Upstream Advisory
Pre-feasibility and Feasibility Studies
Many proposed projects fail to reach commercial close and financial close due to inadequate preparation, including poor assessment of viability. Due to the immense amount of funds required to undertake these projects, it is necessary that a rigorous analysis is done guided by key investor considerations. We organise, coordinate and lead multidisciplinary teams to deliver bankable feasibility studies.
Scope of Services
- Detailed analysis of the baseline for the proposed investment, fund or company
- Detailed financial modelling to assess the financial viability, economic viability, and value-for-money if required
- Supporting the review of the legal and regulatory regime that would affect the implementation and success of the initiative
- Assessment of technical and commercial options for implementing a project, a fund or company
- Enumeration of the key risks and establishing key risk mitigants
- Market sounding with stakeholders including sponsors, investors, service providers, governments, and off-takers
- Developing analytics to demonstrate financial viability, impact measurements and stress testing the same under various scenarios
Capital and Financial Markets Scoping
and Development
Capital markets play an important role in connecting companies and projects seeking funding with pools of local and foreign capital seeking risk-adjusted return. With the development of capital markets in Africa, there is an increased need for tailored financial instruments and mechanisms that solve the specific challenges of the African financial markets ecosystem. The team at AIS Capital has extensive experience in assessing capital markets and introducing new and innovative instruments or structures that attract new funding or direct financing to neglected sectors.
Scope of Services
- Analysis of the status quo of capital markets - including detailed assessment of key stakeholders (investors, regulators, issuers, and intermediaries), available financial instruments, market breadth and depth, and regulatory regime
- Assessing supply and demand of existing instruments and identifying unmet needs from both the issuer and investor communities
- Benchmarking capital markets with peer markets and more advanced markets – by GDP size, products, and geographies
- Developing pipelines of projects to be funded through innovative instruments, and action plans for market improvement
- Engaging stakeholders on proposed innovations to capital market structures and instruments - assisting to lobby for new processes or regulatory frameworks
- Identifying and leading demonstration transactions
Structuring Innovative Financing Mechanisms
Investment opportunities in Africa frequently necessitate employment of innovative instruments and structures that allocate risk and return in a more nuanced manner than conventional debt and equity structures. This customization addresses perceived risks and/or implementation challenges unique to the continent. The success of these bespoke financing mechanisms is greatly determined by the robustness of the structuring done during the preparatory stages.
Scope of Services
- Assessment of the existing financing landscape - demand and supply analysis - and articulating the gaps; articulating the value for the proposed financing mechanism to the various stakeholders
- Detailed modelling of the operations of the vehicle and advising on a capital structure to accommodate the risk-return profiles of different investors and to accommodate the pricing scenarios for the various instruments
- Analysis of the relevant legal and regulatory aspects that would affect the viability of the proposed financing mechanism vehicle, including domiciliation. Recommending governance and management structures
- Developing policies, procedures for the financing mechanism including the investment policy and risk management framework
- Managing the capital raising process from identifying investors/guarantors and running roadshows to financial close
Business Plan and Financial Models
The combination of market knowledge and advisory experience of the AIS Capital team allows us identify potential opportunities and challenges for existing and proposed businesses and projects. We employ this expertise to advise companies seeking to raise new capital, to sharpen their theses, restructure operations or seek financing. We frequently develop models to understand the unit economics of the businesses/projects, identify the primary commercial drivers, and assess scenarios that could affect the viability of the business.
Scope of Services
- Understanding of revenue drivers including products/services offered, customer segmentations, growth scenarios, and pricing analysis. These help to understand the revenue potential and provide top line advisory
- Assessing the operating cost drivers of the business/project and their variability. This involves a drill-down of operating costs to build robust costing templates for products and operations and calculating unit gross margin analysis
- Developing capex budgets and preparing related schedules to inform capital needs, depreciation schedules, and tax shields if any
- Reviewing and advising on the management and governance structure of the project/company
- Developing financing options that work for the business models adopted, conducting sounding with potential investors, and developing financial return metrics. In addition, articulating the impact story preparing the Theory of Change for impact investors
- Detailed analysis of financial and non-financial risks – business, markets, credit, operations, macroeconomic, regulatory, reputational etc
Sustainability Finance Advisory
Environmental, Social and Governance (ESG) considerations have become increasingly important among institutional investors who do not only seek commercial return, but also require that their investments demonstrate social impact. The AIS Capital team has a deep understanding of the metrics used to assess impact and the applicability of such in the SSA context.
