Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Guantum Dani, the Indian infrastructure billionaire, is making waves in
Speaker 2: East Africa and not everyone's happy. But even as a
Speaker 2: court suspends the Donny's plan to take over Kenya's main airport,
Speaker 2: he's doing more deals with the Kenyan government and uther
Speaker 2: governments across East Africa.
Speaker 3: Their Danni Group are investing in the transmission line, their
Speaker 3: money ninety five billion. We would have otherwise gone to
Speaker 3: borrow that money, but the people of Kenya and it
Speaker 3: is important for us as a nation to appreciate that
Speaker 3: a partnership between public and a private sector gives us
Speaker 3: a win win outcome.
Speaker 2: On this week's Next Africa Podcast, we'll ask who is Guantumadoni.
Speaker 2: Is he bringing much needed private sector investment to East
Speaker 2: Africa or are Kenyan's right to be worried that their
Speaker 2: assets are being sold off too cheaply. I'm Jennifer's Abasaja
Speaker 2: and this is the Next Africa Podcast, bringing you one
Speaker 2: story each week from the continent driving the future of
Speaker 2: global growth with the context only Bloomberg can provide. Joining
Speaker 2: me to discuss Guantamadanni is pr Sanjay Bloomberg senior reporter
Speaker 2: based in Mumbai and also Helen Yambura, our East Africa
Speaker 2: bureau chief. Thank you both so much for being here
Speaker 2: and helping us unpack this story.
Speaker 1: Sanjay, can we just start with you.
Speaker 2: Can you give us a bit of background on A
Speaker 2: Donnie for people who maybe haven't heard much from him.
Speaker 2: I mean, how did he amass the billions that he
Speaker 2: has at this point?
Speaker 4: But A Donnie Group is a watch conglomerate with the
Speaker 4: listed and unlisted subsidies doing business and everything from Paul
Speaker 4: to power, with a reach spanning from India to Africa
Speaker 4: and Australia. Over three decades, billionaire tycoon ga Adhani built
Speaker 4: a vast infrastructure network across India that's become indispensable for
Speaker 4: both local business and maybe foreign companies like Apple, Amazon, etc.
Speaker 4: After dropping out of college, Adhani tried this like in
Speaker 4: Mumbai's diamond industry in early nineteen eighties. He soon moved
Speaker 4: back to his home state of Gujarat to run his
Speaker 4: brother's plastic business before setting up in nineteen eighty eight
Speaker 4: Adani Enterprises Limited, the group's flagship commodity trader. A decade later,
Speaker 4: he started to operate the Port of Mundra, which is
Speaker 4: located on the coast of arabianc eventually building India's largest
Speaker 4: private sector port operator, and it operates airports, It operates ports,
Speaker 4: it has transmission lines, it has Glean energy farm which
Speaker 4: is ready. That is everything everything.
Speaker 2: So maybe then let's bring in Helen into the conversation. Helen,
Speaker 2: and let's talk about Kenya, because this is really why
Speaker 2: we are talking about Donnie in our Next Africa podcast
Speaker 2: and what he's been doing specifically in East Africa. Helen,
Speaker 2: can you just give us some context as to the
Speaker 2: investments that a Donnie has been looking at in Kenya,
Speaker 2: maybe specifically.
Speaker 5: So what we've heard is two deals. The first deal
Speaker 5: is in transmission lines, so different subsidiaries in the way
Speaker 5: the conglomerates have been looking at different sectors. But earlier
Speaker 5: this month, the Kenyan Energy Ministry announced that the government
Speaker 5: has center deal for transmission lines for about seven thirty
Speaker 5: six million dollars. Danny, the subsidiary that's looking to do this,
Speaker 5: wants to finance, construct and to perate those lines for
Speaker 5: three decades. We've seen that the Kenyan High Court has
Speaker 5: suspended that deal and similarly it's suspended another deal in
Speaker 5: which another yet another subsidiary over Danny wants to lease
Speaker 5: the biggest airport in Kenya, that's a jomokin At Airport
Speaker 5: in the capitol, Nairobi. It wants to lease and operate
Speaker 5: that airport for thirty years, so a similar length of
Speaker 5: time as the transmission lines that it wants to put up.
Speaker 5: It initiated a private speed for the airport. So those
Speaker 5: are the two deals that have been confirmed in Kenya,
Speaker 5: but it's likely that it's also looking at other.
Speaker 2: Sectors other places too, Helen, right, I mean, Kenya isn't
Speaker 2: the only place that Dani has been eyeing in terms
Speaker 2: of new deals.
Speaker 5: The deals in Kenya have been a bit controversial, but
Speaker 5: in neighboring t and Zania, we've seen at least two deals.
