- The Emerging Africa Infrastructure Fund announced a $39 million to $125 million commitment toward Sonatel’s expansion and digital transformation plan in Senegal
- Sonatel is a leading West African telecommunications carrier with the largest network in Senegal
- The Group has developed one of Africa’s most extensive telecommunications networks and provides global telecommunications solutions in Senegal, Mali, Guinea, Sierra Leone, and Guinea Bissau
The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, has announced a commitment of XOF 23.5 billion (app. $39 million) to a XOF 75 billion (app. $125 million) receivables-backed bond issued by securitisation vehicle Fonds Commun de Titrisation de Créance (FCTC), to support Sonatel’s expansion, modernisation and digital transformation plan in Senegal, and beyond.
Sonatal is a leading West African telecommunications carrier with the largest network in Senegal.
The group has developed one of Africa’s most extensive telecommunications networks and provides global telecommunications solutions in fixed and mobile telephony, mobile banking, television and internet services for individuals and businesses operating in Senegal, Mali, Guinea, Sierra Leone, and Guinea Bissau.
Proceeds from the bond will diversify Sonatel’s funding sources and be broken into two “cells” – the first of which will be XOF 60 billion (app. $100 million), in which EAIF will invest.
The provision of finance unlocks fresh capital to boost the company’s network and improve its technology and equipment – supporting the deployment of digital infrastructure, including subsea international cables, fibre to the home, cloud, new towers powered by hybrid and solar solutions and the roll-out of 5G across key markets.
Sonatel’s commitment to expanding access to last-mile connections in new homes unlocks Africa’s disruptive potential – enabling digital access in areas underserved, in line with the PIDG ambition to achieve the United Nations Sustainable Development Goal 9 on Industry, Innovation and Infrastructure.
EAIF will act as an anchor investor alongside the International Finance Corporation (IFC), building on the Fund’s anchoring role in Sonatel’s oversubscribed bond issuance in 2020, where the group raised XOF 100 billion to extend and enlarge its 4G + network in urban and rural areas and to upgrade service platforms.
Fulfilling a similar role in West Africa’s first-ever asset-backed security, the Fund and the IFC leverage their convening power and derisking abilities to mobilise private capital from local and regional investors through the innovative financing instrument, with Invictus Capital acting as arranger in the transaction.
The new bond issuance’s AAA rating enables Sonatel to fund from its balance sheet and encourages similar corporate issuances that stimulate the flow of international and domestic capital to pioneering African businesses.
Commenting on the transaction,Folatomi Fayemi, Investment Specialist at Ninety One, fund manager of the Emerging Africa Infrastructure Fund, said:
“Sonatel is at the forefront of an exciting movement driving digital transformation and expanding connectivity where needed. Once again, we are proud to support Sonatel’s growth ambitions, enabled through capital markets innovation that unites international and local finance. This transaction provides a replicable and scalable model to stimulate economic growth and advance digital technologies, which supports efficiency, digital access and productivity across the African continent.”
Also read: Africa50 Infrastructure Acceleration Fund Achieves First Close, Secures $222.5m
Africa50 Infrastructure Acceleration Fund Achieves First Close, Secures $222.5m
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