dcaputo, Author at African Financial & Economic Data

24 Sep

Investment in renewable energy sector continues to power forward

Africa’s grid-connected electricity deficit coupled with its wealth of renewable resources, like sunshine, make it an attractive destination for energy investors. Africa Private Equity News, an industry information service, reports ongoing investment and strong deal activity in the continent’s power sector in August 2018.

“As both GDP growth and urbanisation in African continue to rise, the demand for power on the continent will increase exponentially. Renewable power will continue to make up the bulk of the new supply, in particular as: costs continue to drop; battery storage technology becomes more efficient allowing renewable sources to provide baseload supply; and renewable projects allow for the flexibility of multiple smaller projects in isolated regions or on mini-grids,” Andre Wepener, head of the power and infrastructure finance team at Investec, told Africa Oil & Power in an interview.

African Infrastructure Investment Managers (AIIM), an infrastructure-focused private equity fund and part of Old Mutual Alternative Investments, through its IDEAS Managed Fund, has acquired stakes in nine new solar and wind power plants in South Africa. When all these facilities are fully operational, expected at the end of 2020, they will provide an additional 800 MW of renewable energy capacity into the national power grid. “We are looking at almost R9 billion (US$611 million) in total capital expenditure across these power projects,” said Sean Friend, investment director at AIIM.

In another notable South African power deal, Vantage GreenX Fund Managers announced that through its second renewable energy fund, Vantage GreenX Note II, it has provided R2.05 billion ($139 million) of funding to a combination of six solar and wind energy projects with a combined capacity of 433 MW. Furthermore, Globeleq, an independent power producer, acquired Brookfield Asset Management’s South African renewable energy interests. The agreement will give Globeleq a majority shareholding in six projects totalling 178 MW.

In Senegal, a recent financing deal has cleared the way for progress on the Taiba Ndiaye wind power development. The project reached financial close on 30 July, with construction scheduled to begin in the near future. Operated by London-headquartered Lekela – a joint venture between Irish renewable energy company Mainstream and private equity investor Actis – and sponsored by French developer Sarréole, the site, when completed, will generate 158 MW.

Read more here: How We Made It in Africa

27 Jul

MallforAfrica and DHL launch MarketPlaceAfrica.com, a global e-commerce site

MallforAfrica and DHL are giving African merchants a global stage. This week the online retailer and delivery giant launch MarketPlaceAfrica.com: an e-commerce site for select African artisans to sell wares to buyers in any of DHL’s 220 delivery countries. The site will prioritize fashion items — clothing, bags, jewelry, footwear and personal care — and crafts, such as pictures and carvings.

MallforAfrica is vetting sellers for MarketPlace Africa online and through the Africa Made Product Standards association (AMPS), to verify made-in-Africa status and merchandise quality.

“We’re starting off in Nigeria and then we’ll open in Kenya, Rwanda and the rest of Africa, utilizing DHL’s massive network,” MallforAfrica CEO Chris Folayan told TechCrunch about where the goods will be sourced. “People all around the world can buy from African artisans online, that’s the goal,” said Folayan.

Current listed designer products include handbags from Chinwe Ezenwa and Tash women’s outfits by Tasha Goodwin.

16 Jul

New private equity fund commitments to boost growth of African companies

African companies will benefit from several new private equity fund commitments and investment partnerships announced during June 2018, according to Africa Private Equity News, an industry information service. These funds focus on a variety of sectors – including agriculture, renewable energy and technology – and will help businesses on the continent accelerate their growth.

South African private equity firm Agile Capital has launched a third fund of R1 billion (about $75 million) and is aggressively targeting fresh investments. While Agile’s existing portfolio is concentrated on the services, manufacturing, automotive and infrastructure sectors, the firm’s criteria for investment doesn’t exclude other industries. “We favour acquiring a controlling stake in any sustainable company poised for growth,” says CEO Tshego Sefolo.

Specialist forestry investor Criterion Africa Partners has announced the first close of its Africa Sustainable Forestry Fund II, with several institutional investors – including the UK’s CDC Group, Dutch development bank FMO and the European Investment Bank – making commitments of $81 million. The fund has a total target of $150 million, and invests across the forestry value chain.

Renewable energy continues to be a popular theme for investors, and Climate Fund Managers was therefore able to attract additional capital of $75 million to its blended finance facility, Climate Investor One (CIO), bringing the total third-close fund size to $535 million. The CIO, launched in partnership between FMO and South Africa’s Sanlam Infraworks, provides funding for renewable energy projects in the wind, solar and run-of-river hydro sectors in developing countries across Africa, Asia and Latin America. The three new investors are IMAS Foundation (a sister foundation to the INGKA Foundation – the owner of INGKA Group, which in turn owns the majority of IKEA’s department stores globally); Swedfund, the development finance institution of Sweden; and the Nordic Development Fund.