Speaker 5: We've seen the Adani's he talks to invest about nine
Speaker 5: hundred million dollars in power transmission lines, so something similar
Speaker 5: to Kenya. It's also acquired shareholding in Tanzania International Container
Speaker 5: Terminal Services in a joint venture together with Abu Dhabi Ports,
Speaker 5: so that's the biggest container company in Tanzania. And separately,
Speaker 5: it's one right to operate the biggest container terminal at
Speaker 5: the dress Lamport, which handles about eighty percent of Tanzania's
Speaker 5: container volume. All these deals Tanzania and Kenya have been
Speaker 5: announced in the past one year. So in just a
Speaker 5: few months we've seen about five separate deals been announced
Speaker 5: in East Africa.
Speaker 2: Yeah, so very clearly targeting East Africa, Sanjai, I mean,
Speaker 2: why is Adani focusing his efforts then on the region?
Speaker 2: I mean what do you make of this, especially as
Speaker 2: you paint a picture for us about what he has
Speaker 2: been doing in his own home country.
Speaker 1: I mean why East Africa now, So it's a very
Speaker 1: interesting question.
Speaker 4: So this is the world which is looking beyond China
Speaker 4: or China plus one. It is indeed a kind of
Speaker 4: a Chinese styled expansion by Adani here a conglomerate. Adani
Speaker 4: Group has touched all walks of lives in India and
Speaker 4: as a natural progression, it would definitely look beyond India.
Speaker 1: Of course, his heart is where home is.
Speaker 4: He's focusing more in intensifying investments in India, but he
Speaker 4: would also look beyond India, and it is indeed a
Speaker 4: Chinese styled expansion by the conglomerate. Those potential ventures include Bangladesh,
Speaker 4: East Africa, Southeast Asian nations including Tanzania, Vietnam, Sri Lanka,
Speaker 4: and Israel with the Haifa Port Israel, Bhutan, et cetera.
Speaker 4: So East African nations, what the thinking of the conglomerate
Speaker 4: is like the air to have type where there is
Speaker 4: a two way trade between India and those nations and
Speaker 4: they claim that there's historic trade links there between East
Speaker 4: African nations and India.
Speaker 2: Stick with us, Sanjay and Helen. When we come back,
Speaker 2: we're going to dig into more of these investments by
Speaker 2: Adanni outside of India and even some of the controversies
Speaker 2: around them, as Helen pointed out.
Speaker 1: So we'll be right back.
Speaker 2: So welcome back today on the podcast, we're looking into
Speaker 2: Indian billionaire Guantamadani, whose investments in East Africa are coming
Speaker 2: under scrutiny but also getting quite a bit of attention.
Speaker 2: We have PR Sanjay and also Helen Yambura joining us. Helen,
Speaker 2: let's just go back to you and talk about what's
Speaker 2: been happening in particular in Kenya.
Speaker 1: You talked about this a bit.
Speaker 2: There was a court that did suspend the deal to
Speaker 2: buy the biggest airport in Yeah, but before that there
Speaker 2: were also protests and strikes around this initial deal. I mean,
Speaker 2: why was there so much concern and criticism about a
Speaker 2: Danny trying to make this deal happen.
Speaker 5: This new contention that Kenya needs the private capital for
Speaker 5: the really big infrastructure project. Kenyan is in dire straits
Speaker 5: in terms of its public finances. So yeah, everybody agrees
Speaker 5: that Kenya does need, you know, foreign direct investment from
Speaker 5: companies with deep pockets. But the reason that this proposal
Speaker 5: has met with so much resistance is the opacity that
Speaker 5: surrounds it. We only got to know this deal through
Speaker 5: a whistle blower who reached out to Kenyan lawmaker a
Speaker 5: Senate term. Also, the terms of the deals are a
Speaker 5: bit questionable. According to Kenyan's at the end of the
Speaker 5: thirty year concession, a Danny is going to holders take
Speaker 5: in it. Even the amount of one point eight billion
Speaker 5: dollars investment seems a little too little for the type
Speaker 5: of investment that's needed to keep the Kenyan Airport as
Speaker 5: a leader in the region. We have Ethiopia and Ruanda
Speaker 5: investing double almost triple that amount to create hubs for themselves.
Speaker 5: That's the main fear that I'm hearing with Kenyons that
Speaker 5: you know, a done will come in and there'll be
Speaker 5: job losses, and that's what led to the strike by
Speaker 5: a Vision workers one day. They disrupted operations in what's
Speaker 5: a really key hub for the region.
Speaker 2: Sandrea is mentioning Chinese investment in the region, and I
Speaker 2: remember in twenty twenty two during the Kenyon election just
Speaker 2: talking about you know, Chinese investment into different infrastructure. So
Speaker 2: potentially that is where some of the skepticism comes from.
Speaker 4: You know.
Speaker 2: I bring that election up because I wanted to know
Speaker 2: President Ruto sort of where he falls in this, because
Speaker 2: he clearly cannot ignore the issues that are coming up
Speaker 2: around the steal.
