Out-Law News | 01 Jul 2014 | 4:41 pm | 2 min. read
IFC, part of the World Bank Group, said its support for the $120 million Jabi Lake mall project in Abuja aims to “support demand for modern business infrastructure and retail space”.
The mall, which will be Nigeria’s largest, is being built on five hectares of land and will serve “as a catalyst for urban development” in the surrounding area, IFC said. IFC’s investment in the mall, which will have more than 30,000 square metres of retail space, is $9.5m.
IFC said the mall “will be the largest retail development of international standard in Abuja and create links to the local economy throughout its construction and operation”. Jabi Lake “will create new sales channels for Nigerian retailers, including local small and medium enterprises”, IFC said.
Construction began on the project in late 2013 and is expected to be completed in 2015. The project’s primary sponsor is the Actis Africa Real Estate Fund 2 (AR2). Duval Properties is the joint venture partner with Actis, a private equity firm that invests in Africa, Asia and Latin America.
IFC’s country manager for Nigeria, Solomon Adegbie-Quaynor said: “Our investment is part of IFC’s strategy to help strengthen business infrastructure, contribute to economic growth, and increase job opportunities in Nigeria.”
AR2 director Amanda Jean Baptiste said: “Investing in the Jabi Lake mall demonstrates Actis’ commitment to developing world-class retail destinations and adding to the domestic infrastructure in Nigeria, as well as our support for the growing demands of a rapidly changing economy. Our partnership with IFC will help us draw on their expertise in international best practice in the environmental and social aspects of the project that affect property development.”
In October 2012 Actis confirmed the final close of AR2, its second African real estate fund, with total commitments of $278m. The fund is focused on retail and office developments in East, West and Southern Africa, excluding South Africa. Projects have included what Actis said is Ghana’s “first green office building”, One Airport Square in Accra, and East Africa’s largest retail centre, Garden City in Nairobi.
Actis invests exclusively in emerging markets. The company said earlier this month that it currently has $6.5bn funds under management.
IFC is the largest global development institution focused exclusively on the private sector. IFC said its funding for infrastructure projects alone in Africa has reached $1.5 billion, with its ‘InfraVentures’ division joining private sector partners to develop wind power projects in Tanzania and Kenya. In West Africa, IFC has invested in aviation companies and mobilised funding for the port of Lomé “to expand the transportation network and improve trade infrastructure in the region”.
Through InfraVentures, the World Bank Group has set aside a $150m fund from which IFC can draw to initiate project development in the infrastructure sector. IFC serves as a co-developer and provides expertise while partially funding project development.
According to a report on market attractiveness in Africa, published earlier this year by consultancy firm Ernst and Young (EY), foreign direct investment projects in the real estate, hospitality and construction sector increased by 63%, making the sector the fifth most attractive.
EY said: “Africa’s cities are now emerging as the hotspots of economic and investment activity on the continent. Nearly 70% of respondents stressed the significance of cities and urban centres in their investment strategy in Africa.”