CI VIEW: Akon and Stanley Enow joining forces for Cameroon mega hydropower projects UPDATE

WASHINGTON/BRESCIA (CI Africa)  (Update on May 18, 2017 to add interview with GE Power CEO Steve Bolze and Actis Senior Partner Torbjorn Caesar)  Aliaune “Akon” Thiam and Stanley Enow   the American and West African international hip-hop stars — are now joining forces to promote major hydroelectric power projects in the strategically vital West-Central African nation of Cameroon.

[Akon interviewed by Capitol Intelligence/CI Africa using CI Glass during the US-Africa Leaders Summit in Washington, DC on August 4, 2014.]

Akon is in DC during the Energynet Powering Africa Summit to promote the work of his personally financed Solektra Int group that currently has a USD 1bn credit line for African nations to build-out electricity capacity through solar, mini-grid and now hydroelectric power plants.

Separately, Cameroonian hip hop artist and Motherland Empire co-founder Stanley Enow traveled to Washington, DC to attend the Congressional Black Caucus Foundation Annual Legislative Conference (CBCFALC) and its Phoenix Awards Dinner hosted by than President Barack Obama and First Lady Michele Obama on September 17-19, 2015.

Speaking at the National Press Club on August 7, Akon said that his for-profit venture Akon Lighting Africa is already supplying more than 250,000 residents in rural areas with solar generated electricity and expects to expand Lighting African to the Republic of Congo, Kenya and Cote D’Ivoire.

[GE Power President and CEO Steve Bolze speaks to Capitol Intelligence/CI Africa using CI Glass on Africa at Bipartisan Policy Center in Washington, DC. May 15, 2017.]

Lighting Africa already generates between USD 10m to USD 20m in revenues and that figure is expected to soon rise to circa USD 100m, according to sources familiar with the company.

Akon said he was inspired to bringing much needed energy to the poorest areas in the world due to his childhood experience carrying water as a young child in Senegal.

Akon was also a keynote speaker at the Africa Ascending Summit chaired by General Electric CEO Jeff Immelt and other speakers such as the President of Ghana John Dramani Mahama, than Nigerian Finance Minister Ngozi Okonjo-Iweala and World Bank President Dr. Jim Yong Kim.

Akon’s high-level participation in this historic US-Africa Leaders Summit of African Heads of State also demonstrates the role that African-American entrepreneurs play and will play in the world’s greatest growth market, Africa.

At the GE summit, Ghana President John Dramani Mahama said the country is planning to bring new electricity capacity of 5,000 megawatts by 2016 and is hoping that the West African country will become a net exporter of energy.

Hopefully Akon’s participation at the Summit — which is primarily focused on private sector investment and attended by many Fortune 500 CEOs such as Coca-Cola (NYSE:KO) CEO Muhtar Kent, The Dow Chemical Company CEO Andrew N. Liveris, Wal-Mart Stores President and CEO Doug McMillon — can help combat the bias against having African-Americans sharing the huge economic opportunities stemming from Africa’s early growth markets.

On his part, Stanley Enow says he wants to use his popularity after being awarded by Viacom (NASDAQ: VIA.B) unit MTV‘s Best New Act in Africa to bring desperately needed electricity generation to his native Cameroon.

[African hip hop artist and Motherland Empire co-owner and artist Stanley Enow speaks to Capitol Intelligence/CI Africa using CI Glass at Congressional Black Caucus Annual Legislative Conference. Washington, DC. September 18, 2015]

US agencies such as the Overseas Private Investment Corporation (OPIC) and the International Finance Corporation (IFC) are currently working on two 400 megawatt hydro-power plants to be built in Cameroon, the West-Central African nation under sporadic attacks by ISIS ally Boko Haram and growing separatist unrest by the country’s English speaking minority.

Enow has already meet officials at OPIC and said he would like to use all of his influence to help bring electricity to his native Cameroon and Africa in general.

US Congressman Keith Ellison (D-MN) briefly spoke with Enow at the Congressional Black Caucus regarding how the international artist can help the United States promote its Power Africa initiative to bring new energy resources to the African continent.

Enow was also able to meet and speak with US Congressman Andre Carson (D-IN) who headed up the HipHop And Politics panel at the Congressional Black Caucus convention.

[US House Minority Leader Congressman Steny Hoyer (D-MD) speaks with Motherland Empire co-owner and international artist Stanley Enow filmed by Capitol Intelligence/BBN using CI Glass at Congressional Black Caucus Annual Legislative Conference.]

At the CBCF event, Mr. Enow was also able to meet and speak with CBCF Chair R. Donahue Peebles; CBCF co-chairs Rep. Terri Sewell (D-Al) and Hakeem Jeffries (D-NY); House Minority Whip Steny Hoyer (D-MD) and even Democratic presidential candidate, former Maryland governor Martin O’Malley.  

