitation, climate change, SMEs, information and communication technologies (ICT) and social services, support to private sector development, in particular, Small and Medium Enterprises (SMEs).
AfIF provides its support through:
- Investment grants
- Technical assistance
- Risk capital and other risk-sharing instruments
The final beneficiaries of the Facility will be the partner countries, either directly or indirectly through their central, regional and local administrations or public or semi-public institutions. Other final beneficiaries can be the private sector and in particular households and SMEs for categories of operations dedicated to the private sector development.
AfIF sets up partnerships, pooling grant resources from the EU and using them to leverage loans from multilateral and bilateral European Finance Institutions as well as from regional and Multilateral Development Banks. These resources can often be pooled together with contributions from partner countries and beneficiary institutions in Africa.