In dealings between the Gulf Cooperation Council (GCC) and Sub-Saharan Africa during the first half of 2014, notable emphasis fell on power projects, communication deals and private equity ventures. Below are the top power plays over the six months, by value of transaction:
SkyPower FAS Energy, a joint venture between Toronto’s SkyPower Global and FAS Energy of Saudi’s Fawaz Alhokair Group, signed agreements with Nigeria’s federal and Delta State Government departments to develop a 3,000 MW solar project worth an estimated $5bn.
The project entails a multi-phase build schedule over the next five years, with SkyPower FAS Energy expected to deliver the first phase of the project and commence commercial operations in 2015, before gradually transitioning to the operation of the utility-scale facilities.
Emirates Telecommunications (Etisalat), the UAE’s most valuable publicly-traded company, agreed to sell its businesses in six West African countries to Maroc Telecom – a move combining the assets of both, ahead of Etisalat’s $5.8bn acquisition of the Moroccan firm from Vivendi SA.
The deal included $650m in assets, spread across units that provide mobile voice and data services in Benin, the Central African Republic, Gabon, Niger and Togo, and the Côte D’Ivoire-based Prestige Telecom, which provides Etisalat’s IT services across the same countries.
Swiss investment bank, Edmond de Rothschild raised $530m alongside Dubai’s Abraaj Group and the US-based Carlyle Group for its first Africa-focused private equity fund, and joined a growing list of foreign investors eyeing Africa’s booming economy and middle class.
According to the Financial Times, the Rothschild fund will be managed by Amethis Finance (itself part-owned by the Nairobi and Abidjan-based Edmond de Rothschild Group), and will target investments into small and medium-sized companies on the continent.
The Dubai-based Abraaj Group also expects to raise an additional $500m-$750m in capital and deploy $200m-$300m in sub-Saharan Africa from its existing funds over the next 12 months.
Abraaj manages $7.5bn in assets and expects to complete four transactions within South Africa, Nigeria and Kenya by the end of 2014, spread across the finance, consumer and logistics sectors.
The Investment Corporation of Dubai (ICD) purchased a 46% stake in Kerzner International Holdings, the operator of the Atlantis hotel in Dubai. Though the sum involved has not been officially confirmed, the value of the deal is estimated to be in the region of $450m.
Sol Kerzner, who founded the company in 1994 but is now stepping down, said: “I am exceptionally proud of all that has been accomplished at Kerzner International. This is a significant milestone after a long career in the tourism industry and I wish the company well.”
Atlas Mara Co-Nvest, a joint venture between Bob Diamond’s New York-based Atlas Merchant Capital and the Dubai-based Mara Group, made an acquisition deal worth $265m in cash and shares for the Sub-Saharan ABC Holdings and ADC African Development Corporation.
Mara Group founder Ashish Thakkar said: “With the combination of BancABC’s regional expertise, ADC’s initial platform and Atlas Mara’s global experience, we can build a truly pan-African financial institution to address needs across the continent for a meaningful and lasting impact.”
South Africa’s third-biggest mobile operator Cell C, which is 60%-owned by Dubai-based Oger Telecom of Saudi Oger group, will spend $221.62m in 2014 to facilitate the expansion of its subscription base through the upgrade of its network and the addition of 300 sites.
The relative newcomer to the market has been steadily stealing share from the bigger players such as leader Vodacom and MTN, and according to a statement its users increased to 16.6 million at the end of April, representing a 22% rise on the user base at the end of 2013.
Ghanaian President John Dramani Mahama has reached an agreement with the Abu Dhabi National Energy Company (TAQA) for the development of a 350 MW power plant in Western Ghana, under government plans to double installed generation capacity to 5,000 MW by 2016.
Ben Dotsei Malor, Ghana’s presidential spokesperson, stated: “One key thing that emerged was an offer from the UAE for a support of $100m from the Abu-Dhabi development fund to be used by the government of Ghana for various projects including infrastructure projects.”
Al Futtaim Group persuaded 91.6% of shareholders in Kenya’s CMC Holdings to accept its $86.3m offer for the group, gaining control over a 33% stake in Kenya Vehicle Manufacturers with its installed manufacturing capacity of 6,600 vehicles, and subsidiaries in both Uganda and Tanzania.
Marwan Shehadeh, group director for corporate development at Al-Futtaim Group, previously noted: “We are continuing our expansion drive across Africa and we hope that CMC will be the jewel in the crown of our inroads into this great continent.”
Naspers, Africa’s largest media company, has invested $75m in Souq.com, a UAE-based online retailer and subsidiary of Al Jabbar Internet Group that is presently the largest e-commerce portal in MENA, with 23 million visits per month and more than 6.2 million registered users.
Souq.com CEO Ronaldo Mouchawar, who founded the company in 2005, noted: “Our traffic share from other markets is growing faster [than in Dubai], and we have more customers in Saudi Arabia than in Dubai. Currently, the site has a 65% repeat customer rate.”