SeedTree Capital – driving African investment

Now let's get down to business and hear your views on the African market.

Um, one thing that's, that repeatedly gets raised about projects in Africa is bankability.

Um, if a project's not bankable, it doesn't proceed.

Now, that sounds pretty obvious, but there's a lot of devil in that detail.

So let's start off with an opener question on this.

Can you please start by explaining exactly what bankability means when talking about infrastructure and energy projects? And if you can please follow that by outlining what patterns you've consistently seen in projects that successfully attract capital.

All right, so I'll start with where my view comes from because I've sat at several sides of the table.

I've been on the side of the developer who's actually building the project, I've been on the side of the investor who's deciding whether to fund it, and I've also been on the side of the operator managing the project post-investment.

I see a project as bankable when it is structured in a way that allows the capital providers to price it and commit capital-

Mm

... and on terms that everybody at the table can live with.

For this, I'm going to use a cooking analogy.

So in parts of West Africa, there's a saying that a party without Jollof rice is just a meeting.

[laughs] Certainly, yeah.

In infrastructure financing, I would say that a project without bank, without bankability is just a presentation.

Mm.

And so if we follow that analogy, we then have to ask what goes into the pot.

From my view, there are five ingredients: vision, inputs, sequencing, balance, and judgment.

The first is vision.

Vision is what success looks like and recognizing that it means something different to everyone at the table.

For the sponsor, it means a target equity return.

For the debt providers, it means that they want to get paid no matter, you know, what happens.

Mm-hmm.

Um, for the, uh, for the regulator, it means managing cost and service quality, and for the community, it means creating jobs.

That is really something that then has to translate into investor logic, and the investors want to know how the risks get managed while their returns get paid, and everything else follows from that.