Emerging markets private equity firm Actis has raised $278 million for investment in African real estate to ride a housing boom fuelled by a growing middle class.

Actis, one of the largest private equity investors in the world's poorest countries, said on Tuesday the fund, Actis Africa Real Estate 2, will focus on retail and office development in east, west and southern Africa, excluding South Africa.

Although African economies are growing quickly - second only to Asia - there is a lack of sufficient liquidity in Africa's public capital markets, and investors are increasingly turning to private equity to tap into the continent's economic growth.

"Sub-Saharan Africa has a population of 800 million people and is the fastest urbanising region in the world but lack of capital often constrains real estate development," David Morley, head of Real Estate at Actis, said in a statement.

"Governments recognise the crucial role of FDI (foreign direct investment) in this regard."

Infrastructure development is a capital-intensive business that most African governments struggling with large budget deficits cannot afford, making other regions more attractive to investors.

The private equity group has over $300 million invested in the east African region.

Earlier this year, it said it was looking to invest around $300 million annually in Africa, with much of that earmarked for bigger markets such as South Africa.

Paul Fletcher, a senior partner at Actis, said the fund was evidence of Actis's broader investment plan of building domestic infrastructure in the emerging markets.

Source: Reuters

Imports of West African crude oil by Asian refiners and end-users have reached 1.69 million barrels per day (bpd) this month, up 10 percent from September and at a record high for October, data compiled by Reuters showed on Monday.

A Reuters survey of trade and shipping sources shows refiners in China, India, Indonesia and other Asian countries have bought a total of 55 cargoes of West African crude oil for loading this month, up from 50 cargoes in September.

Barring a sharp and unexpected decline in Asian imports from West Africa during November and December, 2012 will exceed the previous annual average record of 1.71 million bpd set in 2010, the data show.

Source: Reuters

Blackstone Group LP, the world’s biggest buyout firm, plans to start investing in energy projects in Africa worth $3 billion amid increasing demand for power on the continent.

Blackstone plans to invest in the 360 to 480-megawatt Ruhudji hydropower plant in southern Tanzania through its Sithe Global Power LLP unit, David Foley, senior managing director of New York-based Blackstone, said yesterday in an interview in Kampala, the Ugandan capital. It will also invest in Rwanda’s 150-megawatt Ruzizi hydro project that will supply power to neighboring Burundi and the Democratic Republic of Congo.

“As the demand for power increases in Africa, Blackstone together with Sithe has a number of projects,” he said. The projects are in the “early stage negotiation and development phase.”

Africa has 15 percent of the world’s population and accounts for only 3 percent of energy consumption, according to a 2011 report by the African Union and other continental organizations that studied power markets demand over the next three decades. Demand for electricity is projected to increase by 5.7 percent annually from 2.4 percent, it said. The percentage of Africa’s population without access to electricity is 59 percent, compared with 21 percent in developing nations in Asia, according to the study.

Blackstone will invest in hydropower and geothermal projects, Foley said. The company declined to comment on project costs.

Ugandan Hydropower

Sithe and Industrial Promotion Services Kenya Ltd., an affiliate of the Aga Khan Fund for Economic Development SA, jointly own Uganda’s $900 million 250-megawatt Bujagali hydropower plant, which reached full capacity in July. Uganda’s government, which contributed $20 million, is a minority shareholder in the project, which is being inaugurated today.

“All projects are different, but Blackstone typically seeks to form public-private partnerships like we did with Bujagali,” Foley said

The construction of Bujagali, which is Blackstone’s biggest energy investment in Africa, began in May 2007, and replaced the nation’s reliance on 100 megawatts of thermal power, while eliminating a power deficit of 170 megawatts, according to Blackstone.

Equity financing by shareholders accounted for $200 million of the funding and the rest came from lenders including the International Finance Corp., the African Development Bank, the European Investment Bank, the German Development Bank and the French Development Bank.

The Ugandan plant, located 80 kilometers (50 miles) east of Kampala and run by Bujagali Energy Ltd., will be transferred to the government for a token $1 after 30 years, Foley said.

Source: Bloomberg

The International Finance Corp. expects to invest at least $4.3 billion in sub-Saharan Africa in 2013 with a focus on energy and transportation, said Jin-Yong Cai, executive vice president and chief executive officer.

That’s an increase from a record $4 billion put into the region this year, he said in an interview in Dakar, Senegal’s capital, yesterday.

The World Bank’s lending unit aims to be “the key facilitators or catalysts for private-sector development which is the fundamental driver for economic growth,” said Jin-Yong, a former Goldman Sachs Group Inc. partner who was appointed to the IFC post in August. “Africa is our priority globally,” he said.

The IFC has invested across the continent this year, from a hotel in Burundi to power projects in Kenya. Growth in the region of 840 million people is forecast at 5.4 percent this year and 5.3 percent in 2013, outpacing global projections, according to the International Monetary Fund.

In Senegal, where electricity shortages caused riots in 2011, key impediments to economic growth include the cost and supply of energy, Jin-Yong said. Senelec, the country’s national power utility, has debts of 150 billion CFA francs ($294 million), according to a company report.

Economic Bottlenecks

“I don’t know any other places where the electricity price is so high, but even with that high price the supply is not sufficient,” he said.

Jin-Yong met with Senegalese government officials to discuss areas where investment can improve growth.

“We are looking at several key sectors, not only private- sector participation, but to fundamentally deal with some of the key bottlenecks in this economy.”

The IFC also plans to invest in agribusiness and transportation, Jin-Yong said. “Unless you have decent infrastructure, you can’t have scale, and if you don’t have scale, you can’t really achieve any competitiveness in the business,” he said.