Behind Harith’s R6.5bn infrastructure power play

In a R6.5bn deal that opens a new chapter in one of Africa’s most ambitious infrastructure projects, Harith General Partners has teamed up with SA investors to buy a fund with stakes in Lanseria International Airport and power generation assets in five countries on the continent.

In the transaction, Harith, one of the biggest names in Africa’s private equity space, has joined forces with Zungu Investments, an outfit led by iOCO, formerly EOH, and the owner of AmaZulu Football Club, Sandile Zungu, as well as Mergence Investment Managers, a Sub-Saharan Africa-focused asset manager. It marks the end of the Pan-African Infrastructure Development Fund (PAIDF) 1’s 18-year transformative investment journey.

Established in 2007, the PAIDF 1 was set up to drive former president Thabo Mbeki’s vision of the private sector playing a key role in the development of infrastructure. The fund closed with $630m, anchored by a $250m commitment from the Government Employees Pension Fund, with the rest coming from private investors such as Absa and the African Development Bank.

“The transaction marks a historic milestone for PAIDF I, which Harith has managed successfully from conception to fundraising, investment period, management, value creation and ultimately exit,” Harith said in a statement.

Under the deal, substantial holdings in Aldwych Holdings, owner of a pan-African power company with power generation assets in five countries including Kelvin Power at home, Lake Turkana Wind Power, Community Investment Ventures Holdings (CIVH), the parent company of digital infrastructure stalwarts Vumatel and Dark Fibre Africa, and Lanseria International Airport, will change hands between the fund and Harith Infraco — in a collaboration between Harith, Zungu and Mergence.

For Harith Infraco, the deal positions it as one of the powerhouses in the African infrastructure investment landscape, with assets that are critical to the continent’s energy, digital and transport sectors. It will hold almost 38% stakes in Lanseria and Aldwych, plus another just over 15% in CIVH.

“Harith InfraCo’s acquisition of the PAIDF assets is also remarkable for its timing, coming as it does during a period of sluggish fundraising and exit activity within the private equity space in which we have played since our founding 18 years ago,” Harith CEO Sipho Makhubela said.

“It, along with our 2022 disposal of the fund’s shareholding in another asset, the continental digital infrastructure giant MainOne, which we sold to the Nasdaq-listed Equinix, cements our standing as investment practitioners with great acumen, who have earned our stripes over the past 18 years, and now have an impeccable, proven track record,” Makhubela said.

The transaction was facilitated by PSG Capital.