Eos Capital / Enterprise Africa

EOS CAPITAL

2 / www.enterprise-africa.net

EOS CAPITAL

Maximising Returns

While Driving Namibia’s Growth PRODUCTION: Timothy Reeder

A Namibian private equity fund manager, Eos Capital’s mission is to provide attractive investor returns and sustainable impact in Namibia and the surrounding region. The firm has three important funds, all at different stages of development: Allegrow, NIDIF and Euphrates. With Allegrow having reached its exit strategy stage attention now turns to the second and third: the Namibia Infrastructure Investment and Development Fund (NIDIF), and the newer Euphrates Agri Fund, both driving lucrative investor returns as much as they are the overall growth and strength of the Namibian economy. www.enterprise-africa.net / 3

INDUSTRY FOCUS: FINANCE

//

In Greek mythology, Eos refers to a new dawn, which the company explains is aligned to its purpose. “We aim to bring new life to portfolio investments through capital and management support which allows them to grow to their full potential,” Nicole Maske, Eos Capital Managing Partner, states.

“We are a private equity firm,” explains Maske of Eos’s core operations, “which means that we essentially take investors’ money, invest it into private markets and projects and deliver attractive returns. That is the essence of our business.

“We strive to be the leading Namibian private equity player that manages funds across the region, is the first choice for investors, is the preferred financier for companies, and is a magnet for exceptional people.”

Its mission is to achieve these aims while contributing to the growth of the Namibian and regional economy, the second of the overarching aims set

4 / www.enterprise-africa.net

out at the formation of the company, according to Maske.

“We said to ourselves, how can we make a difference in the country through the skills we have?

The obvious way, perhaps, when people want to effect change and drive progress is by going to work for government, but we felt that we could do it alternatively, contributing by growing the private sector and the country through its infrastructure and agriculture development.”

The new Allegrow fund is Eos’s first, primarily a growth and operational development fund with a Namibiaonly mandate. “It is a general private equity fund,” Maske says, “which is fully deployed, putting us in value creation and exit mode. We have nine investments here and had around US$30 million to invest.” With this fund now making investments and unlocking the full potential of Namibian companies, attention now turns to Eos’s second and third.

INFRASTRUCTURE IN FOCUS The Namibia Infrastructure Development and Investment Fund (NIDIF) is another Namibia-only fund, geared specifically toward investing into and developing infrastructure assets.

“We look to invest in new or existing infrastructure projects across the country,” Maske says, to form a portfolio that provides robust, low volatility income yield over the long term.

Eos penned its second deal this year from NIDIF – its maiden infrastructure-focused investment vehicle – through an agreement to buy solar energy and commercial refrigeration company Energy Partners (now Energy Utilities) which builds, operates and maintains solar and refrigeration assets in Namibia. Part of a larger group that also has operations in other regions of Africa, notably in South Africa. The company was founded as Bokstone Solar in 2014 to create a portfolio of assets in rooftop solar photovoltaic installations.

EOS CAPITAL

Last year, Energy Partners South Africa acquired a stake in Bokstone and consolidated its assets into Energy Partners Namibia. “We were originally attracted by the company’s stable and consistent cash flows,” Maske explains.

// IT IS PROVEN THAT GROWTH IN THE AGRICULTURAL SECTOR HAS A MARKED KNOCKON EFFECT ON JOB CREATION AND A REDUCTION IN INCOME INEQUALITY //

“The NIDIF fund is targeting investment in infrastructure projects in Namibia through a mix of equity and mezzanine funding, and energy is a keen focus sector for us along with water, communication and technology, transport and logistics, healthcare and education.”

KELP BLUE The Kelp Blue investment follows Eos’s acquiring minority stake in Erongo Medical Group, a Namibian private healthcare group which owns the Welwitschia Hospital and has interests in radiology and telemedicine as well as Erongo Radiology, a leading provider.

Eos Capital will also manage the partnership between Climate Investor Two (CI2), managed by Climate Fund Managers (CFM), Kelp Blue and NIDIF to facilitate the commercial development

of the world’s first large-scale kelp farm.

Over a five-year period, investment of approximately US$60 million will be required, funded by both international and local Namibian sources through CI2 and NIDIF. “Kelp Blue’s business model will add value across the entire kelp value-chain,” reasons Maske. “The introduction of offshore engineering innovations and novel processing technologies will reduce overheads and increase scalable process efficiencies.

“Economic development will be promoted through the creation of value-added products in Namibia for local consumption and export,” she carries on, factors which align it succinctly with Eos Capital’s, and specifically the NIDIF’s, shared mission of furthering the development of the Namibian economy. This also allows the

Monasa Advisory & Associates provides ESG and transactional advisory services that helps firms develop and monitor their ESG programs to mitigate risk and drive sustainable growth. Contact us to schedule an appointment.

