KENYA –International Finance Corporation (IFC) has granted US$25 million to Atlas Tower Kenya, an independent provider of wireless infrastructure, to develop telecoms towers expanding digital access in Kenya.
IFC’s debt financing package, supported by co-financing from institutional investors through IFC’s Managed Co-Lending Portfolio Program (MCPP), will provide Atlas Tower Kenya with the capital it needs to develop and install the towers over the next two to three years.
The project is aimed at expanding the coverage of online and mobile phone services across underserved areas of Kenya and reducing costs for consumers.
The project is expected to support the building of up to 450 independent telecommunication towers in the country.
In one of the first emerging market transactions by a development finance institution or commercial bank, the debt facility will employ Term SOFR (Secured Overnight Financing Rate), which replaces the USD LIBOR as the benchmark reference rate.
In December 2021, IFC approved Term SOFR to replace LIBOR, the London Interbank Offered Rate, to ensure a smooth transition for new offerings in light of the U.S. regulator’s direction for all lending from January 1, 2022.
Mobile network operators and other digital service providers will be able to lease space on the new towers, helping them expand coverage and reduce operating costs and costs for consumers.
Less than half of the roughly 8,000 telecommunication towers in Kenya are owned by independent operators.
“We are happy to have IFC as our valuable partner in Kenya. Together, we will improve the quality, safety, and accessibility of communication infrastructure in the country,” said Nathan Foster, Founder & CEO of Atlas Tower Group.
“We recently added our 200th tower in Kenya and now can look forward to IFC helping us to the 500th tower.”
Telecommunications tower sharing is an emerging area for Kenya, and IFC believes the development planned by Atlas Tower will contribute to growing access to digital networks at a low cost.
IFC is a leading supporter of Africa’s digital development, investing to increase access to digital infrastructures such as broadband networks and data centers, and funding start-ups, entrepreneurs, and skills development across the continent.
IFC’s investment in Atlas Tower Kenya also reflects the institution’s strategy to increase competition in the digital sector globally and reduce costs for consumers.