In a recent interview, Sandile Mbulawa, chairperson of Prism Investment Holdings (“Prism”), delved into the expansive and multifaceted world of infrastructure and highlighted the critical role infrastructure plays in shaping investment decisions and driving economic growth across Sub-Saharan Africa.
Infrastructure and its cross-section of sub-sectors
Prism covers a wide range of infrastructure sub-sectors, from traditional ones like roads, rail, bridges, and water – to emerging sectors, particularly in green energy. Take rail, for example, especially in the context of bulk commodities like coal and iron ore. Mbulawa explained how the availability and allocation of rail resources significantly impact investment valuations in the bulk commodity sector. This complexity underscores the edge the Prism team brings with their keen understanding of infrastructure logistics, mineral resources, as well as the financial implications.
The oil and gas sector, another infrastructure-heavy industry, demands meticulous risk assessment and substantial infrastructure investments, so getting it wrong can lead to significant capital losses. Another important consideration, Mbulawa pointed out in his interview, is the political risk at play given the major involvement of governments in infrastructure projects.
Prism is also pioneering in the green hydrogen sector, focusing on renewable energy, an understanding of demand, and distribution logistics. Mbulawa also mentioned their involvement in large real estate infrastructure projects, where their multidisciplinary collaborations with engineering companies aim to deliver comprehensive solutions to clients in both public and private sectors, leveraging the Prism team’s engineering background to navigate complex discussions and develop reasonably accurate financial forecasts.
Infrastructure’s critical role in valuation
Mbulawa shared insights gleaned from Prism’s experience and explained how decisions around infrastructure – whether commodities are exported by rail or road, or whether power is sourced from coal-generated or renewable energy – can materially shift valuations. Mbulawa stated that “in many transactions, infrastructure is no longer an afterthought, it is a key part of the decision-making process”.
The Infrastructure Fund
Earlier this year, Prism Investment Holdings was appointed to the Infrastructure Fund panel of advisors, a limited and prestigious panel. Mbulawa shared their current efforts in raising capital for the fund so that they can create a dedicated channel for infrastructure investments in South Africa that can address the sector’s critical needs.
A collaborative and practical approach
One of the unique advantages of working with Prism is having a team comprising engineers and investment bankers with deep Sub-Saharan Africa expertise. This blend allows for an approach that can assess risk from both practical and financial perspectives, resulting in financial models that relatively accurately reflect the technical and commercial aspects of investments.
Looking ahead
Prism eagerly anticipates engaging stakeholders at the upcoming Infrastructure Africa conference in July 2024. Because, as Mbulawa stresses, it is vital to drive collaboration with the public sector, the private sector, and financial institutions to address infrastructure constraints in South Africa and the Sub-Saharan region.
For those interested in long-term investments in South Africa and beyond, Prism Investment Holdings stands ready with the right expertise to ensure mitigated risks along with maximum returns.