Gulf Capital, the Abu Dhabi-based alternative asset manager, revealed that Egypt is one of its target geographies for over $350 million it plans to invest in private equity over the next two years. “We are encouraged by what’s happening in Egypt. Egypt is growing above 5%, they devalued the currency, restructured the economy, introduced new investment laws, and foreign reserves are [at an] all-time high. If you look at the IPO market, it is 10 to 15 times oversubscribed,” the firm’s CEO Karim El Solh, told Gulf News.

Read more here: How We Made It in Africa

06 Jul

Africa’s Largest Data Center Firm Plans $73 Million Investment

Teraco Data Environments Pty Ltd. plans to invest about 1 billion rand ($73 million) as Africa’s largest data-center operator expands infrastructure to meet rising demand.

The closely-held business will have spent 4.5 billion rand on building data-services centers in South Africa when the current investment cycle ends in 2019, Chief Financial Officer Jan Hnizdo said in an interview Tuesday. Funding has come from a debt facility provided by Barclays Africa Group Ltd., also known as Absa, which is lending as much as 1.8 billion rand.

Teraco is investing to meet higher demand for data services in Africa as internet access improves and businesses adopt cloud-based technology. Internet giants such as Netflix Inc. and Facebook Inc. are seeking to reach more remote parts of the continent, while Amazon.com Inc.’s Web Services and Microsoft Corp.’s Azure need data storage

Teraco’s operations in Johannesburg are used by more than 200 African telecommunications providers and are able to provide 12,000 interconnections.

05 Jul

How resilient is the Kenyan economy?

The FT has a great special report on investing in Kenya. Highlights include pieces on devolution, President Uhuru Kenyatta’s “Big Four” legacy projects (including an ambitious plan to build 500,000 new homes), and the promises of the tech sector.

Meanwhile, nominal GDP growth is projected to remain respectable, despite sky-high corruption and generalized administrative failures in both the county-level and national governments.

And here is an excerpt from one of the pieces:

A 2016 report from New World Wealth, an independent South Africa-based research group, found that 8,500 of Kenya’s roughly 48m people controlled more than two-thirds of the country’s wealth.

Highly recommended.

15 Jun

Taxify, Uber’s biggest rival in Africa, is now worth $1 billion

Taxify battle to win the ride-hailing market in Africa and Europe has received a major shot in the arm.

The five-year old Estonian startup has raised $175 million in a funding round which values it at more than $1 billion—the coveted unicorn status. The round is led by German car giant Daimler, Europe-based Korelya Capital, and Taavet Hinrikus, co-founder of fintech company TransferWise. The round also saw participation from Didi Chuxing, the ride-hailing giant in China known for backing Uber’s rivals around the globe.

The investment is Daimler’s latest foray into the ride-hailing transport business after prior investments in European car transport companies, including Flinc, the German carpooling startup. As part of the deal, Daimler will join Taxify’s board and could also offer it access to Moovel, its transport-booking app, with a user base of 2.5 million.

Taxify currently operates in 40 cities—11 of which are in Africa—and is expected to use the new funding to power an expansion into more cities. Its expansion strategy will likely target only cities where the ride-hailing business has been “proven,” as CEO Markus Villing told Bloomberg last year.

Barclays Africa to join the Nigerian Stock Exchange as a broker

Barclays Africa plans to join the Nigerian Stock Exchange as a broker in July and is exploring opportunities in three other African countries, in a move to create access for foreign investors looking to tap into markets on the continent.

Garth Klintworth, head of markets for Barclays Africa Group, on Thursday said its subsidiary Absa Nigeria had acquired a securities licence in Nigeria, part of a wider plan to increase it presence in west Africa’s biggest economy.

Nigeria’s stock exchange, the third largest in Africa, has in the last few years said it was reviewing applications from leading global investment banks to join its trading floor to increase foreign investment in one of the world’s least tapped emerging markets.

Cape Town’s water crisis proves we need to think about water in a new way

Cape Town caught the world’s attention earlier this year with dramatic headlines that it could become the world’s first major city to run out of water, joining an ever-growing line-up of major cities, regions and nations facing comparable threats, including São Paulo, Mexico City, Barcelona, Bangalore, Nairobi, California; and Australia and large parts of the Middle East and North Africa.

A tough water-saving regime helped push back Day Zero for dry taps in Cape Town to 2019. But the crises around the world have surfaced deep patterns of disconnect in our relationships with water. At the same time, at a local scale, water has emerged as a lens through which to view the complex dynamics of politics, governance, privilege and agency in one the world’s most unequal societies.

