Fund boost for Africa infrastructure

The Fund aims to provide long-term finance for infrastructure projects

The UK government, development institutions and some commercial banks have set up a fund to raise finance for African infrastructure projects.

The fund has so far raised $305m, according to Standard Bank, the main bank responsible for seeking pledges.

The Emerging Africa Infrastructure Fund (EAIF) will provide long-term finance for projects such as transportation, power, telecoms and water, areas it has proved difficult for the African public sector or aid projects to finance.

"No amount of public expenditure by governments in Africa and... any conceivable amount of aid money, can pay for all these things, and give the kind of uplift to Africa that it needs," Clare Short, UK development secretary, said.

The Emerging Africa Infrastructure Fund (EAIF) is targeting commitments of $405m altogether, said Jacko Maree, chief executive of Johannesburg-based Standard Bank.

So far, the UK government has given $100m, while British bank Barclays and Standard Bank have both put in $60m, said Mr Maree.

Other donors include government-sponsored development agencies from Germany, Holland and South Africa.

Thinking big

EAIF forms one tranche of attempts to raise $64bn annually for African development which has been dubbed a new Marshall Plan for Africa.

African leaders will be vigorously promoting the wider plan at the World Economic Forum of government leaders, central bankers and other international figureheads in New York over the next six days.

The plan is the brainchild of President Thabo Mbeki of South Africa, who will address a session of the Forum alongside the Nigerian and Senegalese presidents on 1 February.

Known as the "New Partnership for Africa's Development" (NEPAD), the plan sets targets for democracy and good governance.

The bigger NEPAD fund received a dose of cold water from a senior Canadian official on Wednesday.

Canada will host the G8 summit of seven industrial nations plus Russia in June which is being asked to endorse the foundation of NEPAD with contributions.

Robert Fowler, a Canadian prime ministerial aide charged with responsibility for the G8 meeting, said: "The conditions are not there for a Marshall Plan to be successful."

African leaders' "speeches and hopes about this are a bit premature", he said.

"I think we have to maintain fairly modest attempts since the resources which will be available for these steps will be limited, as will be the ability of Africans to absorb them."