Bloomberg Markets
Ghana Power Station Image Credit: Bloomberg Markets
Ghana Power Station Image Credit: Bloomberg Markets

For Really Uncorrelated Returns, Try Investing In A Ghana Power Station

Investing in African power plants can boost returns, provide a hedge against global market shocks, and help lift people out of poverty, says Jerome Booth.

James Crombie

The chairman of London-based New Sparta Asset Management Ltd. takes it a step further: For investors, not having such assets in a portfolio is “irresponsible,” he says.

Booth has strong opinions about emerging markets. An economist, he was part of the management group that in 1999 established Ashmore Group Plc, an emerging-markets-focused investment manager in London that now oversees $92 billion. After retiring from Ashmore in 2013, Booth started New Sparta, wrote Emerging Markets in an Upside Down World: Challenging Perceptions in Asset Allocation and Investment (Wiley, 2014), and was appointed chairman of Anglia Ruskin University’s board of governors.

He personally invested about $10 million in developing a power plant in Northern Ghana, alongside Erling Lorentzen, founder of Brazilian forest products producer Aracruz Celulose SA. That project has spent $70 million on a forest of eucalyptus trees to provide biomass fuel and now awaits a so-called put and call option agreement, which is economically equivalent to a government guarantee, according to Booth. Once that’s in hand, the plant’s owners plan to raise up to $350 million in financing, mostly debt, to get to production.

JAMES CROMBIE: Why are you investing in African power?

JEROME BOOTH: Energy is the biggest bottleneck to economic development in Africa. Investing in emerging markets—including in illiquid things like power

Continue Reading with Magzter GOLD Subscription

Log in if you're already a subscriber

Continue Reading This Article For FREE By Downloading The Magzter App

Magzter for iOS Magzter for Android

To continue reading on the website, Click here

Get unlimited access to thousands of curated premium story and 5,000+ magazines

Try FREE for 7 days or

Download the Magzter App and
Try FREE for 30 days

More from Bloomberg Markets