Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

Continue Reading

Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

Continue Reading

Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

Continue Reading

Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

Continue Reading

Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

Continue Reading

Categorized | Financial

Blackstone strikes African oil pipeline deal


Posted on September 21, 2016

Located at the junction between the Arabian Peninsula and the African continent, Djibouti is one of the most strategic sites in the world. With the support of Dubai, the country launched one of the most massive infrastructure projects ever attempted in east Africa. At a cost of 350 million dollars, the construction of the port complex of Doraleh in 2004, which included an oil terminal, a containment terminal and a commercial and industrial zone, transformed the physiognomy of this small country. The Doraleh oil terminal has been operational since June 2006. (Photo by Patrick ROBERT/Corbis via Getty Images)

Black Rhino, the African infrastructure investor owned by US private equity group Blackstone, has made its first $300m investment in a strategically important fuel pipeline between Ethiopia and Djibouti.

The deal, which is one of the most high-profile US investments in the region, is the first phase of the planned $1.6bn Horn of Africa pipeline, agreed by the governments of Ethiopia and Djibouti last year. The investment was announced on the eve of the annual US-Africa business forum in New York.

    The 340-mile long project will transport diesel, petrol and other products from facilities in the Arabian Sea port of Djibouti City to central Ethiopia, one of east Africa’s fastest-growing economies, which currently relies on trucks for its fuel supplies.

    “In Djibouti and Ethiopia, the growth of fuel demand has rocketed, as across east Africa,” said Brian Herlihy, Black Rhino’s founder and chief executive. “It is a major energy security issue.”

    The project is likely to be closely watched given the changing geopolitical balance in the region. Djibouti has become a military hub for several governments in recent years, including hosting China’s first ever overseas naval base.

    The pipeline will also pass through Ethiopia’s Oromia region, where protests have recently erupted against the government.

    Ethiopia and Djibouti are seen to have picked a US partner for the pipeline in part to lessen their reliance on China for key infrastructure. Chinese state-owned companies are building a railway between the two countries that is due to open next year.

    “You’re also starting to see countries reaching certain debt levels reminding them that they can’t take these projects on all by themselves,” Mr Herlihy said.

    “The reality is that this is the lowest-cost solution out there,” he said, adding that the pipeline concession had a “very transparent, long-term structure”.

    Funding for the project will be drawn from equity from Blackstone funds and debt raised from institutional investors.

    The pipeline will also be one of the few projects supplying fuel to Africa’s interior not to be constructed with the involvement of a commodity trading house.

    Black Rhino is also announcing a $300m investment in a Senegalese fuel power project at the US-Africa forum.

    Organised by the US department of commerce and Bloomberg Philanthropies, founded by former New York mayor Michael Bloomberg, the forum is intended to bring together African governments with US companies.

    The forum will be one of the legacies of the administration of President Barack Obama as he prepares to leave office, as well as the Power Africa initiative to develop generation capacity on the continent.

    Caterpillar, the US construction equipment manufacturer, will also announce at the forum a $1bn investment in staff training and rebuild facilities in African markets over the next five years.

    Penny Pritzker, the US commerce secretary, denied that US government efforts to increase American corporate involvement in the region were in competition with Chinese government investments.

    “Ours is an American approach, and we’ll leave other countries’ models to other countries,” she added.