DFIs and debt; if there were two major themes to last week's private capital markets in Africa, it was the prominence of development finance institutions in deal activity and debt as the asset class. Equity deals were few and far between, and just as we were putting the newsletter to bed earlier, the  Financial Times broke a story which, if borne out, will definitely be one of the biggest stories in private equity investing in Africa this year.

Various countries development finance institutions were active last week, particularly in the energy sector. Dutch development bank FMO led a $10.2 million syndicated loan deal for a 5.4MW run-of-the-river hydro power project owned by Lubilia Kawembe Hydro, a development company majority owned by Frontier Market Energy and Carbon Fund, a Danish private equity fund. Emerging Africa Infrastructure Fund is participating on the deal, providing 50% of the financing for the loan.

UK development finance institution, CDC Group, is backing Virunga Energy, a hydro-electric power business with a 10-year loan of up to $9 million for its project to build two new plants with almost 50MW generation capacity in North Kivu, Eastern Congo. It's expected the financing will be made in two tranches - the first, an initial investment of $2.5 million will go primarily towards the expansion of the electricity grid around the Matebe hydroelectric plant. The balance of $6.5 million will become available once certain conditions are met, allowing the construction of two new hydroelectric plants with 35MW of generation capacity near Lubero and Butembo.

CDC was active in the financial services sector, too, last week. The UK development finance institution announced that it's taking a 10.68% equity holding in I&M Holdings, the East African banking group, buying the stakes owned by fellow European DFIs, DEG and Proparco.  The deal is the second financial institution investment made by CDC in the region in recent months following the acquisition of a stake in CRDB Bank, Tanzania's leading provider of financial services in September 2015.

In private debt news, Standard Bank led an increase of $95 million for Helios Towers Tanzania's syndicated term loan facility. Both local and international institutions supported the lending syndicate. The fresh funding will allow the company, whose parent company, Helios Towers Africa, numbers several private capital investors among its shareholders, to expand its network of telecommunication towers across Tanzania as well as support ongoing investments in operational improvements across the tower portfolio. 

Private equity investment firm Kibo Capital Partners is backing General Cargo Group, a Kenya-based logistics services company in an undisclosed deal. The investment is being made through the $58 million Kibo Fund II, a private equity fund that looks to make growth equity investments in SME and mid-market companies across a number of sectors in East and Southern Africa as well as the Indian Ocean islands. Kibo is partnering with Velogic, a regional logistics provider, on the transaction in order to leverage the Mauritius-based company's operational systems and best practices to accelerate value creation in the new portfolio company.

Continuing with other private equity firm sponsored deals last week, Quantum Global Investments Africa announced that it has acquired Lusaka's InterContinental Hotel from Kingdom Hotel Investments in a deal that closed at the end of March. The transaction, which sees Quantum pay $35.9 million for 100% of the InterContinental Hotel was the debut investment for one of Quantum's funds, the $500 million QG Africa Hotel, a Mauritius-based investment fund. The deal hopes to capitalize on the demand from rising numbers of international business travelers to Africa, attracted by the continent's stronger performance in comparison to many other parts of the world as well as increasing political stability and transparency on the region.

The Japan International Cooperation Fund, or JICA, announced last week that is committing $30 million to the IFC's Middle East and North Africa Fund which targets equity investments in private companies in the MENA region. The fund, which is being managed by the IFC Asset Management Company, is targeting primarily financial services, infrastructure and manufacturing opportunities in MENA's developing countries. 

Two recently released private equity studies were in the news last week, one global and one specific to southern Africa. In the first, Bain Capital's annual global private equity report finds that leading private equity firms are working hard to understand the criteria for their success as LPs look to expand their allocations to the asset class, competition for deals increases, recession risks mount and the industry looks to the next stage of its evolution. And a new study from the South African Venture Capital and Private Equity Association has found that despite a strong track record of superior returns and regulatory changes allowing increased allocations, the exposure of pension funds in the SADC region to the private equity asset class remains limited.

And finally, the  Financial Times reports that Atlas Mara is joining forces with private equity giant Carlyle to prepare a bid for Barclay's Africa assets. No formal approach has been made to Barclays yet, the news organization reports, and bid preparations are at an early stage. If the partnership comes to fruition and is successful in a bid, it would be a significant industry story for 2016.