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MARKET BACKGROUND AND CONTEXT

Africa is by all measures a promising and rewarding investment destination that is attracting and ever growing numbers of development and investment partners from all over the world.

 

The prime investment opportunities are many and prioritize respectively as follows: Health Care, Renewable Energy, Agri-Business, Tourism / Hotel/ Hospitality Industry, Real Estate, Manufacturing, Food Processing, Transport, Communication, Infrastructure development, Natural Resources, Technologies and Financial Services. East Africa is a particularly desirable investment destination due to a number of key strengths that include:-


1) Excellent Connectivity – convenient time zones, Nairobi as the transportation hub of Eastern and Central Africa and Mombasa Port is the most biggest deep-water port on Africas entire east coast – all connect Kenya to the world and the world to Kenya
2) Talent Skills – A deep pool of educated and skilled manpower have made East Africa the manufacturing, commercial and financial hub in eastern and central Africa
3) Tourism – as a global wildlife and safari destination, the tourism industry is one of the most successful in the world, and continues to expand
4) Commercial Environment – as fully liberalized economy without exchange or price controls, there are no restrictions on domestic and foreign borrowing by residents and non-residents
5) Trade Promotion – an attractive and comprehensive package of incentives offered to development partners
6) Collaboration – A strong and cooperative relationship exists between the government, the private sector and development partners makes it conducive to attracting investments in countries in East Africa.
7) Memberships – in regional trading blocs of COMESA and the EAC, as well as a beneficiary country under the preferential trade enhancing schemes offered by the AGOA legislation of the USA and the ACP-EU Cooperation and various bilateral cooperation agreements
8) Location – Proximity to the entire African market with plenty of land and a high population
9) Manufacturing – a relatively well developed manufacturing base in the Eastern African region
10) Natural Resources – potential exists for exploration and exploitation of East Africa’s mineral resources such as Oil, Natural Gas and precious metals. At present, exploration is at early stages.
11) Climate – favorable weather conditions as well as attractive and diverse social/cultural environment.
12) Infrastructure – is relatively well developed, is growing fast and attracting significant investment
13) Technology – Kenya is the global leader in mobile payments, making the mobile phone a major platform for financial services, doing business and accessing the Internet.


PROJECT EVALUATION PROCESS

EGI helps partners to generate pre-qualification requirements, and creates bankable projects in preparation to present to Development Partners. Our defined Process has 3 stages of engagement.


Step 1 – Initial Project Review – EGI Analysts and advisors liaise with Project/Company owners to compile the required Data for this initial review stage.

• Overview / Project Description / Objectives
• Key Project/ Company Data
• Management / Development Team
• Project/ Company Status & Roadmap
• Clients / Partnerships / Commitments
• Funding Requirements
• Commercial Risk & Mitigation
• Business Projections
• Investor Returns & Assumptions
• Investor Exit Options & Assumptions


Step 2 – Evaluation Stage – Once stage 1 information is compiled, reviewed and shaped by EGI, a sequential second level review process is undertaken by the investment committee (IC) where the following elements are evaluated and scored.

1. Alignment – Is the project aligned to key investment philosophy/goals

a. Sectoral – The Project has to be aligned to our areas of focus.
b. The Innovative and/or Transformative nature of the business.
c. Long Term Value Investment – Is the model Sustainable.
d. Collaborative potential with existing Development Partners.

2. Opportunity – What is the overall commercial concept of the business – Includes evaluation of:

a. Is the project a “Market Maker” or “Market Taker”
b. What is “New, Different, Better” which promotes a clear competitive advantage

3. Project Risks – Identify Risk, Rating of Risk and How to Mitigate

a. Internal – Founders/Managers, Offtake, Environmental, Legal, Credit/Financing Risk
b. External – Security, Product/Service, Political, Country/Market, Currency

4. Deal Structure – Analysis of proposed structure – does it help the project attain full financial, social and economic benefits..

a. Structure – forms of company / investment vehicle
b. Jurisdiction – Tax & Compliance considerations


Step 3 – Deal Stage – Once through stage 2 above – the immediate next steps in the process are:

1. Follow up – request from project developer further clarifications/information (if any)
2. O.I – issued that outlines the terms on which EGI would like to engage with the project owner AND any applicable Conditions Precedent
3. Due Diligence – undertake commercial and legal due diligence
4. Environmental Impact and Social (EIS) Data Sheet – to define key issues
5. Term Sheet – issued upon successful DD and EIS contain key agreed terms of investment
6. Structuring – creation of new/amended legal structures (as/if required for the investment)
7. Commercial Close – execution of investment agreements
8. Financial Close – disbursement of committed debt or equity facilities to Project(s)


“WE ENGINEER THE ART OF TRANSLATING YOUR IDEAS INTO A TRANSFORMATIVE BUSINESS”