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

25 Jun

How Senegal became a soccer fan favorite at World Cup 2018

As the World Cup moves into its final group stage matches, one of the teams that has quickly become one of the neutrals’ favourites is Senegal.

Prior to the tournament, the team received very little by way of attention. For teams from Africa, Nigeria stole the headlines with their popular jersey and Iceland with its tiny population and its unlikely story and its fans’ ‘thunderclap’ chant had won the underdog plaudits.

But Senegal’s relatively low profile has proved a bit of a competitive advantage as they became the first African side to win a group match after Tunisia, Egypt and Morocco flopped.

While Nigeria initially under performed and made a comeback. Senegal’s Teranga Lions seem to have the better chance of going further in the tournament.

But Senegal’s quiet campaign belies the talent in the squad. Among a host of skillful players is star man Sadio Mané—who became the most expensive African player in 2016 and partnered Mo Salah last season to give Liverpool a throwback to its glory days with a run to Europe’s biggest club match, the Champions League final in May.

Senegal does have pedigree. Their proudest soccer achievement was at the 2002 World Cup co-hosted by Japan and South Korea. Avoiding defeat on Sunday against Japan in Ekaterinburg will extend their group stage unbeaten run at the World Cup to five games.

But they have been making history since their appearance at the tournament in 2002. In that campaign, they saw off then defending champions and former coloniser, France in one of sports most defining underdog triumph moments.

A remnant of that dream team that reached the last eight in 2oo2 is present in the current squad in the form of the meme-friendly hipster coach, Aliou Cissé, who was once the captain of the team.

Once again, Cissé, 42, is making waves on the big stage as the only black coach on the touchlines in Russia. Even the most populous black country, Nigeria, is being managed by a white 64-year old German.

To read the full article, click here.

06 Nov

Senegal – another big rebasing to GDP

We think Senegal is one of the good news stories in sub-Saharan Africa, which will be reinforced as GDP is revised up by perhaps 30% in 2018.

Senegal was one of only two sub-Saharan African countries to be upgraded in 2017

Senegal is the only sub-Saharan African country we follow to get upgraded in 2017, from B1 to Ba3 by Moody’s in April. This put it one notch above the B+ S&P rating which is unchanged since 2000. In the rest of sub-Saharan Africa over 2017, only Burkina Faso received an upgrade from B- to B; it is also in the West Africa Economic and Monetary Union (WAEMU).

There are IMF programmes with virtually every one of the WAEMU member states, which may be helping this positive trend. We have assumed no further change in Senegal’s ratings, but after this week’s visit to Dakar, we see upside risk to ratings in 2018-2019.

GDP to be revised up, perhaps by 30%, improving most ratios significantly

The most likely trigger is the GDP rebasing that should arrive in 2018, which could lift GDP by around 30%. While not as dramatic as this decade’s 60% GDP hike in Ghana or the nearly 100% rise in Nigeria, it will make a significant difference to Senegal’s ratios.

We expect the public debt ratio to drop from 61% of GDP in 2017 to perhaps 46% of GDP in 2018. Gross external debt may fall from around 55-62% of GDP in 2016-2017 to 39% of GDP in 2018-2019, even assuming new eurobond issuance. The current account (C/A) deficit may shrink from the IMF forecast of 5-6% of GDP in 2018-2019 to 4% of GDP and the budget deficit from 3% of GDP to 2%. The only negatives we see are indicators such as exports to GDP (which will fall) or government fiscal revenues to GDP; the latter may fall from a relatively good figure of 20% of GDP now to around 16% of GDP (still better than many in sub-Saharan Africa).

This comes against a strong backdrop of government-led infrastructure spending growth

Senegal already looks pretty good to us (and Moody’s evidently) due to strong 6-7% GDP growth in 2015-2017, a one-third reduction in the budget deficit ratio from 5-6% of GDP in 2011-2015 to 3-4% of GDP in 2017, and a halving of the C/A deficit from 10-11% of GDP in 2012-2013 to 5% of GDP in 2017. We think the WAEMU currency is working for Senegal, with that currency within 1% of its long-term average value (XOF562/US$) based on our real effective exchange rate (REER) model that extends back to 1995. It has been around fair value 70% of the time since 1995, so stability is normal, and we assume will be maintained.

Read more: Senegal – another big rebasing to GDP

08 Aug

Senegal start-up trains young coders

Senegal starts training young coders
Senegal’s tech scene has been slow to get off the ground due to a lack of qualified coders. But a locally-run company is trying to change that, while also helping young people find jobs.
Local tech start-ups are tackling day-to-day conveniences in the capital, Dakar. Firefly, a digital advertising company, places TV screens in public buses, but has struggled to find qualified web and mobile app developers in Senegal.

“They are trained in technologies we do not work with,” explains Mafal Lo, the co-founder of Firefly. “For example, all engineering schools in Dakar work in Java. We work mostly with PHP and Python, with new front-end technologies like Bootstrap. These are not things they learn in school.”

Until recently, that is.

At Volkeno, students learn web development, digital marketing or graphic design. At the end of the one-month training programme, they will spend two months interning with a local company.

The classes are free. Volkeno is supported by companies like Firefly in exchange for hiring interns. At least 15 of those interns have landed full-time contracts.

CEO Abdoul Khadre Diallo initially set up Volkeno to provide tech services to local entrepreneurs. The training programme was launched later when he realised none of his interns were sufficiently qualified.

“Here, young people are not encouraged to be interested in these skills. Most schools remain too classical. The training is too classical. You see schools where in five years, there is no decent practical training, in my opinion,” says IT professor Babacar Fall who taught the workshop in St. Louis.

There are efforts to change that. At a coding workshop in the northern city of St. Louis, high school students are introduced to coding and web development.

The Next Einstein Forum’s Africa Science Week is held in 13 African countries to promote interest in STEM fields, science, technology, engineering and mathematics.

“For me, the problem lies in the content of university courses,” Fall says. “Because you can start by teaching HTML, but then you evolve and teach HTML5. For me, we must simply update everything.”

Volkeno has registered more than 40 functioning start-ups in Dakar, all of which operate through websites and mobile applications.

“If you are trained in technology, you can find work after you graduate,” explains Fatim Sarah Kaita, a digital marketing trainee at Volkeno. “Because it is very difficult to find internships and everything here, and your relations play a big role. But for example, if you learn programming you can set up your own project, create an application. If you know digital marketing, you can do all the promotion yourself, so it is important to get training.”

The founder of Senegal’s next big start-up may be sitting right here in this room. – VOA

Source from HowWeMadeItInAfrica