The Millennium Challenge Corporation (MCC) and Africa50 have just signed a memorandum of understanding. Its objective is to develop a partnership for the design and launch of the Millennium Impact for Infrastructure Accelerator (MIIA). It is a global investment platform that aims to stimulate investments in infrastructure, financially viable and with a high impact on development in Africa. Investments through MIIA will relate to projects in sectors such as water and sanitation, health, education, transport, electricity and telecommunications. The Memorandum of Understanding was signed between the Director General of MCC, Sean Cairncross and the Director General of Africa50, Alain Ebobisse.
According to McKinsey, the annual global demand for infrastructure development is estimated at $ 3.7 trillion through 2035. Developing countries are expected to account for about 2/3 of all infrastructure spending. The African Development Bank also estimates financing needs between $ 130 billion to $ 170 billion per year in Africa, and unmet needs between $ 68 billion to $ 108 billion.
“Impact investing in infrastructure is limited, often due to the lack of bankable projects and the difficulty in measuring the impact of investments on development,” it said in a statement. MIIA will thus help to overcome these challenges through mechanisms such as certification of the social and environmental impact of infrastructure projects. It will also help mobilize resources to prepare bankable projects with certified impact, and promote these projects to impact investors likely to make capital available.
MIIA will be launched in Africa jointly with Africa50, which is headquartered in Casablanca and has 31 shareholders, including 28 African countries, the African Development Bank, the Central Bank of West African States (BCEAO) and Bank Al -Maghrib. Depending on the results of its first activities in Africa, MIIA could form similar partnerships in Asia, Latin America and Eastern Europe.
As a reminder, the MCC is an independent US government agency that works with the best-governed developing countries around the world, in particular through grants that allow them to exploit their full economic potential. About two-thirds of the agency’s portfolio is in Africa. MIIA is part of MCC’s blended finance strategy which aims to mobilize private capital to create better opportunities and maximize the impact of projects that stimulate economic growth and reduce poverty.