Last week in brief...It must be said that things seemed strangely quiet in Africa's private capital markets last week. Perhaps that's because many key participants were whooping it up at the World Economic Forum in Davos. Or perhaps not. Either way we'll keep an eye out to see if the sector can recapture some of the momentum it brought with it into the New Year.
If there was an award for the biggest dollar number of the week, that would go to a new fund launch. A Shari'ah compliant infrastructure fund to be precise. The Islamic Development Bank's private sector arm and Indian private equity fund manager IL&FS Investment Management announced they were joining forces to launch a fund to back small and medium-sized infrastructure projects on the continent. No details of fundraising time horizons or anchor investors were revealed.
There were a couple of other items related to infrastructure deals last week, both in the power generation sector. In the first, InfraCo Africa announced that it is doubling the amount of capital it's committing to its equity investment in the Corbetti Geothermal project in Ethiopia. The capital now being committed will contribute around 20% of the funding required to start construction of the project's planned exploration drilling wells in 2018 as well as the development of a 10MW to 20MW pilot power plant next year.
In the second of the two items, the Emerging Africa Infrastructure Fund, which is managed by Investec Asset Management, has teamed up with a syndicate of development finance institutions in a debt refinancing deal for one of Mozambique’s newest power stations. The fund is providing $21 million of the total $189 million debt parcel being put up by the club of lenders. Others in the lenders club include the IFC, Proparco and FMO as well as ABSA Bank.
There were two private equity deals involving financial services targets announced during the week. The Public Investment Corporation or PIC is making an equity investment in ZAR X, one of South Africa’s newest stock exchanges. The value of the deal, which is being made on behalf of the Government Employees Pension Fund, was not disclosed. ZAR X is one of four new exchanges which have started operations in South Africa within the last 12 months.
Moving north to Kenya, Kuramo Capital closed its deal to acquire a stake in Sterling Capital, an investment bank. The New York-headquartered investment firm is acquiring the holding from existing shareholders Ahmed Ndope and John Kirimi for an undisclosed sum. As a part of the transaction, Kuramo’s Founding Partner and Chief Investment Officer, Walé Adeosun and his fellow Partner and Co-CIO Shaka Kariuki are joining Sterling Capital’s board.
To wrap up this week's note, we found a few interesting 2018 perspective pieces to share. Paul Boynton, Old Mutual Alternative Investments' CEO gives his outlook for private equity firms this year. Another piece by Kurt Davis looks at five themes which will help define private equity activity on the continent fin 2018. And funding technology startups was a topic of discussion. Insight into how to bridge the tech company funding gap comes from CNBC Africa, while Disrupt Africa's Tom Jackson looks at some of the recent initial coin offerings in Africa.
As always, you can review these and other stories by clicking through to this week’s preview issue of Africa Capital Digest.
Allan Cunningham is a senior media executive who has spent the last 15 years of his career working for some of the world’s most respected M&A and Private Equity media companies including Dow Jones’s publications Private Equity Analyst and VentureWire and most recently, The Deal. He has built a number of successful digital and event content businesses, both subscription and sponsor-supported, delivering information and content-marketing services to clients in the M&A and broader deal ecosystem. He recently struck out on his own and launched Rowayton Press, a multi-platform media company focused on the private capital opportunities in emerging and frontier markets. Mr. Cunningham holds a Bachelors degree from Liverpool John Moores University in the UK.