JSE-listed construction and engineering group Aveng has set aside R1.3-billion in financial resources to enable it to participate in emerging transport, energy, water and accommodation concessions opportunities in Africa and Australasia.

The group, which reported a 30% rise in revenue to R25-billion and a 43% increase in headline earnings to R397-million for the six months to December 31, 2012, currently has net cash of R3.3-billion and an order backlog of R40-billion.

CEO Roger Jardine says the company is aiming to take up minority equity positions in projects that are able to deliver a minimum equity return of 18%, while also creating spill-over work opportunities for its engineering, construction and manufacturing units.

“We are looking to build a diverse project portfolio in line with our sector strategy and our ability to leverage our balance sheet for profitable growth is quite immense,” he outlines.

CFO Kobus Verster stresses that the decision to take only minority equity positions means that the R1.3-billion could give it “a reasonable runway” to participate in a broad portfolio of projects.

The group already operates toll roads and is in the process of developing a rapid transit public-private partnership (PPP) project in the Gold Coast of Australia, as well as an accommodation PPP for South Africa’s Department of Environmental Affairs.

Aveng Grinaker-LTA has been named as the preferred bidder for a decongestion road project in Mauritius, which “runs into several billions of rands”. The project involves both a concessions component and a design-and-construct element and should reach financial closure before the end of 2013.

It is also participating in two renewable-energy projects under South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and it has submitted a bid for the Transmission Gully road PPP, in New Zealand.

Jardine praised the way in which the REIPPPP had been managed, arguing that it could become a model for the future leveraging of private sector balance sheets to deliver public infrastructure.

“These megabillion-rand projects require strong technical people in the back office to scope and adjudicate – and this is what happened with renewable energy,” he said.