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Venture capital deals in Africa declined by $1.4 billion in first 6 months of 2023

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A recent report by financial thinktank, African Private Capital Association (AVCA) revealed that the continent recorded a $1.4 billion decline in venture capital deals in the first six months of 2023.

Throughout the venture ecosystem of the continent, just 263 VC deals were completed, allocating a total of $2.1 billion in cash to 258 different companies. This demonstrates that every investment stage had severe reductions in both volume and value.

Comparing this to the $3.5 billion raised over the same time period last year, there has been a 40% decrease in both volume and value.

Venture capital (VC) is a sort of private equity and financing provided by investors to start-up enterprises and small businesses with the potential for long-term growth.

The research shows that investors are now taking a more prudent approach to investing in Africa. In addition, only five mega-deals generating slightly over $1 billion were made between January and June, suggesting that VC investors were wary of large fundraising rounds.

In contrast to the almost 50% loss experienced in all other regions, Southern Africa showed resiliency during the first half of 2023, weathering the storm with a relatively milder 9% decline in deal value.

On the other side, East Africa saw the greatest drop in deal value (76%) in H1 2023, a stark contrast to the outstanding results seen in H1 2022. Similar patterns were seen in West Africa as well, where the value of deals fell by 59%.

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Uganda discusses power line to South Sudan with China’s Sinohydro

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According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.

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Uganda considers nuclear energy to meet increased electricity demand

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Uganda’s Ministry of Energy and Mineral Development announced on Tuesday that it was collaborating with the International Atomic Energy Agency (IAEA) to develop nuclear energy in the country as power demand rises.

Irene Batebe, permanent secretary of the ministry, stated that the government, with the assistance of the IAEA, is investigating and evaluating uranium deposits to ensure a sustainable supply of nuclear fuel for the projected nuclear power plants and research reactors.

“Uranium is the most widely used nuclear fuel material in nuclear power plants and research reactors and is required for Uganda’s nuclear power program.

“The planned nuclear power capacity will require about 4,000 tons of Uranium annually when fully operational. Thus, there is a need for sustainable sources of uranium,” she said at the opening of the nine-day meeting with the experts from the IAEA.

Batebe stated that the government is modifying the Atomic Energy Act of 2008 to tighten the legal framework for the exploration, mining, and processing of nuclear fuel reserves. She stated that even if completely exploited, the country’s electricity generation capacity from hydro, biomass, geothermal, and peat will fall short of Uganda Vision 2040 ambitions.

“To meet our development targets, nuclear energy among other sources must be integrated in the electricity generation mix,” she said.

The Cabinet approved the Energy Policy for Uganda, 2023 in April 2023, which envisions the long-term development of 52,481 MW of generation capacity to meet future demand, with nuclear power accounting for 24,000 MW.

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