Arthur Moloto, Chairman of the South African Government Employees’ Pension Fund, Africa’s largest pension fund, addressed delegates at the 4th Annual Africa Conference on investment in infrastructure across the continent, outlining the strategy and rationale behind its investments in the region.

 

The Government Employees’ Pension Fund is Africa?s largest pension fund, with 1?270?298 active members and 360?799 pensioners and beneficiaries. It has more than R1.1-trillion in assets under management and is the single largest investor in Johannesburg Stock Exchange-listed (JSE) companies. It has significant holdings in government bonds and invests in unlisted equity and property.

 

Arthur Moloto told delegates at the conference in Nairobi, “Africa?s economic development and growth prospects are worthy of our attention. It would be irresponsible for us not to see the many investment opportunities right on our doorstep.”

 

Diverse reports calculate that the African annual rate of economic growth will be approximately 6 per cent between 2010 and 2040. These were good reasons to be optimistic said Moloto, but warned, “We have to find innovative approaches to confront the infrastructure deficit which is currently sabotaging Africa?s development.” Moloto called on governments and financial institutions to develop capacity and new financial tools for “a continent that is still young and vigorous in terms of its institutions and, at the same time, also bursting with economic potential”.

 

GEPF has responded to this opportunity by redesigning its investment strategy specifically its strategic asset allocation towards investments, to provide a significant economic contribution to the African continent. To this end, 5 per cent (approximately US$7-billion) of assets under management has been allocated for investments on the Continent (excluding South Africa). To date GEPF’s mandates in infrastructure and private equity in Africa (Ex-SA) reflects a commitment of US$1.25-billion to both the Pan African Infrastructure Development Fund (PAIDF) and the Public Investment Corporation (PIC), GEPF’s asset manager.

 

Moloto said the diversification of GEPF’s investment portfolio was guided by its Developmental Investment policy, which rests on four pillars:

1.?????? Investments in economic infrastructure.

2.?????? Investments in social infrastructure (including healthcare, education, and affordable housing).

3.?????? Investments in sustainability projects.

4.?????? Investments in enterprise development and broad-based black economic empowerment (BBBEE).

 

Investments outside South Africa were still in the early stages said Moloto, but included projects such as CEC in Zambia and the Rabai Power and the Turkana Wind Power projects in Kenya, all through GEPF’s independent power producer Aldwych. The Lake Turkana wind farm alone would provide 300MW of clean power energy to the Kenyan grid.

 

Through PAIDF, GEPF has invested in Essar Telecom Kenya Holdings Limited (“ETKHL”), the fourth licensed mobile operator, which as of 2012 had 2.5-million active subscribers. In addition, as part of its focus on transport infrastructure, it has interests in TAV Tunisie, which is involved in the designing, financing, constructing, upgrading, owning and operating of two airports in Tunisia, namely the existing Monastir Airport and the new Enfidha Airport, 90km south of Tunis. GEPF has also invested in Main One, which was established to finance, construct, own and operate a subsea fibre-optic broadband cable system connecting Nigeria and Ghana to the rest of the world.

 

PIC, on behalf of GEPF, took a 20% equity share in Ecobank Transnational Incorporated (ETI), a leading Pan-African full-service banking group, with over 750 branches across 34 countries in Sub-Saharan Africa.

 

Moloto said that GEPF began investing on the African continent back in 2008 and while it had taken “only baby steps” so far, it was now “well on its way to accelerating investments in Africa north of our border”.

?

Issued on behalf of the GEPF by:

HWB Communications

 

 

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