Hip-hop stars join forces to help Africa plug in

Aliaune “Akon” Thiam and Stanley Enow – the American and West African international hip-hop stars – are joining forces to promote major African energy projects such as a 350 MW hydroelectric power plant in the strategically vital West-Central African nation of Cameroon.

A Senegalese-born American hip-hop icon, Akon has become one the major players in the African solar power industry by using his for-profit Africa Lighting group as the marketing arm for mainland Chinese solar energy manufacturers and developers.

On his part – Stanley Enow says he wants to use his popularity after being awarded by Viacom unit MTV’s Best New Act in Africa and global tours with Nigeria’s Davido – to bring desperately needed electricity generation to his native Cameroon.

Separately, Cameroonian hip-hop artist and Motherland Empire co-founder Stanley Enow first traveled to Washington, DC, to attend the Congressional Black Caucus Foundation Annual Legislative Conference (CBCFALC)and its Phoenix awards dinner hosted by then president Barack Obama and First Lady Michele Obama in 2015.

Akon said his for-profit venture Akon Lighting Africa is already supplying more than 250,000 residents in rural areas with solar-generated electricity and expects to expand Lighting African to the Republic of Congo, Kenya and Cote D’Ivoire.

Lighting Africa already generates over $20 million in revenues and that figure is expected to soon rise to circa $100 million, according to sources familiar with the company.

Akon told Capitol Intelligence Group that his group has a $1 billion credit line for African nations to increase electricity capacity through solar, mini-grid and now hydroelectric power plants.

Akon said he was inspired to bring much-needed energy to the poorest areas in the world due to his childhood experience carrying water in Senegal.

Akon said he has been holding talks with RLJ, the private equity fund set up by Robert Johnson, who along with his wife Sheila Johnson, founded and sold Black Entertainment Television to Viacom for $2.4 billion. RLJ works under the Carlyle Group, which was co-founded by David Rubenstein and whose fund is a significant investor in Africa along with Stephen Schwarzman’s Blackstone.

US agencies such as the Overseas Private Investment Corporation (OPIC) and the International Finance Corporation (IFC) are currently working on two 400 megawatt hydropower plants to be built in Cameroon, which faces sporadic attacks from ISIS ally Boko Haram and growing separatist unrest.

Enow has already met officials at OPIC and said he would like to use his influence to help bring electricity to his native Cameroon and Africa in general.

Enow was also able to meet and speak with US Congressman Andre Carson, who headed up the Hip-Hop And Politics panel at the Congressional Black Caucus convention.

At the CBCF event, Enow was also able to meet and speak with CBCF Chairman R Donahue Peebles; CBCF co-chairs Representatives Terri Sewell and Hakeem Jeffries; House Minority Whip Steny Hoyer and even former Maryland governor Martin O’Malley.

The proposed plant, likely to be built by General Electric, combined with another planned 400 megawatt hydroelectric plant planned by Electricite de France (EDF) not only meets the country’s immediate energy needs but can also add another 2% GDP growth to a country already growing by 5-6% a year, Cameroon Finance Minister Alamine Ousmane Mey said.

In an interview with Capitol Intelligence/CI Africa during the World Bank Spring Meetings in Washington, DC, Minister Mey said Cameroon currently produces some 1,200 megawatts of power and that the country needs to produce 2,000 megawatts to sustain economic growth and lower the overall cost of power production.

The GE power plant is a tremendous opportunity for Enow and Akon to join forces to bring stability to Cameroon.

“The project is one the best means to meet the US government aims in its billion-dollar Power Africa and at the same time bring political and economic stability to Cameroon,” a banker familiar with the project said.

The banker noted that Cameroon, already facing the Boko Haram threat, is now in near civil war as the country’s English-speaking minority is seeking to create an independent state in a rebellion over perceived political and economic discrimination by the French-speaking majority.

