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Equity firm wins Kigali shopping complex deal

Private equity firm Fusion Capital has won a $16.9 million (Sh1.48 billion) contract to develop a shopping complex for Rwanda’s Kigali County Council.

The development, to be known as Kigali Heights, will be built on a 1.1 acre plot in the Rwandan capital.

Kigali Heights will have a total lettable area of 10,829 square metres of commercial space and 4,641 square metres of retail space covering nine floors.

It will be Fusion Capital’s first real estate investment in Rwanda.

“Fusion’s investment will be in the form of both equity and debt. Fusion will also involve interested local financial providers in Rwanda and across the region in the project,” said the private equity firm in a statement.

Fusion Capital is the principal financier of the project while Kigali Heights Development Company will be the real estate partner.

Financing alternatives

The project was commissioned on January 17 and is expected to create 300 new jobs. Fusion Capital said it was raising £100 million (Sh8.7 billion) for the real estate sector.

The private equity firm had earlier said that it planned to list on the Nairobi Securities Exchange to raise additional capital from the public.

The firm had Sh15 billion in capital, but said it was targeting an additional Sh6.7 billion from investors in Kenya and the United Kingdom. The money was to be raised by March this year.

Fusion Capital invests between $250,000 (Sh21.8 million) and $5 million (Sh437 million) per deal in real estate and small and mid-size enterprises.

The company is currently financing 425 clients in Tanzania, Rwanda, Uganda, and Kenya and is also planning to launch operations in Burundi.

Fusion Capital joins Fanisi Capital in the fledgling Rwanda market. Last week, the firm announced that it had invested in Sophar, a Kigali-based drugs wholesaler, in a deal that could have seen the Kenyan-based investment firm sink Sh260 million in the business.

The firm did not disclose how much the deal was worth, but its investment policy is to put a maximum of $3 million (Sh260 million) in high potential firms.

Investment and private equity firms have been bullish on regional SMEs, offering the firms much needed financing alternatives besides the traditional bank loans.

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