Two Companies to Invest $5 Billion in African Energy Projects

Source: 8/5/2014, Location: Africa

Blackstone and Dangote Industries announced a commitment by Black Rhino, a portfolio company of Blackstone Energy Partners and affiliated funds managed by Blackstone, and Dangote Industries to jointly invest up to $5 billion over the next five years in energy infrastructure projects across Sub-Saharan Africa with a particular emphasis on power, transmission and pipeline projects.

Dangote Industries is the largest industrial conglomerate in West Africa, and one of the largest in Africa. Dangote Industries’ commitment to investments in Nigeria and across the African continent has played a significant role in Africa’s recent economic success. Led by its Founder, President and Chief Executive Officer Aliko Dangote, Dangote Industries’ businesses span manufacturing, logistics, commodities trading and real estate across fourteen African countries.

Black Rhino was formed in January 2012 and is led by Seacom founder Brian Herlihy to develop and invest in transformational projects in the power generation and fuel transportation sectors. In July, Blackstone announced that it is backing Black Rhino’s experienced management team as it identifies, develops, and operates large-scale infrastructure investments across Sub-Saharan Africa. As part of the transaction, Black Rhino recently announced the appointment of Mimi Alemayehou, formerly the Executive Vice President of the United States’ Overseas Private Investment Corporation, who will join as Managing Director and member of the Executive Committee. In addition, Alemayehou will serve as an Executive Advisor and Chair of Blackstone Africa Infrastructure.

The 50/50 partnership was announced by Aliko Dangote during his remarks today at the U.S.-Africa Leaders Summit, hosted by the Obama Administration in Washington, D.C. The summit is the largest event that any U.S. President has held with African Heads of State. Stephen A. Schwarzman, Blackstone’s Chairman, CEO, and Co-Founder at the U.S.-Africa Business Forum also attended and spoke at the summit.

In their remarks, both Mr. Dangote and Mr. Schwarzman spoke to the critical need to develop Africa’s energy infrastructure. Africa has both the lowest urban and rural electrification rates of any continent, and Sub-Saharan Africa is home to 589 million people who do not have access to electricity, approximately 70% of the total population.

“For too long, inadequate energy infrastructure in Africa has been a major obstacle to the continent as it seeks to fulfill its economic potential,” said Aliko Dangote, Founder, President and CEO of Dangote Industries. “I am pleased to partner with Blackstone and the Black Rhino team, who have considerable experience successfully developing large-scale infrastructure projects, to address this issue in a socially conscious way. This partnership no doubt holds out great potential of transformational and inclusive growth critical for fast-paced development that can lift millions out of poverty in Africa.”

“Aliko Dangote is a highly successful entrepreneur and truly innovative leader who has contributed enormously to economic development across the African continent,” said Stephen A. Schwarzman, Chairman, CEO and Co-Founder of Blackstone. “We can think of no better partner as we invest the firm’s capital in African energy infrastructure development. We have confidence that the critical infrastructure projects that the Dangote team and Black Rhino will jointly pursue will play a meaningful role in the development of economies across Africa.”

“We couldn’t be more pleased to be partnering with Aliko and Dangote Industries on this important venture to develop energy infrastructure across the African continent,” said Sean Klimczak, a Senior Managing Director at Blackstone who oversees the firm’s private equity investments in power generation and transmission. “We look forward to bringing our collective resources and experience together to develop energy solutions for Sub-Saharan Africa.”

In addition to driving the development of African economies and delivering value to investors, Dangote Industries and Black Rhino will pursue projects that exemplify both partners’ commitment to sustainable development and social responsibility, including the involvement of local communities and full adherence to environmental and safety standards. Dangote Industries and Black Rhino believe they bring complementary attributes to the partnership that will uniquely position them to successfully develop challenging and transformational projects in a timely manner.

About The Dangote Group

The Dangote Group is one of the most diversified business conglomerates in West Africa with a hard-earned reputation for excellent business practices and products' quality with its operational headquarters in the bustling metropolis of Lagos, Nigeria in West Africa. Since inception, the Group has experienced phenomenal growth on account of quality of its goods and services, its focus on cost leadership and efficiency of its human capital. Today, Dangote Group is a multi-billion Naira company poised to reach new heights, in every endeavour competing with itself to better the past. The Group's core business focus is to provide local, value added products and services that meet the “basic needs” of the populace. Through the construction and operation of large scale manufacturing facilities in Nigeria and across Africa, the Group is focused on building local manufacturing capacity to generate employment and provide goods for the people.

About Blackstone

Blackstone Energy Partners is Blackstone's energy-focused private equity business, with a successful record built on Blackstone's industry expertise and partnerships with exceptional management teams. Blackstone has invested approximately $7 billion of equity globally across a broad range of sectors within the energy industry.

Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with almost $300 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services.

About Black Rhino

Black Rhino was founded to address the critical need for infrastructure and energy development across the African continent. Black Rhino seeks to capitalize on the major opportunity to invest in projects in the energy security sector, including power generation, transmission, fuel storage and pipelines. Black Rhino has developed a comprehensive understanding of the African continent, including the necessity to establish strong partnerships with leading African entities that complement its expertise.

Black Rhino’s management team has collectively been involved in the development of over US$35 billion of infrastructure, communication and power generation projects across the globe and has over one hundred thirty-five years of combined African experience. The team has been responsible for numerous projects from the concept stage through the full financing, construction, operation and ultimately the exit stage and prides itself on setting standards for developing transformational projects that aim for the greatest level of local population participation and adherence to strict environmental and safety standards.

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