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Unlocking Efficient Project Funding for Infrastructure Development
Ziyanda Capital specialises in structured finance services for real estate, infrastructure and energy projects across Botswana, South Africa, Zambia, Mozambique and beyond. But why do we focus on these services?
The finance world isn’t just about connecting investors with project owners, it’s far more nuanced. It’s not about being a glorified postbox, it’s about analysing, identifying risks, mitigating risks and advising clients accordingly.
Realities of Expectations Asymmetry in Project Finance
Investors and project promoters often enter negotiations with mismatched expectations, what we call expectations asymmetry, or “information asymmetry on steroids.”
Project promoters expect to get money from investors with bare minimum information, whilst investors expect project promoters to submit reams and reams of information to show why the project is viable and feasible.
It takes a structured finance expert to bridge the information gap between investors and project promoters.
The reality about project promoters trying to do things by themselves are as follows:
- Investors’ side: They don’t have time for hand-holding clients. A single misstep by promoters signals incompetence, closing doors permanently to them.
- Promoters’ side: Many assume capital is plentiful and eager, expecting investors to handle basic tasks like risk identification or mitigation. This sense of entitlement leads to rejection, and it often breeds the misconception of investors not willing to invest in projects.
Cold fact: In Southern Africa’s competitive infrastructure market, unprepared projects fail fast. Professional project preparation and packaging is the promoter’s core responsibility – if you lack expertise, hire specialists. That is why Ziyanda Capital plays in this space, where we come in to bridge the information asymmetry gap.
Enter Structured Finance: Your Path to Optimal Funding
Once your project is scoped, costed, and planned, funding becomes the crux. There are certain project developers who are running around with project concepts, instead of scoped and costed projects, who are also looking to “source funding”.
Structured finance bridges this information asymmetry gap by designing tailored solutions that align lender and equity portions for maximum efficiency in terms of implementation and providing returns to all stakeholders in a project.
Key benefits of structured finance include:
- Risk allocation: Identifies, allocates, and mitigates project risks (e.g., construction delays in road development projects or delays in implementation of funding for renewable energy projects).
- Funding optimisation: Balances debt/equity mixes, terms (e.g., 10-15 years for energy projects, not unrealistic 20-year loans), and costs.
- Funding optimisation: Basic understanding that Equity Investors need to exit, and that when they do, they need to exit with investment multiples that make sense in terms of their targeted returns.
- Liquidity and sweeteners: Enhances cash flow with credit enhancements, tax shields, and regulatory perks.
- Investor matchmaking: Knows where to source capital: from DFIs like IDC to private equity funds – and negotiates optimal terms.
For example, in a recent Zambian solar project, structured finance reduced funding costs by 15% via blended finance, securing 70% debt at favourable rates while minimising equity dilution for the founding partners or shareholders. Structured finance brings the sensibility of arguments backed by numbers that are reflected in the financial model that runs off a set of agreeable assumptions.
Why Choose Ziyanda Capital for Structured Finance in Africa?
Ziyanda Capital is based in Johannesburg, Gauteng, with offices in Botswana, the UK (United Kingdom), Lesotho and Zambia, and soon-to-open offices in Eswatini.
Ziyanda Capital draws on deep experience in Southern Africa investment banking experience, project finance, public-private partnerships (PPPs) and renewable energy structuring and financial modelling that is preceded by thorough and robust engagements. Our expertise saves you from “pillar-to-post” frustration—delivering funding efficiently so savvy competitors don’t steal your idea.
Structured finance maximises your return on effort, cutting time, pain, and costs, all the while ensuring that you preserve your legacy as the founding partner in a venture or in a project. Structured finance brings the fusion between the legal and regulatory side of operations, with the commercial realities.
Ready to structure your next infrastructure or energy project?
Contact Ziyanda Capital today for a free consultation on your project, as well as a free funding assessment.