The Enow brothers also meet with Rep. Henry C. “Hank” Johnson, Jr. (D-GA) who represents the Congressional district where Coca-Cola is headquarted and is active in promoting US direct investment in Africa.

The Cameroonian hydro-project has already gotten the attention of important Republicans, such as Senate Energy Committee Chair Senator Lisa Murkowski (R-Alaska).

Apart from OPIC and IFC, the Norwegian sovereign wealth fund Norfund has started to look at the proposed Cameroonian hydroelectric project, a source close to the fund said.

The source said Norfund, which is global operator in the hydroelectric sector, is now looking at the West African region for future strategic investment.

For nation of Cameroon, the planned 300 to 350 megawatt hydro-electric plant to be built by (General Electric NYSE:GE) combined with another planned 400 megawatt hydro-electric plant by Electricite de France (EDF) not only meets the country’s immediate energy needs of the Central/West African nation but can also add another 2% GDP growth to a country already growing by 5-to-6 percent a year, Cameroon Finance Minister Alamine Ousmane Mey said.

[Cameroon Finance Minister Alamine Ousmane Mey speaks to Capitol Intelligence/CI Africa using CI Glass on General Electric and EDF hydro-electric projects in Cameroon. IMF World bank Spring meetings. April 13, 2016]

In an interview with Capitol Intelligence/CI Africa during the World Bank Springs meeting in Washington, DC, Minister Mey said that Cameroon currently produces some 1,200 megawatts of power and that the country needs to produce 2,000 megawatts to sustain economic growth and lower the over-all cost of power production.

The GE power plant — which is a USD 845m project by the Rabat, Morocco-based Platinum Power subsidiary of New York City-based private equity house Brookstone Partners — is a priceless opportunity for Enow and Akon to join forces to bring stability to Cameroon.

“The project is the absolute way to meet the US government aims in its billion dollar Power Africa and at the same time defeat Boko Haram in Cameroon,” a banker familiar with the project said. “The local population will not give Boko Haram any comfort if they know that a major energy production facility is at risk.”

Rabat, Morocco-based Power Platinum Director of Development and Government affairs Thanae Bennani said that the company has completed all feasibility and environment studies for the hydro-power plant and is waiting for Power Purchase Agreement with Cameroon’s privatized utility, Societe Nationale d’Electricite (SONEL).

IMG_20150917_163732 (1)

A source familiar with the matter confirmed that environmental impact studies for the plant have been completed and the studies showed no reason for OPIC not going ahead with its planned investment.

In fact, Power Platinum and Brookstone Partners seems  losing ground to another 420 MW hydro-electric project led by France’s EDF at Nachtigal Falls, Cameroon and structured  and co-financed by the World Bank’s International Finance Corporation, sources close to the deal said.

The sources said that while EDF has won a power purchase agreement, current and former White House adminstration said they were frustrated by Brookstone Partners and Power Platinum continued failure  to move on the project which has vital US and NATO security implications in the global fight against terrorism and international organized crime.

[Actis Senior Partner Tobjorn Caesar speaks with Capitol Intelligence/CI Africa using Google on Cameeron, OPIC and private sector approach for developing market investing at IFC EMPEA Global Private Equity Conference in Washington, DC. May 17, 2017]

“I guess that the management of SONEL has been distracted to say the least,” one source said.

Another major obstacle for the funding of the US-backed Cameroonian hydro-plant is the fierce turf war between the United States Agency for International Development (USAID) and Overseas Private Investment Corporation (OPIC) over who will manage the US government’s planned USD 7bn investment in the sub-Saharan African power sector as part of White House mandated and US Congress approved Power Africa program.

Private sector companies, leading members of the US Congress and multilaterals such as IFC, African Development Bank all agree that OPIC is much better equipped to handle Power Africa deals than the scandal prone USAID.

“OPIC knows how to structure a deal under best practices while US AID likes to work on a relationship basis and does not understand the need for return on investment on infrastructure projects,” one senior investment  banker who has worked with both OPIC and the USAID.

Under US Power Africa program, US AID is limited to a mere USD 285m in technical grants; OPIC has USD 1.5bn available for financing and insuring energy projects in Africa; and the US Export-Import Bank (EXIM) has up to USD 5bn in support of US exports in development of energy projects across sub-Saharan Africa.

[Mara Group Founder and CEO Ashish Thakkar speaks with Capitol Intelligence/CI Africa using CI Glass at GE’s AfricaAscending conference during the United States-Africa Leaders Summit in Washington, DC in August, 2014.]

