This week Deloitte released a report saying: in 2011 the largest amount of capital deployed in East Africa went through two investment rounds to Citadel Capital’s Rift valley Railways (RVR) performance last year and outlook for this year.
Citadel Capital based in Cairo began implementing a sustainable business and investment plan at Rift Valley Railways (RVR). The private equity fund owns 51 percent shares in RVR which holds a 25-year concession to operate 2,352 kilometres of track linking Mombasa to Kampala. It has a five-year capital expenditure programme to rehabilitate infrastructure and rolling stock that will cost approximately Sh24.4 billion.
In the region approximately Sh8.67 billion was received in the Infrastructure projects in three deals, while health care Sh8 billion ($680 million) in five deals, telecommunication projects received approximately Sh5.02 billion ($59 million) in two deals and financial services Sh1.36 billion ($16 million) in three deals
No deals were reported in the wider east African countries of South Sudan Burundi or Ethiopia are the sub-regional economic hub that Kenya claimed the majority of deals both in number and value, said a consulting firm in statement.
In February Catalyst Principal Partners invested an undisclosed amount of money in Cotex and Chemio Industries in Tanzania while Resolution Health received an investment worth approximately Sh204 million in January 2011 from the African Development Corporation.
Last year Acumen Fund announced plans to double its assets under management in East Africa to Sh2.1 billion in the next two years and in partnership with Root Capital invested Sh176 million into a Ugandan Cotton Ginnery, Gulu Agricultural Development Company. The respondents (80 percent of them) said that they expect private equity funds to increase their investments in the region this year. For It to have a very low private equity penetration level although there is strong confidence in the region’s economic growth.
Most of the private equity funds are planning to put their money into financial services followed by agriculture and agribusinesses and health care and pharmaceuticals.
“35 per cent of those who responded said that they expect the regions’ performance to be better than that of South Africa, “said Deloitte. Adding that not everyone is trying to find the same deals but to focus on new investments.”
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