Giving the green light for the 355 MW project is now up to Actis, the London-based private-equity firm that owns Cameroon utility Societe Nationale d’Electricite (SONEL) and is under the direct control of Actis’s senior partner, Tobjorn Caesar.

It now up to Sonel to agree to a Power Purchase Agreement (PPA) with any new operator as the privately owned group has already been provided with all the necessary feasibility and environmental impact studies by Rabat, Morocco-based Power Platinum, once a portfolio company of New York-based Brookstone Partners, a private equity concern.

A source familiar with the matter confirmed that environmental impact studies for the plant have been completed and the studies showed no reason for OPIC to not go ahead with its planned investment.

The sources said that while EDF has won a power purchase agreement, current and former White House officials say they were frustrated by the failure of Brookstone Partners and Power Platinum to move on the project, which has vital US and NATO security implications in the global fight against terrorism and international organized crime.

“I guess that the management of Sonel has been distracted, to say the least,” one source said.

Another major obstacle for the funding of the US-backed Cameroonian hydro-plant is the fierce turf war between the United States Agency for International Development (USAID) and Overseas Private Investment Corporation (OPIC) over who will manage the US government’s planned $7 billion investment in the sub-Saharan African power sector as part of White House-mandated and US Congress-approved Power Africa program.

Private sector companies, leading members of the US Congress and multilaterals such as IFC and African Development Bank all agree that OPIC is much better equipped to handle Power Africa deals than the scandal-plagued USAID.

“OPIC knows how to structure a deal under best practices while USAID likes to work on a relationship basis and does not understand the need for return on investment on infrastructure projects,” said one senior investment banker who has worked with both OPIC and the USAID.

Under US Power Africa program, USAID is limited to a mere $285 million in technical grants; OPIC has $1.5 billion available for financing and insuring energy projects in Africa; and the US Export-Import Bank (EXIM) has up to $5 billion in support of US exports in the development of energy projects across sub-Saharan Africa.

Notwithstanding the OPIC-USAID turf war, the timing for the Cameroonian hydro plant could not be better as West African infrastructure projects are now priority investment targets both for GE with its takeover of France’s Alstom Energy and for the Dubai-based Mara Group investment fund headed by Ashish Thakkar.

In fact, the Mara Group is currently in the process of launching a $1 billion Pan-African infrastructure fund in partnership with GE, GE and Mara sources told Capitol Intelligence Group.

One source said that hydro-power projects are of special interest to both GE and Mara as GE will be able to exploit Alstom’s industry expertise in building hydro-power plants in Europe and Africa.

The investment bank best positioned to execute arguably the largest private-sector hydro-power project in sub-Saharan African is New York City-based Citigroup, INC led by CEO Michael Corbat.

Mara Group, through its Atlas Merchant Capital pan-African banking venture headed by former Barclay’s Bank head Bob Diamond, is also ideally positioned to be a co-sponsor on any pan-African project financing deals.

Bob Diamond and Atlas Mara major shareholder, Canada’s Fairfax Africa, are close to receiving OPIC funds to take over the Union Bank of Nigeria, one of Nigeria’s largest commercial banks.

Earlier this summer, OPIC launched Connect Africa, an initiative to improve connectivity in Africa by investing $1 billion in physical infrastructure, technology, and value chains. OPIC has just completed a $100 million financing guarantee for Beirut, Lebanon-based Africell Holding, a $2 billion-plus pan-African mobile phone carrier owned by Ziad Dalloul with operations in Sierra Leone, Uganda and the Democratic Republic of Congo.

US President Donald Trump has mandated OPIC, and at the same time boosted its investment war chest to $60 billion, as a concrete tool to counterbalance aggressive Chinese infrastructure investment on the African continent.

It is now America’s hip-hop icon, Akon, and the king of Afro hip-hop, Stanley Enow, who find themselves at the center of the Great Game between the US and China to win over the hearts and minds of Africa and exert geopolitical influence.