Morgan Stanley pushes into Africa, Middle East

Morgan Stanley Infrastructure has teamed with Egyptian construction firm Orascom to raise what could be a multibillion investment vehicle.

Morgan Stanley Infrastructure and Egypt’s Orascom Construction Industries will commit several hundred million dollars to a joint-venture that will invest in infrastructure across the Middle East and Africa.

Nassef Sawiris, Orascom’s chief executive, told Reuters that the vehicle will start with commitments of several hundred million dollars , but did not disclose an exact number. He added that amount could reach into the billions by bringing in other partners or through leveraging the fund. A spokesman from Morgan Stanley declined to comment on the size of the vehicle.

The companies will be equal partners in the joint-venture, which aims to capitalise on the “higher investment rates in infrastructure [necessary] to sustain economic growth in the Middle East and Africa”, Sadek Wahba, global head of Morgan Stanley Infrastructure, said in a statement Tuesday.

The venture will target investments in power generation, port construction, waste water and other sectors. Egypt, Algeria and the Gulf Arab countries are likely to offer the best deals, Sawiris added.

Morgan Stanley Infrastructure manages $4 billion in equity and invests in infrastructure assets across the world. Its latest purchase was Spanish firm’s Gas Natural’s Madrid gas distribution network, for €800 million.

Orascom Construction is based in Cairo and is Egypt’s biggest listed construction company. As of September 2009, infrastructure investments comprised 60 percent of its $7.2 billion order backlog. The firm targets energy-related infrastructure as well as transportation projects, such as roads, airports, ports and railways.