Saudi Arabia’s Sidra Capital and its Geneva-based partner INOKS Capital have concluded two Shariah-compliant convertible investment transactions with a value in excess of $37.3m in the agriculture and real estate sectors of Cote d’Ivoire and Ghana on behalf of GCC investors.
In Cote d’Ivoire, the consortium is participating in a government-sponsored social housing scheme to provide affordable housing for the growing middle class in its capital Abidjan.
The beneficiary of Sidra and INOKS’ investment is Saudi-based OPES Holding, one of five developers selected to participate in a public private partnership (PPP) programme aimed at executing the government’s plans to address the country’s acute undersupply of housing.
OPES has secured the go-ahead to construct approximately 7,200 units, and has already exceed its first phase completion target of 1,500 units. The government has laid legislative framework for private sector developers to deliver 60,000 units over the next five years.
“GCC investors are familiar with real estate investment, and when they see a good deal it is difficult for them to decline,” Hani Baothman, CEO of Sidra Capital, told Arab News.
“The business model of our partner OPES is very simple: build units once secure offtakes have been signed and a down payment has been made. This significantly reduces the risk of non-payment by the buyer as the buyer is not an individual.”
In Ghana, the consortium is investing in RMG Concept, an integrated agriculture commodity supply chain player with activities in Cote d’Ivoire, Ghana, Burkina Faso, Liberia and Mali.
Over the last five years, RMG has been the beneficiary of various trade finance strategies from leading international banks and funds, enabling management to significantly grow its operations within the region and build up to a revenue stream that now exceeds $100m.
“From its origin as a supplier of fertilizers to cotton farmers, RMG has developed into a major regional commodity supply chain player. We expect this investment to introduce us to other sub-sectors of the agribusiness sector in search of value,” added Baothman.
He noted how the Gulf countries had acted slowly in Africa, saying: “GCC investors have many preconceived negative ideas about investing in Africa, and while we have seen many Western and Asian investors flocking the region, we have not been true to our trading roots.
“Over the last few years, we have seen substantial FDI amounts flowing into Sub-Sahara with the Western African countries being the largest beneficiaries. Our partner INOKS Capital has been primarily operating in West Africa for the last seven years and this has given us the confidence to work with them in Africa and bring such opportunities to our region.”
The convertible investment strategy developed by INOKS Capital and Sidra Capital dovetails with the Sidra Ancile Structured Trade Investment strategy launched jointly by the pair in 2012, and strengthens Sidra’s position as an alternative investment house in Saudi Arabia.