Notwithstanding the OPIC-USAID turf war, the timing for the Cameroonian hydro plant could not be better as West African infrastructure projects are now priority investment targets both for GE with its takeover of France’s Alstom Energy and for the Dubai-based Mara Group investment fund headed by Ashish Thakkar.

In fact, the Mara Group is currently in the process of launching a USD 1bn Pan-African infrastructure fund in partnership with GE, GE and Mara sources told Capitol Intelligence Group.

One source said that hydro-power projects are of special interest to both GE and Mara as GE will be able to exploit Alstom’s industry expertise in building hydro-power plants in Europe and Africa.

A number of Italian hydro-electric operators, such as Milan, Italy-based a2a (BIT:A2A) headed by CEO Luca Valerio Camerano,  have already expressed initial interest in joining up with Brookstone/Power Platinum to build the Cameroonian power plant on a BOT (build, operate and transfer) basis, according to sources close to the company. The Italian a2a, which recently opened operations in Stamford, Connecticut,  could easily access project financing and other guarantees from Italy’s export credit bank SACE and the European Investment Bank (EIB).

[a2a CEO Luca Valerio Camerano speaks with Capitol Intelligence/CI MENA using CI Glass at Smart City news conference in Brescia, Italy. March 21, 2016]

Answering a question from Capitol Intelligence/CI Africa, Camerano said the listed Italian multi-utility is looking at expanding in a number of developing markets and can do so either through M&A, turn-key projects or an advisory basis.

a2a, whose main shareholders are the cities of Milan and Brescia, has an EBITDA of EUR 1.02bn on revenues of EUR 4.9bn; 12 hydroelectric plants generating circa 2 gigawatts of installed capacity; 7 combined cycle gas plants generating 5 GW of installed capacity and 7 coal/oil and co-generating power plants with 3 GW of installed capacity.

a2a chairman Giovanni Valotti said the company would not pursue “foreign adventures” and that is foreign expansion plans would have to fit in line with company’s core industrial segments of electricity generation, smart grids, waste-to-energy and water management.

In fact, a2a, formerly known as AEM Milano, had not pursued foreign expansion after an ill-fated acquisition of Montenegro utility Epcg in 2009.

Another potential new entrant in the growing African hydro-electric power sector is Quebec government owned Hydro-Quebec.  Speaking with Capitol Intelligence/CI Africa,  Quebec Premier Phillipe Couillard said the multi-billion dollar hydro-electric power giant will now be actively pursuing hydro-power contracts in the developed and developing markets.

[Quebec Premier Phillipe Couillard speaks with Capitol Intelligence/CI Africa using CI Glass on Hydro-Quebec expansion in West and North Africa following speech to Resources to the Future in Washington, DC. Feb. 19, 2016]

Premier Couillard said that other Quebec-based companies such as Montreal-based and at times scandal plagued SNC Lavalin and Bombardier should actively pursue opportunities in developing growth markets.

However, Premier Couillard said that he will not and cannot force Quebec’s own Sovereign Wealth Fund, Caisse de Depots, to co-invest projects alongside Hydro-Quebec, SNC Lavalin and Bombardier.

Couillard said he was also in Washington to hold meetings with World Bank President Jim Yong Kim to see how Canada’s leadership in hydro-electric power can lower carbon levels around the world.  

The investment bank best positioned to execute arguably the largest private sector hydro-power project in sub-Saharan African is New York City-based Citigroup, INC (NYSE: C) lead by CEO Michael L. Corbat.

Citigroup is the only US bank with fully operational branches in 100 countries and the head of Citigroup European M&A is Milan-based investment banker Luigi De Vecchi.

Citigroup has been working closely with OPIC both in North Africa and Ukraine, exploiting its “boots on the ground” in strategic early growth markets and its strategy to become a leader in lucrative cross-border M&A.  In fact, Citigroup has M&A operations not only in the US and Europe, but also in smaller markets such as Kiev and Casablanca.

Mara Group, through its Atlas Merchant Capital pan-African banking venture headed by former Barclay’s Bank head Bob Diamond, is also ideally positioned to be a co-sponsor on any pan-African project financing deals.

[Citigroup CEO Michael L. Corbat speaks to Capitol Intelligence Group/CI Africa using CI Glass The Economic Club of Washington, DC. October 28, 2015.]

Akon said he has been holding talks with RLJ, the private equity fund set-up by Robert Johnson, who along with his wife Sheila Johnson,  founded and sold Black Entertainment Television to Viacom for USD 2.4bn.  RLJ works under the Carlyle Group co-founded by David Rubenstein and whose fund is a significant investor in Africa along with Stephen Schwarzman‘s Blackstone.

By PK Semler in Washington, DC and Milan. For more information please call +1-202-549-3399 or email: pks@capitolintelgroup.com.

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