Scope of Services
- Offering advisory services to develop new sustainability finance mechanism for example set up of green funds or women focused funds or financing programs within financial institutions
- Advisory services to set up sustainability bond programs and transaction advisory services to place such bonds with investors
- Consulting type activities to scope out opportunities for sustainability finance and provide options analysis for potential interventions in various African jurisdictions e.g., scoping for gender bonds or assessing SDG compliance within projects or sectors
- Working with financial institutions to identify opportunities to green their portfolio and attract sustainable financing
Downstream Advisory
Transaction Advisory: Project Finance
Corporates prefer to fund projects with less commitments against current business cashflows and assets, thus preferring to finance the project in an off-balance sheet manner. The public sector in Africa has also embraced project finance to keep project debt and liabilities off-balance sheet, freeing up critical fiscal budgets. Our transaction advisory team assist clients to structure and execute project finance transactions by leveraging our local insights and relationships with project finance investors active in critical sectors across Africa.
Scope of Services
- Evaluation of whether projects are suitable for project finance structures. Conducting project appraisal to determine economic and financial viability
- Preparing the necessary documentation to prepare projects for project financing, including financial models and project memorandums
- Coordinating and assisting legal teams in the design and incorporation of project Special Purpose Vehicles. (SPVs) to execute projects. Advising on appropriate capital structure and governance of the SPVs to ensure that sponsor and investor interests are aligned
- Planning and execution of fundraising process; developing investor lists, arranging and leading investor meetings and roadshows, managing of transaction data room
- Supporting clients in negotiating the terms of investments and coordinating with transaction lawyers to ensure execution of final transaction documents. Providing all other necessary support to reach financial close and supporting clients to clear Conditions Precedents
Transaction Advisory: Corporate Finance
Enterprise managers require critical support to structure and implement capital structure transactions to afford them the required focus in running their businesses. Our corporate finance team is experienced in strategy evaluation and assessing capital needs, corporate financing and value maximisation strategies for capital providers. We bring a network of investors with grit and tenancy to take on opportunities within African corporates at different stages of growth.
Scope of Services
- Detailed analysis of the company’s historical performance, projections, valuation models and benchmarking
- Supporting mergers and acquisition activities including assessment of targets, supporting clients by preparing required documentation, advisory services to take deals to close
- Development of investor marketing materials including investment teasers, memos, and presentations
- Planning and execution of fundraising process, developing investor lists, arranging and leading investor meetings and roadshows, managing of transaction data room
- Supporting clients in negotiating the terms of investments and coordinating with transaction lawyers to ensure execution of final transaction documents
- Providing all other necessary support to reach financial close and supporting clients to clear Conditions Precedents
PPP Structuring and Implementation
Governments in developing countries are increasingly tapping into private capital to develop public infrastructure, mostly in response to worsening budgetary constraints and the desire to bring private sector expertise in implementing and operating public infrastructure solutions. Public-Private Partnerships involve multiple stakeholders – government, investors, developers, operators, contractors, guarantors, civil society – and agreements/contracts that need to be structured appropriately to ensure alignment of interests and appropriate risk sharing.
Scope of Services
The services offered by AIS Capital Advisors for PPP structuring include:
- Preparing of Public Sector Comparator and PPP financial model, including Value for Money analysis under various scenarios
- Assisting the legal counsel to advise on the appropriate PPP model for project
- Sounding of the PPP structure with potential operators and investors and assisting the Contracting Authority to obtain necessary approvals
The services offered by AIS Capital Advisors for PPP procurement support include:
- Assisting the Contracting Authorities to run the PPP procurement process as per the regulations. This includes setting up and managing data room, preparing bid documents, running information sessions for bidders, bid evaluations and supporting the selection and award process
- Supporting bidders to respond to PPP bids as bid advisers especially around modelling and crafting their financial offers
Post Investment Review and Advisory
Post investment, it is critical to review the investment process and take in lessons for future investment opportunities. This is especially so in frontier markets. The objective of these reviews is usually to reconcile if the objectives of the investment have been met, to gauge the effectiveness of the investment, and to record lessons learned. Our advisory team has a deep-dive knowledge of the post investment reviews and has reviewed investments across Africa making recommendations to enhance growth and sustainability.
Scope of Services
- Reviews of investment processes by carrying out interviews and surveys of investees and other stakeholders including co-investors
- Post investment diligence especially of around performance reviews against business plans and financial projections. Conducting gap analysis and making recommendations
- Conducting fund reviews for portfolio managers in fund of fund structures to evaluate how the managers react to changing market conditions and assessing the suitability of their investment policies
- Reviewing and advising on changing investment risk profiles against capacity limits and tolerance levels Supporting credit rating advisory together with Rating agencies and advising on realignment actions if required
- Assessing suitability of investee teams as well as fund managers against set criterion or objectives