A group of investors led by South African private equity firm Harith General Partners has agreed to buy out an infrastructure fund with stakes in assets including Lanseria International Airport and Kelvin Power Station for R6.5-billion.
The deal provides an exit opportunity for investors in the first Pan African Infrastructure Development Fund, which includes the continent’s largest pension fund — South Africa’s Government Employees Pension Fund — along with Absa, Old Mutual and others. Harith will team up with Mergence Investment Managers and Zungu Investments.
“This transaction comes during a period of sluggish fundraising and exit activity within the private equity space,” Harith CEO Sipho Makhubela said in an interview.
Africa’s infrastructure needs are massive, with cash-strapped governments on the continent constrained in their capacity to finance projects. The African Development Bank estimates the continent needs as much as US$170-billion/year to improve access to electricity, build and upgrade roads, and expand telecommunications services.
The fund being acquired by Harith and its partners was opened in 2007. It owns large stakes in essential infrastructure on the continent including a 37.5% stake in Lanseria — South Africa’s only private airport; a 37.92% holding in energy firm Anergi that owns the Kelvin power plant in Johannesburg; and 15.3% of Remgro’s CIVH, which holds fibre assets, including Vumatel and Dark Fibre Africa.
Energy transition
PSG Capital acted as financial adviser to the transaction, which brings to 10 the number of African countries in which the Harith-led consortium holds stakes in infrastructure projects.
The deal “will, among other things, make us a significant player in Africa’s just energy transition efforts”, Makhubela said. — (c) 2024 Bloomberg LP
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