Entry to Exit Report

African infrastructure is heavily underinvested in as capital providers overplay risk associated with projects. This has created a forecast $1.7 trillion funding gap - amongst the highest in the world.

Constrained public finances mean investment is beginning to lean more heavily on the private sector. Preqin data shows they are stepping up to the challenge, investing nearly double the amount into infrastructure between 2011 and 2020.

By putting an AIIM investment, the Bakwena toll road, under the microscope, Preqin demonstrates how highly investable African infrastructure really is.

The 385km highway, connects South Africa’s capital of Pretoria to the border with Botswana, a key commodity and export route. As a GDP-linked asset, performance is driven by inflation and traffic growth, outstripping operational expenditure, with the right team in place.

Experience in the space has helped maximise value from the asset, as AIIM Investment Director Ed Stumpf explains, “De-risking the assets over the course of their life supports the long-term value creation for our funds and feeds into the eventual exit once the assets have achieved a track record of mature operations.”

AIIM exited the asset in 2016 in what is thought to be the largest private toll road transaction concluded in Africa to date. Its legacy lives long beyond the capital provided, but in the effective management of Bakwena and the numerous opportunities provided to a number of people from marginalised demographics.

Find out more about the Preqin Entry to Exit series and the Bakwena story here.