The Khoikhoi pastoralists, thought to be the original inhabitants of what is now Cape Town, were drawn to the slopes of Table Mountain around 2,000 years ago for the freshwater springs and rivers that flow year round. They named the place Camissa, the “place of sweet waters.” The natural abundance of water also drew early Dutch settlers here in the 17th century to establish a supply station for ships crossing the seas for the Dutch East India Company.

Aqueducts, channels, an old sand filtration system, and other relics of an extensive colonial-era water infrastructure can still be found on the mountain. The growing modern city long ago outstripped these natural resources, however, and these local waters disappeared from everyday life. Rivers and streams were encased in concrete, recharge areas for underground groundwater stores were paved over, and distant catchment areas were tapped to feed the city. At the same time millions of liters of fresh water were channeled from the city out to sea every day in storm-water drains.

But the Cape Town water supply remains as dependent as ever on surface water collected in dams from rivers, and the ecological health of these rivers has long been neglected.

Zimbabwe launches a second state-owned airline

The first one is so indebted its planes are impounded when they land abroad. Will the second be any better?

HAVING one loss-making state-owned airline is bad enough. What, then, of a government that wants two?

Earlier this year Zimbabweans were startled to learn that the government had concluded a secret $70m deal to buy four second-hand Boeing jets from Malaysia to form the core of a new national airline, Zimbabwe Airways. This venture is supposed to compete with Air Zimbabwe, the flag carrier, which ran up huge debts thanks to poor management and ex-President Robert Mugabe’s habit of commandeering its planes so his wife could shop abroad.

The government hopes to stimulate tourism and business by reopening long-haul routes that are closed to Air Zimbabwe, whose planes can be impounded as soon as they land on foreign runways. It suspended flights to London’s Gatwick airport in 2011, for instance, after one of its planes was seized over an unpaid debt. It has since been banned from European skies because of concerns over the safety of its creaking planes.

Critics questioned the secrecy and the price paid for the new planes. The government had claimed for months that the new airline was a private initiative, funded by Zimbabwean investors living abroad. Joram Gumbo, the transport minister, told local newspapers it had been necessary to lie because “if they had been exposed as government of Zimbabwe planes, they would have been taken by the creditors who were claiming for money.” He also revealed that “the man in charge of Zimbabwe Airways” is Mr Mugabe’s son-in-law.

Officials see the new airline as a panacea for the economy. That seems unlikely. It will be pitted against rivals offering reliable connecting services via their hubs in South Africa, Kenya, Ethiopia and the United Arab Emirates. Airlines based in those countries have the upper hand on numerous fronts, among them economies of scale, network synergies and more frequent flights. Zimbabwe Airways will have only one advantage: the ability to fly between Harare, the capital, and destinations in Europe and Asia without boring stopovers. Yet there is probably not nearly enough direct traffic to fill its planes.

Africa’s fintech industry has scored another big-ticket investment win

The streak of big-ticket investment in African fintech companies shows no signs of stopping.

Cellulant, the digital payments solutions company operating in 11 African countries has raised $47.5 million in its Series C round—one of the largest for a solely Africa-focused venture-funded company. The round was led by The Rise Fund, an impact investment fund run by TPG Growth, the US-based private equity group, with participation from Endeavor Catalyst, Satya Capital, Velocity Capital & Progression Africa.

First founded in Nigeria and Kenya in 2004, Cellulant has since expanded to nine other African countries and around 12% of Africa’s mobile consumers can make payments using its solutions. Its reach is down to partnerships with over 90 banks and several mobile payments platforms across the continent. The company says it will be expanding to two more countries following the investment.

The deal marks Rise Fund’s first investment in Africa since raising $2 billion last October. The fund’s backers include Andra AP-fonden, the Swedish pension fund and the Washington State Investment Board. It also lists music star Bono and billionaire Richard Branson on its board.

The investment in Cellulant is the latest endorsement of the key role African fintech companies are playing in bridging the crucial payments and financial inclusion gaps on the continent. Over the past three years, the sector has garnered momentum and has become the most attractive for investors on the continent.

Almost a third of funding raised by African startups in 2017 was in the fintech sector as investors bet on consumers turning to more formal financial services in a region where just 17% of the population have banking accounts. Venture funding for African startups jumped by 51% to $195 million in 2017.

Fintech was the biggest attraction for investors with 45 startups raising one-third of total funding. The success of mobile money technology like M-Pesa in Kenya and across East Africa has long shown the potential for other underserved markets. M-Pesa’s success is likely also behind for the increasing presence of mobile networks in the African financial sector and the convergence of the two sectors.

Read the full story at Quartz Africa