New funds eye regional diaspora and Somalia

Saturday June 15 2013

By STEVE MBOGO, Special Correspondent

Kenya, Somalia and Ethiopia are among the countries that will benefit from $1 billion DVK Africa Development Fund being fund-raised under by DVK Group, a UK-based global corporate finance, commodities and private equity firm.

DVK announced that it was also creating the East Africa Core Development Fund to attract East African nationals living abroad to invest in the region.

The initial focus of the DVK Africa Development Fund is Somalia. The company’s founder, Deepak Kuntawala, said it would supplement the donations the country is receiving, as Somalia does not qualify for loans from key lending institutions such as the Africa Development Bank due to unpaid debts.

Received commitments

Mr Kuntawala added that the fund had received commitments for about $330 million, mainly from investors in Qatar, India and Canada. He said the fund would be Sharia-compliant, meaning that it would only invest in projects that meet Islamic finance requirements.

The company said it would seek public-private partnerships to build roads, bridges, hospitals and schools, and opportunities to supply trucks and finance cargo aviation.

The company is yet to give details of the East Africa Core Development Fund, but, if put in place, it will be the first such initiative to help the diaspora invest in emerging opportunities in the region.

Specialist trade

DVK is involved in financing manufacturers, suppliers, producers, agents, traders, importers, financial institutions, and specialist trade and commodity finance houses. The company also arranges private equity, venture capital and mergers and acquisitions.

DVK is therefore seeking investors in opportunities arising from a stabilising Somalia, according to details on its website.

The company hosted the leaders of Somalia, Somaliland and Ethiopia in London in the past week to discuss how the group would help structure funds and investments in infrastructure, health, education and energy.

The company represents wealthy investors such as the Reliance Group of India, and others from the Middle East and Canada that are keen on exploring for oil in Somalia, including the country’s breakaway regions of Puntland and Somaliland.

“Somalia, and in particular Puntland, remains one of the under-explored countries that have a high potential for considerable reserves of hydrocarbons,” said DVK in a statement.

“The region has all the geological requirements to become a commercial oil producer.”