AFRICA – Private Infrastructure Development Group (PIDG) company, the Emerging Africa Infrastructure Fund (EAIF) has loaned $40m over 10 years in a debt package of $100m raised by the West Indian Ocean Cable Company (WIOCC).
It is forecast to involve capital spending of at least $379m across Eastern and Southern Africa.
Financial close was achieved on September 25.
WIOCC was founded in 2008 to hold a stake in the EASSy greenfield submarine cable system serving East Africa.
It has grown to become a regional leader in the telecom industry in Africa and is estimated to hold 20% of the African connectivity market and provides end-to-end international connectivity within Africa.
WIOCC offers a fully integrated submarine and terrestrial fibre-optic network around and inside the African continent.
Its network extends to 55,000km of terrestrial fibre interconnecting 550 locations across Africa.
Olivia Carballo, Director at EAIF’s managers, Ninety-One, said “The announcement of EAIF’s support for WIOCC marks the Fund’s third investment in the African telecommunications industry this year. WIOCC’s expansion will stimulate enterprise and strengthen Africa’s digital infrastructure. Growing Africa’s communications infrastructure is vital to its long-term economic development and in assisting recovery from the global downturn caused by Covid-19. WIOCC can play a key role in helping Africa rebuild.”
WIOCC’s business is leasing capacity to large-scale telecommunications operators and from long-term maintenance contracts.
It runs its own network operations centre providing customer support on a 24/7 basis.
The centre has its main base in Nairobi and a backup facility in Johannesburg.
The company says that the new investment will grow its customer base, create a more competitive market and contribute to downward pressure on wholesale and retail prices.
It is expected to support more than 200 direct jobs over the next five years and WIOCC plans to develop vocational IT training for women to further facilitate gender-balance in its workforce.
EAIF’s loan contributes towards achieving two of the most critical Sustainable Development Goals (SDGs); SDG 8 is Decent Work and Economic Growth and SDG 9 is Industry, innovation, and infrastructure.
Both SDGs are fundamental to building more resilient and stable economies.
The Fund helps create the infrastructure framework that is essential to sustained economic stability, business confidence, job creation and poverty reduction and has to date supported 75 completed infrastructure projects across nine sectors in over 20 African countries.
As of the end of 2018 the Fund had invested US$20.082 billion.
It raises its debt capital from public and private sources, including Allianz, the global insurance and financial services company; Standard Chartered Bank; the African Development Bank; the German development finance institution, KFW and FMO, the Dutch development bank.
The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty.
PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity, and impact.
PIDG TA can provide technical assistance and capital grants to the PIDG companies to meet a range of needs associated with an infrastructure project’s life cycle.
PIDG TA can also provide up-front viability gap funding grants to support PIDG projects that require concessional funding to make a project with strong development impact financeable.