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Of the available options, one specific asset class stands out: infrastructure.Africa, which by 2050 will be home to an estimated 2.6 billion people, is in dire need of funds to build and maintain roads, ports, power grids and so on. According to the World Bank, Africa must spend a staggering $93 billion annually to upgrade its current infrastructure; the vast majority of these funds – some 87 percent – are needed for improvements to basic services like energy, water, sanitation and transportation.Between 2004 and 2013, African states closed just 158 financing deals for infrastructure or industrial projects, valued at $59 billion – just 5 percent of the total needed.Investment in African infrastructure is perceived as simply being too risky.Fortunately, with work, this perception can be overcome, as some investors – such as the African Development Bank, the Development Bank of Southern Africa, and the Trade & Development Bank – have already demonstrated. Fully funding Africa's infrastructure shortfall will require attracting many more investors – and swiftly.In 2012, the African Union adopted the Program for Infrastructure Development in Africa, which kick-started more than 400 energy, transportation, water and communications projects.Similarly, new financial products must be developed to give asset owners the ability to allocate capital directly to infrastructure projects.
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