The African private equity landscape, once hailed as the next frontier for high-growth returns, is confronting a sobering reality. As firms contend with currency volatility, post COVID migraines, regulatory bottlenecks, and the sheer complexity of infrastructure finance, high-profile setbacks involving former heavyweights such as Emerging Capital Partners (ECP), The Carlyle Group, and Helios Investment Group illustrate how quickly the promise of Africa can turn perilous.
Helios Investment Group and the Tema LNG Debacle
Perhaps no single investment better captures the perils of African infrastructure finance than Helios Investment Group’s failed Tema LNG project in Ghana. Eight years ago, Helios aimed to construct Africa’s first LNG terminal, a project expected to position Ghana as a regional gas hub . The cost is estimated to be over $300 million . Today, the project stands as a cautionary tale.The terminal, which was expected to start operations in 2020, has never become operational. One of the two custom-designed vessels for storage and regasification now sits idle in Tema, gathering seaweed and hosting birds’ nests instead of processing LNG . The second vessel remains in Asia and has never been commissioned.
Helios recently announced a significant write-down on the Tema LNG Terminal investment as its fate sits in the hands of the State owned oil company (GNPC). Helios also allegedly owes millions of dollars to South African banks due to loans guaranteed by one of its funds and is desperately trying to shed the asset. All the while local and international suppliers await overdue payments. To compound the pain, the legal exposure stemming from the Tema LNG project appears to be substantial and may have reputational ramifications for the Helios Founders and the finely tuned Mayfair PR machine . Reports indicate that a lawsuit is being filed against Helios by a partner for breach of contract and non-payment issues in the US courts . This comes on top of earlier calls from African NGOs to the Ghana Government for the project’s initial suspension, with groups including the African Centre for Energy Policy (ACEP) and IMANI Centre for Policy Education alleging “perverse bid-rigging and attendant procurement irregularities” .
ECP and the Exit conundrum
At their peak, Emerging Capital Partners (ECP) was the gold standard for PE in Africa. However, ECP’s Oragroup investment, its largest, was held for over a decade due to failed sale attempts . In 2020, a regional regulator blocked ECP’s initial sale of its Oragroup stake to an Ivorian pension fund. To finally exit Oragroup, ECP had to accept a “substantial discount” to its initial valuation.
In Kenya the Government ruled that ECP owed $19.3M in taxes from the Java House sale, asserting that value was created “locally” regardless of offshore structure . ECP Kenya subsequently filed for liquidation
Carlyle’s Group’s failed African safari
The Carlyle Group’s trajectory in Africa offers perhaps the clearest illustration of the challenges facing large-scale buyout strategies. In 2014, Carlyle raised nearly $700 million for its Sub-Saharan Africa fund, built a best in class team while betting on growth, scale, and multiple expansion investments.
However, by 2019, the central issue was no longer finding deals but exiting them by any means necessary. Large-ticket realisations were slow, highly sensitive to currency movements, and dependent on a limited pool of strategic buyers . The chapter effectively closed in 2020 when the Africa deal team spun out, and Carlyle raised the white flag and called an abrupt end to their African safari by winding down this dedicated pan-African buyout platform.
In summary, private equity in Africa case studies reveal a fundamental truth: the continent’s structural complexity demands much more than capital. It requires deep deal knowledge, Olympic scale stamina and a localized new approach.
The experiences of ECP, Carlyle, and Helios in Africa demonstrate the fact that the most sophisticated investors do not have all the answers and even the most admired outfits can be caught off guard.
