Nyker: Long-term offtake arrangements key to optimise assets for exit
The Managing Partner of Saja Climate Partners, Jasandra Nyker says to future-proof Africa’s assets for exits, shareholders must provide potential investors with confidence in the returns on their investment. She notes assets with stable cash flows, strong off-taker agreements, and low operational risk are more appealing to buyers seeking long-term returns. She joins CNBC Africa for more on these and how investors should restructure their portfolios.
Tue, 03 Sep 2024 11:42:30 GMT
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AI Generated Summary
- The importance of stable cash flows, robust offtake agreements, and low operational risk in attracting long-term investors seeking stable returns in Africa's investment landscape.
- Recommendations for portfolio restructuring, emphasizing regionally-focused opportunities to leverage economies of scale and scope for maximizing value creation.
- The critical role of strategic partnerships and co-investments in diversifying ownership, broadening investor bases, and driving market maturity in Africa's evolving investment ecosystem.
Africa's economic landscape is increasingly becoming attractive to investors seeking long-term returns on their investments. In a recent interview on CNBC Africa, Jasandra Nyker, the Managing Partner of Saja Climate Partners, shared insights on how shareholders can future-proof Africa's assets for exits by providing potential investors with confidence in their returns. Nyker emphasized the importance of stable cash flows, strong off-taker agreements, and low operational risk in optimizing assets for exit strategies.
Nyker highlighted that in the renewable energy sector, having robust offtake arrangements, especially those denominated in hard currencies aligning with debt structures, is crucial for attracting investors seeking stable returns. Additionally, mitigating operational risks by efficient fleet management and optimizing asset availability is essential for maintaining asset value. Nyker stressed the significance of fostering strong community relationships, being a responsible market operator, and adhering to regulatory standards and ESG best practices.
Regarding portfolio restructuring for investors, Nyker advocated for regionally-focused opportunities to leverage economies of scale and scope. By consolidating assets in specific regions, investors can enhance expertise, gain deep insights, and maximize value creation. Nyker recommended considering regional and pan-African strategies to localize approaches and better align with market dynamics, ultimately facilitating smoother exits by potentially divesting assets in parts.
Strategic partnerships and co-investments were also highlighted as crucial in the restructuring process to diversify ownership and broaden investor bases. Nyker emphasized collaborating with industry partners, involving local pension funds in equity ownership, and attracting new investors as minority owners to drive market maturity and capitalize on African market dynamics.
Looking ahead, Nyker foresees exits occurring as businesses mature, especially within the energy transition space, signifying a potential wave of exits in the African market in the coming years. As Africa's investment landscape matures and diversifies, strategic exits will play a pivotal role in reshaping the continent's economic trajectory.
In conclusion, Nyker's insights shed light on the evolving investment landscape in Africa and the critical strategies shareholders and investors need to consider to optimize assets for exits and navigate the continent's burgeoning markets successfully.