Speaker 1: I mean, what has he been saying.
Speaker 5: So President Trutu says that he needs all the money
Speaker 5: that he can get for big infrastructure projects, capital intensive projects,
Speaker 5: but his hands are tied in that he does not
Speaker 5: have the weigle room to borrow some more. So whatever
Speaker 5: development projects that he wants to see role that will
Speaker 5: have to come through private investment or public private partnerships.
Speaker 5: So he is pushing for all the money that he
Speaker 5: can get to do all those projects, whether it's electricity transmission,
Speaker 5: whether it's roads, realis and so on. He defended the
Speaker 5: transmission deal with the DANEY, saying that it will help
Speaker 5: lower the cost of power in the country. Is defended
Speaker 5: private investment in poler generation, in geothermal and root construction
Speaker 5: is so on and Sanja.
Speaker 2: What are the concerns about Donnie's businesses Helen speaking from
Speaker 2: the perspective within Kenya, but there's suggestions that the group
Speaker 2: is also facing scrutiny from regulators globally.
Speaker 4: A DANI has always faced similar challenges in its history.
Speaker 4: When it went to Australia with Carmichael Mine, the Green
Speaker 4: Group was up and arms and they protested to the
Speaker 4: nail and they still remained firm in Australia. And now
Speaker 4: when they have investment, a huge investment in Sri Lanka
Speaker 4: and when there's a political change, regime change, they are
Speaker 4: also facing similarities with Sri Lanka now Kenny I, so
Speaker 4: they are facing similar protesting Kenny as well. So the
Speaker 4: main concern would be after Hindenburgk's research allegation January twenty
Speaker 4: twenty three, they were trying to firmly coming back to
Speaker 4: their aggressive expansion mode and then immediately they are facing
Speaker 4: similar protests from Sri Lanka Kenya and even in the
Speaker 4: case of Bangladesh because they were facing some issues with
Speaker 4: getting funds because there's a change in the political regime.
Speaker 4: So the immediate concern of Adani as a conglomerate would
Speaker 4: be how to cool off, how to mitigate, how to
Speaker 4: tie over the geopolitical crisis at this point of time.
Speaker 2: So then sandre just on that, I mean, do any
Speaker 2: of those other situations then potentially point to how they
Speaker 2: will handle what's happening in Kenya.
Speaker 4: So they are on a wait and watch mode because
Speaker 4: as Helen pointed out, Kenya indeed need foreign investments and Adani,
Speaker 4: which has been acclaimed for building airport's, ports and infrastructure projects,
Speaker 4: they are very keen to have that kind of links with.
Speaker 1: Any country for that matter.
Speaker 4: The idea for Radan is to make India as a
Speaker 4: maritime hub, and they are targeting countries that are high
Speaker 4: on manufacturing or high on population which will lead to
Speaker 4: high consumption. So Kenya or Tanzania both are very critical
Speaker 4: to their scheme of things, so they would take a
Speaker 4: pause and they would wait and watch. They will be
Speaker 4: adopting a weight and watch mode because it's so critical
Speaker 4: to their global expansion.
Speaker 1: Strategy.
Speaker 2: So there's no signs that he's going to be put
Speaker 2: off by any of the resistance at this point in time.
Speaker 5: I don't think so. He is looking to get a
Speaker 5: foothold on the continent and I think he's going to
Speaker 5: succeed in doing it.
Speaker 2: Sanjay Helen, thank you both so much for joining us,
Speaker 2: and you can read all of our coverage of the
Speaker 2: Adoni Group across Bloomberg platforms. Here's a few other stories
Speaker 2: we're watching in the region this week.
Speaker 1: South Africa's coalition.
Speaker 2: Government has delivered its first budget, showing improved growth forecast.
Speaker 2: This is the first budget since the new business friendly
Speaker 2: coalition took office back in June. Elections in May stripped
Speaker 2: the anc of its parliamentary majority, or saying President Rama
Speaker 2: Posa to find coalition partners and Botswana's governing party is
Speaker 2: set to extend its almost six decade rule of the
Speaker 2: diamond rich Southern African nation after Wednesday's elections, securing a
Speaker 2: second five year term for President Massisi Messisi's Botswana Democratic
Speaker 2: Party has been in power since independence from Britain in
Speaker 2: nineteen sixty six and currently has thirty eight seats in
Speaker 2: the legislature.
Speaker 1: A majority.
Speaker 2: The President says it's certain to maintain. And you can
Speaker 2: follow these stories across Bloomberg, including the Next Africa newsletter.
Speaker 2: Will put a link to that in the show notes.
Speaker 2: This program was produced by Adrian Bradley. Don't forget to
Speaker 2: follow and review this show wherever you usually get your podcasts.
Speaker 2: I'm Jennifer's Abastagia. Thanks as always for listening.