US development finance institution Overseas Private Investment Corporation (Opic) and mobile telecommunications operator Africell have signed a financing deal that will see $100-million injected into the development of the telecommunications sector in Africa.
The growth capital facility, one of Opic’s first commitments under the Connect Africa initiative, will enable Africell to finance the upgrading and expansion of its mobile networks in Uganda, the Democratic Republic of the Congo, Sierra Leone and Gambia.
“This investment is part of our larger commitment through Connect Africa,” said Opic Africa MD Worku Gachou on Friday at the official signing of the commitment letter with Africell chief investment officer Ian Paterson.
Connect Africa, launched in July, aims to invest $1-billion over three years into projects around information and communications technology, value chains that connect producers of raw materials to end-users and transportation and logistics, including roads, railways, ports and airports.
The initiative forms part of Opic’s commitment to deepen ties between Africa and the world through investments in physical infrastructure, technology and value chains.
“We will be looking to invest the proceeds to expand our networks, to develop new products and services and really using the platform of customers that we have today – more than 12-million – and try to layer on additional value-added services to them that empower their communities and their ability to use technology and take advantage of [technology] developments,” Paterson added.
Africell’s business strategy is focused on providing affordable mobile network access to low-income sub-Saharan African countries, with the expansion of the availability and quality of affordable mobile telephone and Internet services expected to deliver a high developmental impact.
“We are very pleased to have reached an agreement with Opic to work together in what is hopefully a fruitful partnership,” Paterson said.
The transaction, which will become fully activated within the next few months, was led and arranged by London-based Lintel Capital UK Advisors.