Blackstone Group LP (BX) and Carlyle Group LP (CG), the world’s two biggest private-equity firms, sought a partner in Africa to invest in the continent’s burdened energy infrastructure.
They both found him in Aliko Dangote, Africa’s wealthiest man. “Africa needs that kind of funding,” Dangote said in an Aug. 2 telephone interview from Lagos, Nigeria.
“We will do whatever it takes to make people realize that it is happening.”
Dangote, whose cement and commodities businesses built him a $24.4 billion fortune, said he struck separate agreements with the private-equity firms, attracting new capital to help address Africa’s energy demands.
He committed to invest a combined $5 billion by 2019 with New York-based Blackstone in power projects in sub-Saharan Africa, and he formed a joint venture with Washington-based Carlyle to invest an unspecified amount in Nigerian oil and gas ventures and other sub-Saharan projects.
African nations have a funding shortfall of $50 billion a year that’s needed to ease energy shortages and transportation bottlenecks, according to the World Bank.
As a result, sub-Saharan Africa experiences regular blackouts or faces energy prices that are too high, with 600 million people, or 70 percent of the population, lacking electricity, according to the International Energy Agency.
Since the mid-1990s, financing for African power projects has averaged about $1.2 billion a year, split between public and private money, the World Bank says. _Bloomberg