It would seem to require a touching faith in the perfectability of mankind to set up a niche bank specialising in investments in developing African countries against the backdrop of the unravelling of the Kenyan and Zimbabwean states and the unfolding tragedies of Sudan, Chad and the former Zaire.

It would seem downright perverse to do so during a credit crunch that can only see banks and other institutions running scared from challenging or risky investments.

Yet David Suratgar, a much-travelled and very senior British banker and lawyer, has put together the first investment bank, MediCapital, dedicated entirely to that continent. He has also tempted an array of the great and the good in world banking to put their names to the venture.

These include Peter Cooke, former head of banking supervision at the Bank of England, and his colleague at the Bank, Ian Plenderleith. There is also Stanislas Yassukovich, who used to run the Europe, Middle East and Africa operations for Merrill Lynch, and Bernard Asher, former chairman of HSBC Investment Bank.

These are not men who will pick up the phone to anyone, or put their name to any business, let alone one with such obvious potential to damage their reputations, and one backed by a previously obscure Moroccan bank.

But they are all friends of Mr Suratgar, a former senior lawyer at the United Nations, briefly — “not the most exciting time of my life” — and for rather longer at the World Bank. He is the son of an Iranian émigré and “gypsy academic” who taught English literature. His mother was also an academic. One grandfather, a Scottish engineer, travelled the world making mining equipment.

At the World Bank, he spent much of his time unravelling the consequences of the last big wave of investment in Africa, which resulted in the various sovereign debt crises of the early 1980s. At the same time he taught law at the highly regarded Georgetown University in Washington, Bill Clinton's alma mater.

From there, he was invited to join Morgan Grenfell, where he worked on a range of public sector initiatives around the world. “I became Mr Privatisation,” he says. “My colleagues in the corporate finance department were too busy making money to bother about privatisation.”

By the mid-1990s, Morgan Grenfell had been bought by Deutsche Bank and Mr Suratgar became disenchanted with the new style of corporate banking, which emphasised the deal over long-term client relationships.

One Easter weekend found him in Argentina. “The Minister for Privatisation in Morocco rang up and said: 'We have got a real problem here. We've got a privatisation going, we're up against a deadline.' The company being sold was the Banque Marocaine du Commerce Extérieur (BMCE) and the buyer was the Moroccan industrialist Othman Benjelloun. But under the rules as applied by the Government, other banks from outside Morocco had to take part.

“We managed to put together a case for Deutsche Bank to take a position and enable Mr Benjelloun to meet the privatisation criteria,” Mr Suratgar says. “Mr Benjelloun asked me to stay on.”

He resigned from Deutsche in 1998 and stuck with the Moroccan bank, which conceived of the need for an investment bank that would operate in the areas where it already had a retail network, mainly in French-speaking West and Central Africa. This would provide capital for projects while working with businesses rather than governments.

There was one delicate issue. The bank had branches in Paris and Madrid, the capitals of the two countries with which Morocco had the strongest trading links, but the decision was made to locate in London. This would allow it to be regulated by the Financial Services Authority (FSA) and give access to the capital markets and huge skills base here.

The Moroccans had a network of 15 banks across Africa. MediCapital has itself a controlling stake in Bank of Africa, founded by local entrepreneurs in Bamako, Mali, in 1982, which operates across the continent.

Mr Suratgar is understandably enthused about the prospects for the bank, which gained FSA approval in May last year. Africa is, he says, the last undeveloped frontier, with a billion people, 7 to 10 per cent of the world's oil and gas, untapped mineral wealth and a crying need for infrastructure.

Already, MediCapital is involved in the new airport at Dakar, Senegal, and a power station there. The bank is busy on a dozen mandates for equity issues, financing for medium-sized infrastructure projects and is advising private equity firms on potential targets.

At a recent conference in Tunis, Mr Suratgar set out to contractors a dozen such projects that would be amenable to some sort of PFI approach, in that future revenues would support the necessary debt to get them built.

In the new scramble for Africa, he says, the West is in danger of losing out to China, India and Russia. The Chinese, probably the most advanced, have already committed $6billion (£3.1billion) to infrastructure projects.

Yes, but ... Events in Kenya have shown the frightening speed with which apparently stable societies, prime candidates for investment, can degenerate into tribal warfare. A near-civil war has just flared up in francophone Chad.

The pattern is depressingly familiar. A charismatic new leader promises that everything will be different, and yet within years it is back to the usual corruption, nepotism, incompetence, vote-rigging ...

“Sovereign governance is definitely improving,” Mr Suratgar says. World Bank estimates are of annual growth rates of 6 per cent and improving. “That's a pretty good record and that's been achieved with foreign investment and restructuring the old debt problems. There's been a general improvement. Even when people were making rude remarks about Africa, countries like Botswana were models. In Tanzania and Uganda, they have been putting their house in order.”

And Kenya? “There will be flare-ups like that,” he concedes. MediCapital will try to minimise such risks by restricting the spending of any individual project, deal or transaction to no more than $300million. “The main thing is local knowhow and a continuing local presence, and linking with the local business community because they know when there's a problem.

“Local people know they need the investment and they know they need the jobs and there's a more businesslike attitude,” Mr Suratgar insists.

“It's the last frontier. At the frontier, as we saw in the US, there are all sorts of problems that come with possibilities.”

And the credit crunch? The bank is in “pretty good shape”, he says, with access to the necessary lines of credit. Whether there is the appetite among investors, in today's climate, for the sort of schemes that MediCapital will be promoting is another matter. We agree a catch-up in a year or so to assess progress. It could be an interesting year.

CV

Chairman MediCapital Bank

Born: 1938

Educated: Silcoates School, nr Wakefield; New College, Oxford; Columbia University

UN Secretariat 1961-62

World Bank 1964-73

Georgetown Adjunct Professor of Law, 1966-73

Morgan Grenfell 1973-1998

BMCE 1995 to date

Council of Chatham House (Royal Institute of International Affairs) 1996-2006.

Married, two grown-up children

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