The 5% Agenda

Institutional Infrastructure Investment Allocation Agenda

Known as “The 5% Agenda”, the Institutional Infrastructure Investment Allocation Agenda is the cornerstone of Africa’s post pandemic infrastructure investment growth plan, encouraging
investment in just green transition.

The “Africa rising story” some 10 years ago demonstrated that agriculture and infrastructure development is fundamental to the continent’s sustained socio-economic transformation. Whilst various initiatives and programmes over the years have supported Africa’s reform agenda, mobilizing domestic and global institutional capital to facilitate job creation for Africa’s young population continues to be a fundamental challenge, hampering Africa’s economic transformation and competitiveness in the fast-growing green global industrial economy.

The 5% Agenda is the continent’s asset owner platform to increase investment allocations in investible African infrastructure to at least 5% of assets under management (AUM) (from less than 2% currently). Endorsed by African Union Heads of State, it provides an innovative, more aligned Institutional Investor-Public Partnership (IIPP) framework, a model that has successfully been deployed in Canada and Australia between pension and sovereign funds and government.

IIPPs seek to ensure that the investible assets meet their full potential; are delivered on time and on budget; unlock economic development; and receive the ongoing investment required to ensure they are regularly and properly maintained.

The 5% Agenda, is a catalytic investment accelerant that focuses on creating greater alignment between public-private finance mandates and more catalytic private investment pathways in order to fast-track and scale private capitals’ participation in the continents green transition and the delivery of Agenda 2063, as implemented through Institutional Investor-Public Partnership (IIPP) initiatives, such as The African Green Infrastructure Investment Bank (AfGIIB).

Under The 5% Agenda, African Union Heads of State are working with Africa’s institutional investment community and economic policymakers to define the interventions needed for relevant in-country programme financing and long-term private investment. Ultimately interventions that will help to accelerate financial close of investible regional and domestic infrastructure projects.

IIPPs are being formed to improve Africa’s attractiveness to large pools of global institutional capital and private investors. Significant pan-African and global investment alliances are being formed through the 5% Agenda to increase the availability of catalytic domestic co-investment capital and long-term equity at reduced costs and risk for Africa and global co-investment partners.
Championed by the AUDA Continental Business Network (CBN) and the African Green Infrastructure Investment Bank (AfGIIB), and endorsed by African Union Heads of State, The 5% Agenda plays a critical role in brokering IIPPs and delivers the following benefits:
GOVERNMENTS: Governments with limited funds and competing expenditure requirements, receive WORLD CLASS, essential and well-maintained infrastructure assets;
INSTITUTIONAL INFRASTRUCTURE INVESTORS: Institutional infrastructure investment takes place over the full life cycle of a climate friendly infrastructure asset, not just for an investment, economic or political cycle. This significantly improves the asset’s prospects of enhancing economic and private sector development, creating jobs and improving regional and domestic trade and investment competitiveness.
CONSUMERS and CIVIL SOCIETY: Benefit from reliable infrastructure delivery, budgetary discipline, and long-term real investment returns.
The increased 5 percent share of African institutional investment will have five key impacts for Africa’s green infrastructure development and financing:
Conglomerating and unlocking African institutional savings capital in order to implement bankable regional, domestic and trade-related infrastructure projects on the continent and industrial infrastructure projects that facilitate the African Continental Free Trade Area (AfCFTA) and the global decarbonisation agenda;
Bringing the Programme for Infrastructure Development in Africa (PIDA) and the African Unions’ Presidential Infrastructure Champions Initiative (PICI) projects to financial close in order to improve access to energy, transport, digital and trade-related infrastructure;
Broadening and deepening Africa’s primary and secondary capital markets;
Contributing significantly to regional integration and job creation; and
Facilitating co-investment partnerships with international institutional investors and financiers who are hesitant to allocate to African infrastructure in the absence of African anchor institutional co-investment partners.