By: OrePulse

Madagascar is seeking to raise up to $5 billion through a new partnership with asset manager Gemcorp Capital Management to finance energy, infrastructure, and mining projects, according to Gemcorp and Madagascar's sovereign wealth fund.

The tie-up, announced last month, forms a central part of the Madagascar government's push to accelerate economic growth in one of the world's poorest nations. Gemcorp, headquartered in London, plans to open an office in the capital, Antananarivo, before the end of the year.

Andry Raharinomena, chairperson of the Fonds Souverain Malagasy (FSM), which signed the agreement with Gemcorp, said the collaboration would provide "an investment platform to attract international capital and strategic partners" for projects the Madagascar government has identified as priorities.

The FSM is already involved in roughly a dozen projects that require financing and is in talks with various government ministries about others, Raharinomena said. He said he wants Gemcorp's help in raising as much as $5 billion over four years.

Gaj Wallooppillai, Gemcorp's head of strategy, said the firm was ready to support the FSM in reaching that fundraising target. Gemcorp "has a track record of making strategic projects bankable," he said. "That expertise is where we think we can drive enormous value."

Among the priorities the FSM wants financed are three hydropower plants, several smaller solar facilities, and the development of mineral deposits including graphite, cobalt, nickel and rare earths. Most of Madagascar's mineral resources remain undeveloped, with only a small number of commercial mining operations currently active in the country.

Gemcorp, an emerging-markets investment firm founded in 2014, has deployed more than $10 billion and describes itself as one of the largest private investors in Africa. Wallooppillai, who is based in Abu Dhabi, said the firm's initial role with the FSM would be advisory. Gemcorp can also help the FSM approach African development finance institutions and other sovereign lenders, including those in the Gulf, he said.

Raharinomena described the partnership as a way to strengthen "our sovereign wealth fund, which is still very young." He said the FSM would raise all of its capital externally for now because it does not yet have the financial capabilities to invest directly.

Raharinomena also said the FSM has taken over the Madagascar state's interests in a mineral sands project owned by Rio Tinto, though he did not give further detail on that holding.

Raharinomena, a former Malagasy ambassador to the United Kingdom, was appointed by Madagascar's government in July to lead the FSM. Wallooppillai said the fund now has "a new lease of life with a real focus of being the catalyst for attracting foreign capital," adding that doing so requires "strong relationships with those who are investing already in Africa."