CDC Group commits over $50 million funding to boost rural connectivity across sub-Saharan Africa
CDC Group, the UK’s development finance institution (DFI) and impact investor, has announced commitments totalling US$50.9 million to expand digital infrastructure, boost rural connectivity and accelerate digital technology access for rural and underserved communities across sub-Saharan Africa.
The capital will support the continued growth of the ICT sector in the continent, helping to boost development of necessary infrastructure and providing rural and underserved communities with access to affordable mobile connectivity.
The first investment is a $40 million commitment to Convergence Partners Digital Infrastructure Fund (CPDIF), managed by Convergence Partners – a specialist Africa-focused ICT fund manager – supporting a first close together with other DFI and financial investors of $120 million and a target fund size of $250 million.
CDC’s funding will enable CPDIF to invest in digital infrastructure and the overlays needed to improve connectivity and access to ICT across the continent. In addition to investments in data centres, fibre networks, towers, software and wireless networks, the funding will support CPDIF to invest in fourth industrial revolution technologies such as 5G, cloud, Internet of Things and Artificial Intelligence – helping to stimulate innovation that will help bridge Africa’s digital divide.
CDC’s second investment is a $10.9 million equity commitment to a consortium led by Metier (a mid-cap fund manager in sub-Saharan Africa), alongside fellow DFIs DEG, Proparco and other leading financial institutions investing just under US$40m in Africa Mobile Networks (AMN) – the 5th-largest independent tower company operating in Africa.
The growth equity will enable the expansion of AMN’s mobile network infrastructure and rural connectivity, from the current level of circa 2,000 towers across 10 countries, to 5,000 towers across more than 15 countries by 2023. This increased delivery of 2G, 3G and 4G services will substantially increase economic opportunities in sub-Saharan Africa. Expansion of digital connectivity to people living in remote villages and settlements will improve access to information and facilitate inclusive development that will have generational impact for such communities.
The World Bank estimates that approximately 45% of Africa’s population is further than 10 km from fibre network infrastructure, higher than any other continent. Delivering scalable solutions that enables lasting digital infrastructure will improve access and ultimately lower costs of services for end-users.
CDC’s investments in CPDIF and AMN further demonstrates the DFI’s commitment to making investments that help narrow the connectivity gap across its markets. CDC is helping to scale access to affordable and high-quality internet with its $220 million investment in Liquid Telecom, and its $12 million investment in Worldlink is helping to accelerate internet connectivity in Nepal.
Clarisa De Franco, Managing Director & Head of Private Equity Funds, CDC Group, said: “Digital inclusion provides an unparalleled opportunity for African countries. Tapping into these opportunities require long-term investments and the right partnerships to help develop innovative, sustainable and inclusive solutions to bridging the continent’s connectivity gap. We are proud to be investing our patient and flexible capital in two partners that align with our goals to help improve digital infrastructure. We are thrilled to back CPDIF and AMN with investments that will support Africa’s digital transformation, connect millions of people across the continent, facilitate access to quality education and healthcare, enhance digital skills, and promote financial inclusion.”