South Africa Expects $100B Infrastructure Fund From U.S.-Africa Leaders Summit

South Africa Expects $100B Infrastructure Fund From U.S.-Africa Leaders Summit

Written by Nasreen Seria | From Bloomberg

South Africa sees the creation of a $100 billion fund to finance infrastructure projects on the continent as one of the key outcomes from the U.S.-Africa Leaders Summit this week.

About 40 African leaders meeting with U.S. President Barack Obama in Washington over the next two days will discuss the possibility of setting up the fund, South African Transport Minister Dipuo Peters said in an interview in Washington today. An announcement may come from Obama or Vice President Joe Biden, she said.

The U.S.-Africa Infrastructure Development Fund will seek to have equal contributions from the U.S. and Africa, South African International Relations and Cooperation Minister Maite Nkoana-Mashabane said on Aug. 1. The financing will go toward supporting “regional integration and Africa’s industrialization,” she said.

“There’ll always be a need for infrastructure funding,” Peters said. “The terms and conditions still need to be worked out and that will determine South Africa’s response.”

African nations have a funding shortfall of $50 billion a year to ease energy shortages and transportation bottlenecks, according to the World Bank. Last month, the so-called BRICS group of nations, which includes Brazil, Russia, India, China and South Africa, agreed to create a $50 billion development bank to fund projects and serve as an alternative source of finance from the World Bank.

Business Deals

U.S. officials haven’t disclosed any plans for an infrastructure fund. The Obama administration has said it expects more than $900 million in deals to be signed at this week’s summit, with an emphasis on development driven by private business.

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