The Emerging Africa Infrastructure Fund (EAIF/the Fund), managed by Ninety One, has loaned US$40 million over 10 years in a debt package of US$100 million raised by the West Indian Ocean Cable Company (WIOCC). The new finance is part of the company’s corporate development programme. It is forecast to involve capital spending of at least US$379 million across Eastern and Southern Africa. Financial close was achieved on 25th September.
Proparco, the French development finance institution was the transaction’s mandated lead arranger of the debt finance and is lending US$60 million of the US$100 million.
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. Estimated to hold 20% of the African connectivity market, it 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, a Director at EAIF’s managers, Ninety-One, says;
“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 5 years and WIOCC plans to develop vocational IT training for women, in order to further facilitate gender-balance in its workforce.
According to The World Bank, only 22% of the population of Africa has internet access.* 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.
White & Case acted as international legal counsel to the lenders and Analysys Mason advised on market and technical matters.
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