24 February 2016       Download

Qalaa leadership presents success stories and takes part in key panels on investing and partnering with African countries at COMESA’s Africa 2016 Investment Forum held under the patronage of Egyptian President Abdelfattah El-Sisi in Sharm El-Sheik, Egypt

Qalaa Holdings (CCAP.CA on the Egyptian Exchange), a leading African investor in energy and infrastructure has just concluded its participation in the Africa 2016 Investment Forum in Sharm El-Sheik, a two-day event that brought together heads of state, members of cabinet and top business leaders from Egypt and the continent to discuss ways of enhancing trade and investment amongst African nations with a focus on the rising role of the private sector.
“There is no denying that Africa faces headwinds but this is a pause point, not a change in long-term fundamentals,” said Ahmed Heikal, Chairman and Founder of Qalaa Holdings, in his keynote presentation at the opening of the Forum. Heikal presented a powerful case study on African opportunities drawing on his years of hands-on experience as an African investor having built 27 companies from scratch in the past decade. Tracing back to its roots as a leading African private equity investor, Qalaa has been directly investing in Africa since 2006 with a number of its investments originating in African economies other than Egypt such as Rift Valley Railways (RVR), the national railway of Kenya and Uganda.
During the event, RVR signed two MOUs, one with the Egyptian Export Council for Chemicals & Fertilizers and one with Expo One, a company that offers trade promotion services to Egyptian exporters. Both MOU’s will help RVR become the official inland transportation carrier for Egyptian exporters and expand levels of intra-regional trade. The RVR signing ceremonies were attended by Egyptian Minister of Trade and Industry, Tarek Kabil, Egyptian Minister of Investment, Ashraf Salman and the Kenyan Ambassador to Egypt, Joff Otieno.
“RVR is perfectly positioned to play a significant role in growing the volume of trade between Egypt and the countries of East Africa by offering exporters a unique door-to-door transportation and customs-clearance service that leverages the competitive advantages of rail as the most efficient, cost-effective, and environmentally friendly mode of transporting goods to and from East Africa, said Qalaa’s Managing Director for Transportation and Logistics, Karim Sadek who also took part in a panel on expanding trade between Egypt and Africa.
Additionally, Qalaa’s solid waste management subsidiary, ECARU, signed an MOU with Ethiopia’s East Africa Mining and announced the signing of a five-year contract with Ethiopia’s Messebo Cement that will see the company transfer knowledge and provide technical expertise and services in the area of biomass management and alternative solid fuels as a source of thermal energy for heavy energy consumers. The two agreements are a significant example of knowledge transfer and cooperation between Egypt and Ethiopia. They will also help expand Qalaa’s business presence in Ethiopia. The company already holds a promising gold mining concession in Western Ethiopia through its subsidiary APM (ASCOM Precious Metals).
“Attracting the type of investments that we require today in Africa and moving away from the aid model that currently prevails is only going to be possible if Africans start investing in Africa,” said Qalaa Holdings Co-Founder and Managing Director Hisham El-Khazindar who participated in key panels on industrialization and new partnership models for African growth. “We need to show that we are serious about the continent’s potential by committing from our own balance sheets which is what we have done with all our investments at Qalaa Holdings.”
El-Khazindar also stressed on the importance of bridging the knowledge gap in order for African economies to achieve their full potential. “We must provide more opportunities for youth to lead the way with new ideas and initiatives. Education will be key; from providing youth with the opportunity to pursue international-standard higher level education to ensuring access to public education and vocational training,” he added.
“My view on Africa has always been positive. You have resources that are available, better governance that is – by and large –taking hold, and the world’s largest working-age population at about same the time as China’s population begins to decline. All these factors mean that Africa is going to continue to do well,” said Heikal. “Only one growth driver is currently missing, or rather on hold – the commodities boom. Low commodity prices across the board will continue to be a challenge. This has already led to a much reduced debt capacity in most African nations which is causing pressures on currencies throughout the continent,” he adds.
Heikal points out that despite the challenges there has never been a better or more important time to invest in African infrastructure. “The challenge is to keep dreaming of the infrastructure that will deliver sustainable growth when the up-cycle returns.”
Qalaa Holdings has developed a successful financing model over the years that has allowed it to tap into funding from development finance institutions (DFI’s), Export Credit Agencies (ECA’s), and sovereign wealth funds. Qalaa has used this formula to build and rehabilitate infrastructure assets including the Egyptian Refining Company, a US$ 3.7 bn refinery in Egypt which is due to start production in 2017. Today ERC stands as one of Africa’s largest-ever project finance deals and the largest private sector infrastructure mega-project in Egypt.