Investing for Impact in Africa

While in Togo last week, I looked to right out of my taxi window and saw this entire family riding on one motorbike as their primary mode of transportation. This visual scenario was repeated many times during my visit to Lome to sign an MOU for Cordiant to become officially selected to manage a Preparation Fund and a Primary Infrastructure Fund to be invested in the power and telecommunication sectors of the Francophone region of Sub-Saharan Africa.

As I watched this family from my window, I couldn’t help but send my wife this picture with the following note; “ We drive an Audi every day while this whole family of four rides a single motorbike”.

Many families just like this one meet each day with no electricity, no telecommunications, poor housing, a challenging food ecosystem, high levels of unemployment, fresh water shortages and other less than desirable conditions.

The need to make an impact to help improve these conditions is great. The opportunity to make a difference while making a competitive return on an investment in the power and telecom sectors is equally great.

•Africa has 1.3 billion people living in 54 countries, representing 17% of the worlds 7.7 billion person population.

•Africa’s landmass exceeds that of every other continent except Asia.

•600 million people in Africa are without electricity and a large number are without telecommunications.

•Of the 25 poorest countries in the world, 6 of them are in Sub-Saharan Africa.

•Togo, Guinea, Guinea-Bassau, Mali, Niger, Burkina-Faso are all on the list of the worlds 25 poorest countries and represent 75% of the entire 8 country Francophone region.

The power and telecom infrastructure of these countries need investment capital and there are opportunities to generate a competitive investment return on invested capital while making a positive impact on the region's citizenry. Generating acceptable IRRs while having a positive social impact on the lives of people living in the Francophone region are not mutually exclusive.

One of the largest Development Finance Institutions in the Francophone region has decided to invest the first $20 million dollars in the improvement of the power and telecom infrastructure of this 8 county region by signing an MOU for Cordiant to manage a Preparation Fund to be invested in those companies that are in the power and telecommunication sectors but are not quite commercially financeable.

The Preparation Fund will be designed to feed the Primary Fund with investment opportunities after they become commercially financeable.

To get started, the mandate issued by the DFI sponsor of the Preparation Fund will require that Cordiant use its global network of potential investors to raise another $20 million to match the $20 million initial tranches committed by the DFI sponsor for the Preparation Fund.

The mandate will require that Cordiant establish a local office in Senegal to be staffed adequately with financial professionals responsible for creating deal flow and for providing the necessary technical assistance for advancing those companies that qualify for the Preparation Fund but not the Primary Fund, which will also be managed by Cordiant and will be targeted for $400 million.

Cordiant has accepted the challenge of creating meaningful risk-adjusted IRRs while making a measurable impact by structuring and managing the Preparation Fund and the Primary Fund to be invested in the power and telecommunication sectors of the Francophone region.

We hope that you will join us by investing in this unprecedented opportunity to make a living while making a difference in the lives of citizens of Francophone West Africa.

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