Tel: + 264 (61) 401 472 | mekondjo@monasa.org | www.monasa.net

www.enterprise-africa.net / 5

INDUSTRY FOCUS: FINANCE

job creation aspect so at the heart of Eos’s philosophy to be comprehensively fulfilled, Kelp Blue explains.

“During our starting phase we will be generating 15-20 direct jobs in biotechnology, engineering, factory support services and logistics. An additional 80-100 indirect jobs will be created, with half of these posts potentially being permanent.

“After our successful launch, a further 400 direct jobs and 2,000 indirect jobs could potentially be generated by this project.”

Kelp Blue will cultivate giant kelp in nutrient-rich waters 3-10km off the coast of Namibia, near Lüderitz, helping remove CO2 while boosting marine biodiversity and improving fish stocks. The seaweed canopy will then be properly harvested to produce alternative agri-food, bio-stimulant and textile products.

“In addition to the positive impact on our ocean and our local fish stocks, this is an exciting opportunity to add to the infrastructure and growth of Lüderitz, thereby enhancing prospects

6 / www.enterprise-africa.net

for the local community, and to secure inward investment into Namibia on an environmentally responsible basis,” Maske summates.

ADDRESSING AGRI CHALLENGES The third of Eos’s funds to date is the Euphrates Agriculture Fund, which aims to facilitate the industrialisation of the agriculture sector, deliver social impact and provide medium-term

returns to investors. “We are currently fundraising for this latest fund,” Maske explains, “to allow us to invest across the entire value chain of agri, again with a Namibia focus”.

“It is the first Namibian agriculture private equity fund to stimulate the sector through growth investments in climate-adapted, technology-driven projects which impact the entire value chain.” The fund aims to raise N$1 billion

EOS CAPITAL

(US$70 million) to address the challenges faced by the agriculture sector in Namibia, and focus on improving productivity and sustainability.

“Again, with this fund we have the balance between the return aim and the social aim,” Maske says. “We see a gap in the country in the funding landscape, where we have good projects with debt funding available, but not equity funding, and as a result they are not ultimately able to reach fruition. We see that as holding real potential for us.

“The social impact that we can have is also significant. It is proven that growth in the agricultural sector has a marked

//EUPHRATES WILL SERVE AS A CATALYST TO INDUSTRIALISATION

BY PURSUING QUALITY ASSETS AT ATTRACTIVE PRICES //

knock-on effect on job creation and a reduction in income inequality. We are really trying to spark the sector to start growing as these will be vitally important for the country moving forward.”

Agriculture is arguably among the lesser known of the wealth of investment opportunities available today, but offers one of the strongest options for long-term wealth growth.

With the world’s population projected to increase again by more than 35% by 2050, prioritising investments in farmland is crucial as farmers across the globe will increase crop production, expanding the amount of farmland in use and enhancing productivity on existing land.

“The launch of this Euphrates Agri Fund comes at an opportune time, when public and private sector need to integrate and coordinate efforts in the promotion of investment in the agriculture sector,” summarised Mesag Mulunga, attending the inauguration on behalf of Percy Misika, Executive Director of the Ministry of Agriculture, Water and Land Reform.

“Eos Capital’s strategy and decision for launching the Euphrates Agriculture fund is to address the challenges faced by the agriculture sector in Namibia,” explains Maske, “and to focus on boosting its productivity and sustainability by means of an unlisted manager solution.

“Our mission is to contribute to the growth of the Namibian economy and the Agri fund will take us a step further. It will be attractive to investors seeking diversification and investing into real assets that provide a hedge against inflation.

“Agriculture is a diverse asset with a broad range of risk/return profiles and characteristics, offering options and diversification. Euphrates will serve as a catalyst to industrialisation by pursuing quality assets at attractive prices, seeking to maximise returns over the long term.”

WWW.EOSCAPITAL.COM.NA

www.enterprise-africa.net / 7

CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher.

Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved.

No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2021

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

AFRICA

Published by CMB Media Group Chris Bolderstone – General Manager chris@cmb-media.co.uk Kiln House, Fuel Studios, Pottergate, Norwich NR2 1DX T. +44 (0) 1603 855 161 E. info@cmb-media.co.uk www.cmb-media.co.uk

September 2021

www.enterprise-africa.net

Five-Star Strategies Allow The Capital to Seize Opportunities Exclusive interview with The Capital Hotel Group CEO Marc Wachsberger

ALSO IN THIS ISSUE:

Light Fibre Infrastructure / AstraZeneca / Masterparts / AWCA

AS FEAT UR ED IN

ENTERPRISE AFRICA

O CTO BER 2021