A NEW development-finance venture that will control banking and other assets worth more than $660m across sub-Saharan Africa plans to hire as many as 20 people, including analysts, to manage its investments and help it spend another $300m on acquisitions.
The Norwegian Investment Fund for Developing Countries, the state-owned financier known as Norfund, is pooling its investments on the continent with Dutch lender Rabobank Groep and Dutch development bank FMO to create Arise, which will be based in SA.
Arise will start operating in January with investments in 20 African countries and enough funding to be able to reach almost $1bn of assets within five years, said Deepak Malik, the Southern African head of Norfund.
"We’re going to go through an extreme recruitment phase, looking for senior investment staff and analysts and more," he said in an interview in Johannesburg, where the company has five employees. "We’ve also got to get regulatory approval in all the African countries we operate in. That could take us six to eight months."
The venture will hire 20-25 people over the next six months and is also contemplating moving its sub-Saharan African headquarters to Cape Town, Malik said.
Although European banking regulations have made it more expensive to hold foreign investments, Rabobank decided not to exit its African assets and instead set up the partnership with Norfund and FMO. Netherlands-based Rabobank, which specialises in agricultural lending, is ensuring its shareholdings are below regulatory thresholds that will require it to set aside capital for the investments.
The formation of Arise comes after growth in sub-Saharan Africa eased to 3.5% in 2015, the slowest pace in 15 years, with the IMF predicting an expansion of 3% for 2016.
Arise’s ambition "is to build strong and stable financial-service providers that will serve retail, (small and medium-sized enterprises), the rural sector and clients who have not previously had access to financial services," the three partners said in a statement on August 4.
Norfund’s investments span a solar park in Rwanda, biogas generation in SA, a 12.5% holding in Kenya’s Lake Turkana wind project, which will be the largest on the continent, and 12% of Equity Group Holdings, Kenya’s biggest bank by market value.