CRESCENTcapital - The Context

Massive investment needs for energy and infrastructure in the target region:

 

  • Large-scale demand for energy and infrastructure investments in the target region due to deferred investments, convergence with developed markets, high growth, and demography.
  • Increasing investments in renewable energy due to improved awareness on climate change, regulatory requirements, tariff support, and increasingly unstable fossil fuel prices in the long run.
  • Increasing willingness of Governments to introduce private capital to infrastructure finance through PPPs, concessions, and privatisations. Turkey expected to enter a power deficit period in the medium term; large-scale generation and distribution assets being privatised.
  • Typically large size of equity requirements in energy and infrastructure projects and relatively limited investment capital available locally.
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    Lack of capital with sector expertise:

     

  • Local investors and developers willing to partner with financial investors that could bring in additional equity, expertise, industry network and help raise debt on a limited-recourse basis for projects or acquisitions.
  • Growing demand by western strategic investors (which have saturated home markets) to invest in fast-growing emerging markets, which in turn generates attractive exit opportunities for financial investors.
  • Increasing number of local developers and foreign investors seeking credible and sophisticated third-party advisors or minority investors to help create and structure partnerships.
  • Limited expertise in the target sectors and shortage of world-class standards of advisory and governance in the target region.
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    A unique opportunity to place large-scale capital and access stable long-term returns:

     

  • Relatively limited local sources of equity and long-term debt.
  • Rapid accumulation of capital in resource-rich economies seeking stable, long-term investments in the target region for portfolio diversification.
  • Increasing appetite from financial investors for energy and infrastructure assets which have a low correlation to other asset classes, providing both long-term stable cashflows and early exit opportunities following value build-up.
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