Information on the Target

Delta Irrigation, founded in 2003 in Senegal, specializes in the design and implementation of hydraulic systems, primarily in the agricultural sector and water treatment. I&P has supported the company's diversification strategy, which now extends its operations to Senegal and Ivory Coast. The IPAE 1 fund has signed an agreement to sell the majority of its shares to two strategic partners: French irrigation equipment supplier Kulker and Senegalese company Bernegal, which is part of the Agrifos group and operates within the agricultural sector. Additionally, part of the shares was sold to the Director of Delta Irrigation in Côte d’Ivoire.

CONERGIES is a leading group in climate engineering, refrigeration, and solar solutions, with subsidiaries in Mali and Côte d’Ivoire. Following its initial commitment, I&P has exited the company after six years during which the team assisted in structuring the business, rebranding, and launching its operations in Côte d’Ivoire. The exit was executed with the EDF group, which will partner with CONERGIES to deploy innovative energy efficiency solutions in West Africa.

Industry Overview in the Target's Country

The agricultural sector in Senegal and Côte d'Ivoire plays a crucial role in the economy, being a significant source of employment and government revenue. Both countries are positioned favorably within the African agricultural landscape, given their arable land and conducive climate for a variety of crops. There has been a rising trend toward modernization and efficiency in agriculture, with technologies such as irrigation systems becoming increasingly vital for maximizing yield and sustainability.

Water resources management is a growing concern in both nations due to climate change, population growth, and increasing agricultural demands. Investments in irrigation technologies and systems are therefore essential not only for food security but also for improving the resilience of agricultural practices against climate variability.

The renewable energy sector, particularly solar power solutions, is emerging as a significant player in both countries. With ambitious governmental goals aimed at increasing energy access and sustainability, solar energy solutions are quickly gaining traction. Companies specialized in energy efficiency, such as CONERGIES, are essential for achieving these goals and ensuring sustainable growth in the region.

The collaboration between agriculture and energy sectors presents a unique opportunity for robust economic development, with integrated solutions becoming increasingly valuable. The efforts to modernize agricultural practices through improved water management and energy solutions are expected to drive significant growth and sustainability in both countries.

The Rationale Behind the Deal

The rationale behind these strategic exits is to enable both Delta Irrigation and CONERGIES to leverage the expertise and resources of their new partners, which are aligned with I&P's focus on sustainable investment. By partnering with established entities such as Kulker, Bernegal, and EDF, both companies are expected to reach new growth stages while adhering to the vision and values that I&P champions.

The exits also reflect I&P's commitment to ensuring that its portfolio companies continue to evolve and thrive post-investment. The strategic partnerships are anticipated to provide the necessary support required by these SMEs to enhance operational efficiency and expand their market presence.

Information About the Investor

Investisseurs & Partenaires (I&P) is an impact-focused investment firm established to support SMEs across sub-Saharan Africa. The IPAE 1 fund, which has a capital of €54 million, has actively invested in and nurtured a diverse array of African SMEs since its inception in 2012. The firm's strategic approach combines financial support with a focus on sustainable practices, ensuring that portfolio companies align with ecological and societal values.

With a robust portfolio that includes 29 SMEs across twelve countries, I&P emphasizes providing tailored support that addresses the unique challenges faced by African entrepreneurs. Their investments are geared towards creating scalable and impactful businesses within the region, particularly in sectors like agro-industry, health, and renewable energy.

View of Dealert

In evaluating the implications of these exits for both Delta Irrigation and CONERGIES, it is important to consider the strategic alignment brought about by their new partners. The entry of reputable players such as Kulker and EDF represents not only a validation of the companies’ business models but also an opportunity for accelerated growth through access to resources and networks that may have previously been unavailable.

Furthermore, the emphasis on sustainability and adherence to ESG principles suggests that these partnerships are likely to yield positive social and environmental impacts. The potential for further innovation in agricultural practices and energy solutions aligns with global trends towards sustainability, which should enhance the companies' reputations and market competitiveness.

Considering the solid foundational work completed by I&P over the past years, it appears that the strategic progression into new partnerships could help both companies scale effectively. Therefore, these exits can be viewed as successful outcomes for I&P, highlighting the model's viability for future SMEs in the region.

Overall, I&P's strategic exits from Delta Irrigation and CONERGIES may be regarded as prudent investments that align with both financial objectives and societal impacts, thereby enhancing growth prospects while ensuring the sustainability of operations.

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