Deal Summary
Harith InfraCo, a permanent capital vehicle established in 2024, has acquired the Pan African Infrastructure Development Fund’s (PAIDF I) stakes in a range of energy, transport, and digital assets for R6.5 billion ($360 million). Harith InfraCo now owns and manages the assets previously held by PAIDF I, including stakes in Anergi Holdings Limited (AHL), Community Investment Ventures Holdings (CIVH) and Lanseria International Airport. Harith InfraCo was initially set up through a strategic collaboration involving Harith General Partners (Harith) and its stakeholders, including the Government Employees Pension Fund (GEPF), the Development Bank of Southern Africa (DBSA), Mergence Investment Managers, and Zungu Investment Co. This acquisition marks Harith’s transition from fund manager to direct stakeholder as it has managed the PAIDF I since its inception in 2007. The PAIDF I was established with a 15-year term, extendable by up to two additional one-year periods. After reaching its 15-year term in 2022 and
Deal Rationale
The acquisition of the assets held by the PAIDF I by Harith InfraCo aligns with Harith's strategic vision to solidify its leadership in African infrastructure investment. As PAIDF I reached the end of its 15-year term in 2022, following two permitted one-year extensions, transitioning these assets to Harith InfraCo—a permanent investment vehicle—ensures sustained value creation without the constraints of a fixed-term fund structure. This move is part of Harith's broader strategy to dominate the infrastructure sector in Africa. In 2023, Harith acquired a 46% stake in Mergence Investment Managers, a co-owner of Harith InfraCo, enhancing its capacity to scale transformative projects. Additionally, the establishment of Harith InfraCo in May 2024 facilitated the consolidation of high-performing assets from Main Street and Aldwych (now Anergi Holdings Limited following a 2017 partnership with the African Finance Corporation), expanding its portfolio in energy, telecommunications, and transportation infrastructure.
Furthermore, in 2021, Harith launched a $200 million top-up fund to PAIDF 2 to invest in high-performing infrastructure assets across Africa. This initiative underscores Harith's commitment to capitalising on immediate expansion opportunities within its existing portfolio and pursuing a mature pipeline of high-quality infrastructure projects. Notably, this acquisition also facilitates significant developments, such as enabling Vodacom's anticipated acquisition of Vumatel by allowing Harith InfraCo to assume PAIDF's stake in Community Investment Ventures Holdings (CIVH). This positions Harith InfraCo as a pivotal player in shaping Africa's infrastructure landscape and supporting the next wave of transformative investments across the continent.
- Market Opportunity: This deal positions Harith and its partners to capitalise on significant opportunities underpinned by the African Continental Free Trade Area (AfCFTA), which is projected to boost Africa’s combined GDP by $450 billion by 2035. Lanseria International Airport, South Africa’s only privately owned international airport, is a standout asset. Passenger numbers are forecasted to grow from 4 million in 2022 to 18 million by 2050, supported by investments in terminal expansions and the introduction of new air routes. Similarly, the Beitbridge Border Post, Southern Africa’s busiest land crossing, has seen transformative gains following a $296 million modernisation in 2018. These upgrades doubled its revenue, increased daily truck throughput from 600 to 900, and reduced logistics costs, making it a critical node for trade under AfCFTA. Another key asset, Anergi Holdings Limited, with its diversified portfolio of renewable and thermal power assets, is well-positioned to address Africa’s growing energy demands, directly supporting industrialisation and economic growth across the region. By consolidating these high-performing assets under Harith InfraCo’s management, the company is strategically placed to leverage the infrastructural enhancements and economic integration catalysed by AfCFTA. This positions Harith InfraCo to drive sustainable growth and create long-term value while addressing critical infrastructure gaps across the continent.
- Risk/Return Analysis: The effective winding down of the PAIDF I is a pivotal milestone for private equity in Africa, providing a rare large-scale infrastructure exit that showcases the continent’s growing potential for high-value transactions and investor liquidity. Financially, the deal offers a balanced risk-return profile with steady cash flows from core assets such as Anergi Holdings, Lanseria International Airport, and Beitbridge Border Post. Key risks include currency volatility, as the South African rand, while appreciating 3.9% to R18.03/$ in 2024, is forecasted to weaken to R20.40/$ by Q4 2029. Profitability challenges also persist in Community Investment Ventures Holdings’ (CIVH) assets. Dark Fibre Africa (DFA) grew revenue by 2.3% to R2.72 billion, yet headline earnings fell 39.6% to R345 million. Vumatel increased revenue by 3.2% to R3.54 billion but posted a headline loss of R374 million. Despite these challenges, PAIDF’s inflation-resistant regulated assets and Harith’s proven expertise in infrastructure management position the portfolio for long-term value creation, bolstering confidence in Africa’s private equity landscape.
About the Fund Managers
Harith General Partners, established in 2006 and headquartered in Johannesburg, South Africa, is a premier private equity firm specialising in infrastructure investments across Africa. With over $1.2 billion in assets under management, Harith focuses on critical sectors such as energy, transport, and telecommunications. The firm has a robust track record, including establishing and managing the Pan African Infrastructure Development Fund (PAIDF) and PAIDF II, which have collectively financed transformative projects across the continent.
Operating in Lesotho since 2015, Mergence Investment Managers Lesotho (Mergence) is a subsidiary of the Mergence Investment Managers, an asset manager that invests in public and private markets in Southern Africa. Mergence is a licensed financial services provider registered and regulated by the Central Bank of Lesotho. The fund began by investing primarily in unlisted assets before extending its product range to offer access to Mergence Investment Managers South African unit trusts under the collective investment schemes, granting additional vehicles to individual investors to save for their future. The wider group has over R35 billion in assets under management and sold a 46% ownership stake to Harith General Partners, a Pan-African infrastructure investor, in 2023.
Zungu Investments Ltd., founded in 2000 by Sandile Zungu, is a South African investment holding company with a diversified portfolio spanning mining, manufacturing, and infrastructure. The firm promotes Black Economic Empowerment (BEE) initiatives and invests in high-growth sectors to drive socio-economic development. Zungu Investments is known for its disciplined, long-term investment approach and commitment to positively impacting ordinary South Africans' lives through its corporate social responsibility initiatives.
