DAI makes project finance acquisition

DAI has made a third acquisition to expand its growing development finance business. The employee-owned organization, based in Maryland, United States, has more than 5,000 staffers working in 80 countries across five continents, making it one of the largest implementers working in the sector. It set up DAI Capital in 2019 to improve the amount of private capital flowing into development. DAI Capital has a turnover of around $10 million a year, its CEO, Gavin Wilson, told Devex. It already has one business — Magister — which helps companies in low- and middle-income countries raise new institutional capital, and also advises on mergers or sales of companies. Another, MicroVest, works with investors who are keen to put more money into finance in emerging markets via microfinance. Now it has added a third, in a new, but connected area — helping development projects develop a plan and make connections with investors in order to attract finance. To get the expertise necessary, DAI bought in projects and hired eight staff from Alinea Capital, an Australian company, including Alinea’s co-owners. Wilson said he expects that in the next year, the new hires will add around 10% to existing revenue, but he was ambitious to see this number rise considerably above that. “Project finance is increasingly important in the developing world and is an area where there are, in my view, a shortage of players who really know what they're doing and have the staying power and expertise to get lots of projects financed,” he said. Typically, he said, projects in low- and middle-income countries took a long time, and that it’s key to get involved at the project development phase and show “staying power” throughout the whole project. “Our objective here is to be involved in the full cycle of project development, bringing projects to what’s often called bankability, and then finding and arranging the financing for the project, so that it actually happens,” he said. He said that typical projects might be hospitals, bridges, or renewable energy. Alinea has tended until now to have particular expertise in health projects, he said, but he expected that the increased resources offered by DAI would allow the team to take on more and bigger opportunities.