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18 Oct 2024

UAE Fuels Africa’s Growth with Key Private Equity Investments

UAE Fuels Africa’s Growth with Key Private Equity Investments

Last month, emerging markets investment, finance and advisory firm Averi Finance was recognized by the U.S. and UAE governments as a leading private investor in Africa’s energy sector. The endorsement underscores the importance of private equity in driving development on the continent, where Averi Finance has acquired 3.85 GW of solar and wind energy projects in South Africa and is currently investing in more than 1,500 km of high voltage transmission lines across the SADC region. The Invest in African Energy Forum, scheduled for May 2025 in Paris, will explore how African countries can adopt new strategies to increase private equity investment across energy and non-energy sectors, while also fostering closer connections between UAE investors and African projects.

Emirati Firms Expand Investments in Africa

In addition to Averi Finance, several Emirati firms are expanding their portfolios in Africa across both extractive and diverse industries. In the mining sector, the UAE’s International Holding Company is allocating approximately one billion dollars toward mining acquisitions in Africa this year, including two joint venture agreements for iron ore mining in Angola, nickel mining in Burundi and various metals in Tanzania and Kenya. In March, sovereign investor Mubadala Investment Company launched a venture capital fund – Partech Africa II – aimed at supporting African technology startups and companies across various sectors and growth stages, with a cap of €280 million. Meanwhile, Abu Dhabi-based investment and holding company ADQ is investing $35 billion to develop the Mediterranean city of Ras El-Hekma in Egypt, which is expected to catalyze over $150 billion in further investments and new project rollouts.

Strategies for Attracting Private Equity

The UAE's ability to catalyze private equity investments both at home and abroad stems from several strategic advantages and policies. First, the UAE's approach to public-private partnerships (PPPs) has been instrumental in mobilizing private capital. By involving private entities in the planning, development and management of energy projects, the UAE has been able to share risks and attract private capital for large-scale infrastructure projects. By improving PPP frameworks, clearly defining the role of private investors and providing guarantees, African countries can attract further investment in energy and non-energy projects alike, as well as give rise to indigenous private equity firms.

Second, the UAE has developed a robust financial ecosystem that supports large-scale investments, with Dubai representing a global financial hub of international banks, private equity firms and sovereign wealth funds. The Emirates' strategic geographic location, connecting Asia, Africa and Europe, further enhances its appeal for global capital. Establishing financial hubs in key African cities like Lagos, Nairobi and Johannesburg could replicate the UAE's success in building a well-developed financial market, thereby making it easier to structure deals, creating platforms for private equity firms to engage with local markets and diversifying long-term financing options.

IAE 2025 is an exclusive forum designed to facilitate investment between African energy markets and global investors. Taking place May 13-14, 2025 in Paris, the event offers delegates two days of intensive engagement with industry experts, project developers, investors and policymakers. For more information, please visit www.invest-africa-energy.com. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.

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