An initiative aiming to bring together financial resources to address Africa's infrastructure challenges has been launched on the fringes of the ongoing AU Summit.

The Pan-African Infrastructure Development Fund is targeting an initial $1.2 billion to be invested in cross national and inter-regional projects in areas such as energy, transport, water and sanitation.

The launch was preceded by a presentation on the massive resource potential, both human and material available on the continent and the immense benefits a synergy of the resources would bring.

It is however believed that lack of infrastructure is hindering the realization of these ideals and the economic advancement of Africa.

The Infrastructure Development Fund, a brain child of the New Partnership for Africa's Development NEPAD is a long term investment which hopes to garner resources to fund infrastructure projects that would benefit at least two countries at anytime.

The fund managers believe the massive amounts of pension funds on the continent could offer better yields when channeled into this fund.

Implementation of at least two of the Funds’ priority projects is expected to begin within the next 18 months and its managers are optimistic that it would meet the initial target of $1.2 billion.

A total of $625 million worth of commitments made to the Fund so far have come from a number of major investment houses and banks in South Africa and Ghana's Social Security and National Insurance Trust.

The initial contributors to the Fund described it as a practical approach to the integration of the continent.

Tshepo Mahloele, the Chief Executive of the Fund, said apart from opening up land locked economies to the ports, the projects will also help collapse inter-country borders. It will also bring railways across countries.

But he said the Fund will not invest more than 25 percent of its commitment in one region to ensure that commitments are spread throughout the continent, and in any one sector, no more than 30 percent investments will be made to commitments at any one time.

Ghana's Finance Minister, Kwadwo Baah Wiredu said the fund would help redirect the massive outflow of funds from the continent.