#EnergyAfrica Blog

"light it up"

Reformat your view

A population growth like none ever seen before is under way in Africa. At the same time investment risk is still seen as higher in Africa than other markets. Why is that? In many cases risk perception vs risk reality has a spread. The population growth is creating and endless supply of opportunity for investment growth yet perceived above ground risks in Africa remain high. This infographic video illustrates the magnitude of the change (http://tinyurl.com/y4ktahwy). Organizations such as the African Development Bank are working to drive that perception down closer to the reality. I have a belief that one event in particular has shaped an entire generations perception of Africa. This event happened on July 13, 1985. (http://tinyurl.com/y5l84prn) Live Aid. Beyond all the good it did it burned into the minds of Europe and North American youth an image of Africa. Beyond the short term good that it did now editors at national papers are these people and it affects the reporting accordingly. The cyclone Idai in Mozambique and Zimbabwe created a tragedy that creates click bait to sell news. What about the headway that countries such as Rwanda, Ethiopia, and Uganda are making in their industrialization. Did Africa's first electric train make headlines? No. Is the finch revolution happening on the continent being extolled as a future for those in North America. No we are subjected to the Apple Card as revolutionary while M-Pesa at 10 years old is still upheld as revolutionary cellphone technology.
Risk in Africa is how your are guided to see it. Energy in all its forms is in massive demand across Africa. Fin-tech partnered with utilities would have an impact that would far overshadow "Blockchain" revolutions. With 2 utilities in the black across the continent changes and evolution are required. The DFI's are supporting these innovations. PE/VC has the opportunity to capture these tidbits of genius and reduce the above actual ground risk. Therein lies the opportunity for
#EnergyAfrica investments. From the exploration, production, storage, and consumption of energy the market in Africa is not as it is in North America. Exponentially riskier it is not. Different yes. Above ground attention needs to be paid. African use of energy is evolving. The industrialization and growth of a new middle class is not to be overlooked. #EnergyAfrica will not.

The next billion people on earth

Stop and think about where the next billion people on earth will be. The UN believes that "With the highest rate of population growth, Africa is expected to account for more than half of the world’s population growth between 2015 and 2050." ( https://bit.ly/1HFAhyT ) That is a massive growth curve that energy exploration, development, storage, and usage isn't even thinking about right now. Onshore energy needs in Africa are exponential increasing. Many solutions are being worked out right now to deliver power to the people. The last time I checked though steel production, large scale industrial manufacturing, and baseload need a balance of renewable and traditional energy sources.
For what it is worth, I watched a Bill Gates interviewed on this subject and was surprised to hear him echo these same thoughts. Particularily at about 8:30 minutes into the interview. (
https://bit.ly/2Ydqi5d ). It is interesting to see that realizations are spreading around the place energy sources have in the development and sustainability of economies. Capital is required for all sources and uses of energy. Eyes need to be wide open though about the social vs practical needs that are being serviced by the various sources of energy. Africa grows faster and faster that is not deniable. We cannot deny the needs and hope for a "leapfrog" event. Technology for innovation is a must. Technology for cleaner results is a must. Technology for the sake of technology alone is a waste of time, capital, and aspirations. There are innovations that hydrocarbon energy must access. There are innovations that renewable energy must expand on. The combination of these two items must be kept in sight as Africa grows.

Families of Africa

I just came back from the Cape Town hosted Africa Family Office Summit. The genuine desire for African families continuance in the investment into Africa is very abundant. The understanding that the growth of Africa is regional and still dependant on a growth profile that moves people up the value chain to a consumer role is very much understood. Opportunity abounds. The interaction between the GCC, North American, European, and African families was uniformly expressed as an objective for growth. Thank you to the host family, the Alea Global Group, for a wonderful engagement of ideas, people, and opportunities.

PE fund now live

The nuances of blogging and investing are an artform that I have yet to conquer. This blog is really intended to be more of a dialogue on our encounters with the energy space in Africa. I encourage you to engage with Stonechair on its various public discourses relating to energy. We are speaking in London and Cape Town this week about the importance of energy investors to continue their pursuits. The reality of current markets is that larger and larger funds are pushing larger and larger deals. All of a sudden much that remains is the startup crowd and the ticket size is "too small" for many of the mainstream players. Engage with SCC and we will work with you to find a way to solve issues such as this. We look forward to talking with you soon.