At the European Investment Bank’s Global Forum in Luxembourg, officials and investors examined the €300 billion Global Gateway plan and asked how Europe can draw private capital into African industrial projects.
Institutional investors need investable assets, not just persuasive projects
Dr. Hubert Danso, chair of Africa Investor, said the problem is not a shortage of money but a shortage of structures that meet the mandates of large funds. “The world does not suffer from a shortage of capital. It suffers from a shortage of investable development,” he told the audience.
Global institutional investors collectively manage more than $300 trillion in assets, but they allocate funds according to predefined benchmarks, risk parameters and asset‑class specifications. Projects that do not fit these templates rarely attract large‑scale funding.
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Current African development finance statistics illustrate the mismatch. For every dollar of public development aid, only $0.20‑$0.38 of private capital follows, far below the long‑standing target of $10 of private financing per development dollar. By contrast, European instruments have shown the ability to leverage up to €15 of private investment for each €1 of public money, according to statements made at the forum.
Building the right investment architecture
To close the gap, the forum highlighted two practical steps. First, investor access to risk data for Global Emerging Markets must be broadened, allowing funds to assess opportunities against the transparency standards their portfolios require.
Second, cooperation among Global Gateway, the European Investment Bank, the European Commission, the EBRD and institutional investors should focus on creating new asset classes that can absorb large sums of capital.
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Historical examples reinforce the point. The Yale University endowment helped birth venture‑capital markets, while Canadian pension funds such as CPP Investments spurred global infrastructure allocations. Norway’s sovereign wealth fund has driven responsible‑investment standards. In each case, investors were not passive financiers; they helped design the investment vehicles that made large‑scale capital flows possible.
Dr. Danso summed up the forum’s message: “Mobilising private capital at scale requires a shift in mindset. The task is not simply to make investment developmental — it is to make development investable. That means aligning opportunities with institutional investors’ mandates and working with them not only as providers of capital, but as partners in designing and scaling asset classes capable of absorbing capital at scale.”
Europe’s ambition to deepen industrial links with Africa therefore hinges on reshaping development finance into a format that satisfies institutional investors’ criteria. When that transformation occurs, the flow of private capital should follow automatically, guided by mandates and benchmarks rather than by individual project pitches.
