Millenium Challenge Corporation (MCC)
October 21, 2020
WASHINGTON, D.C., October 21, 2020 – The Millennium Challenge Corporation (MCC) and Africa50 signed a Memorandum of Understanding (MOU) to develop and launch the Millennium Impact for Infrastructure Accelerator (MIIA) Development Partnership.
The new MIIA entity will be a global investment platform designed to spur and attract impact investments in Africa by developing bankable infrastructure deals with measurable social and economic impacts. Investments through MIIA will cover projects across sectors such as water and sanitation, health, education, transportation, power, and telecommunications.
“Both MCC and Africa50 have a strong institutional commitment to mobilizing capital for impactful projects in Africa,” said MCC CEO Sean Cairncross. “This new collaboration will unlock economic opportunities on the continent, and I am excited to see what our work together will achieve.”
Africa50 CEO Alain Ebobisse stated that, “We are pleased to partner with the MCC to develop and launch the MIIA. This important initiative will enhance our efforts to develop bankable, projects across Africa with significant development impact. This will also help encourage capital flows into infrastructure, which is one of our core mandates.”
According to McKinsey, annual global demand for infrastructure development is $3.7 trillion through 2035, and developing countries are expected to account for roughly 2/3 of all infrastructure spending. The African Development Bank also estimates funding needs of $130-$170 billion a year in Africa, with a gap of $68-$108 billion.
Impact investing in infrastructure is limited, often due to the lack of bankable projects and the difficulty of measuring the development impact of investments. The MIIA will help overcome these challenges with features such as a certification process for the social and environmental impact of infrastructure projects, resources to prepare bankable projects with certified impact, and the framework to match these projects with impact investors who can provide capital.
MIIA will be launched in Africa jointly with Africa50 which has experience as a project developer and investor with deep regional knowledge and influence. Depending on the success of the initial effort in Africa, the MIIA could seek similar partnerships in Asia, Latin America, and Eastern Europe.
The MIIA is part of MCC’s blended finance strategy to mobilize private capital to create better opportunities and maximize the impact of projects that spur economic growth and reduce poverty. As an independent U.S. government agency, MCC works around the world with the best-governed developing countries, providing grant funding to unlock economic potential. Approximately two-thirds of the agency’s portfolio is in Africa.
Africa50 is an infrastructure investment platform that contributes to Africa’s growth by developing and investing in bankable projects, catalyzing public sector capital, and mobilizing private sector funding, with differentiated financial returns and impact. Africa50’s investor base is currently composed of 28 African countries, the African Development Bank, the Central Bank of West African States (BCEAO), and Bank Al-Maghrib.
Learn more about MCC at www.mcc.gov.
Learn more about Africa50 at www.africa50.com