UK Gov't Investment Group Buys Into DP World's African Ports Portfolio
DP World has announced the creation of a new investment partnership for African seaports, supported by the UK development finance institution and impact investor CDC Group (CDC).
DP World is contributing its stakes in three existing ports and expects to invest a further $1 billion into the partnership over the next several years. CDC is committing about $320 million initially and expects to invest up to an additional $400 million over the same period. The transaction is subject to regulatory approval.
The investment vehicle will help develop origin and destination ports, inland container depots, economic zones and other logistics assets across Africa. It will hold minority stakes in several existing DP World assets, including the ports of Dakar, Senegal; Sokhna, Egypt; and Berbera, Somalia.
"The partnership will create transformational opportunities for tens of millions of people over the next decade," said Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World. "DP World is committed to Africa for the long-term and sees significant opportunity for future growth across the continent. The partnership with CDC offers the flexibility to accelerate and capitalize on these opportunities."
These investments are expected to create an additional 138,000 jobs regionally. By 2035, the ports are expected to support stable employment for around five million people indirectly.
CDC is the UK's development finance institution and impact investor, and it has more than 70 years of experience in supporting the long-term growth of business in Africa and South Asia. It is owned by the UK government and has a dual objective: to support business growth that lifts people out of poverty, and to make a financial return.
"Africa's full potential is limited by inadequate ports and trade bottlenecks, putting the brakes on economic growth in some of the world's fastest-growing economies and undermining social resilience in the least developed parts of the world," said Nick O'Donohoe, the CEO of CDC. "This platform will help entrepreneurs and businesses accelerate growth with access to reliable trade routes, and it will help African consumers benefit from the improved reliability and reduced cost of vital goods and food staples."