First African infrastructure performance index to launch in Q1 2019

Planet Earth South Africa zone. Elements of this image furnished by NASA © rakchai / 123RF Stock Photos

In the first quarter of 2019, RisCura will be launching what it calls Africa’s first infrastructure performance index in partnership with Africa Investor Capital.

The infrastructure index will be pan-African, including North Africa, and will cover various sectors including power, transport, renewable energy and social infrastructure, says Hubert Danso, chief executive officer and chairman at Africa Investor Capital.

“What we’re seeing around the world is this increasing interest in infrastructure assets because of all the perfect alignments between the nature of infrastructure as an investment class, as well as the type of long-term capital that is available that is seeking the types of returns that infrastructure can offer,” says Danso. “But what we noticed in the continent is that there’s an information deficit in terms of the data that’s available to assist investors, as well as the consultants to investors . . . to be able to evaluate the actual performance of infrastructure as an investable asset class as it relates to Africa.”

The main purpose of the index will be providing analytical benefits that institutional investors can use as a tool. “An index of this nature is just one of the key tools that contributes towards providing the critical data to assist both domestic as well as global asset owners and pension funds [to] be able to evaluate the performance of African infrastructure as an investable asset class,” says Danso.

Various factors have recently led to a slowdown in the region’s economic activity, according to a statement by Heleen Goussard, head of unlisted investment services at RisCura. “Many would argue that the inadequate supply of infrastructure services is one reason for this,” she said, noting many African countries have limited financial room to spend more on infrastructure.

“The solution lies with alternative sources of finance – institutional investors,” Goussard said. “Pension funds’ long investment horizon make them especially suited to infrastructure investments. The potential for these investments to deliver a predictable cashflow stream over a sustained period, coupled with an element of inflation protection is attractive for institutional investors.”