Deutsche Bank has signed an international syndicated loan facility with African telecoms group Africell Holding Limited to finance the development and expansion of the group in the Democratic Republic of Congo (DRC) and Uganda.31 Jul 2015
Deutsche Bank said it was appointed as the initial mandated lead arranger, book runner and facility agent for the $150 million financing, which is supported by the World Bank Group’s International Finance Corporation (IFC).
The IFC said it had invested $35m as part of the loan facility, which it said would also “support the expansion and upgrade of mobile networks in the Gambia and Sierra Leone.
Other investors supporting the loan facility include South Africa’s state-owned Public Investment Corporation SOC, acting on behalf of the government employees’ pension fund, Lebanon’s Banque Libano Francaise and EcoBank in the DRC.
The head of IFC’s Africa and Latin American TMT group Anikó Szigetvári said: “In developing countries, access to telecommunications can help boost productivity, improve the delivery of basic services and encourage transparency and accountability. IFC’s investment in Africell supports a fast-growing company which is committed to providing high quality, affordable mobile services to African consumers.”
The IFC said it has invested more than $1 billion in 37 mobile phone projects over the past 10 years spanning 15 African nations. The organisation said its “current investment focus in Africa’s telecommunication sector is aimed at improving the availability and reliability of affordable communications services, supporting the adoption of new communication technologies, and promoting technology-enabled innovation and entrepreneurship”.
Africell Holding owns 100% of Africell’s operations in the Gambia, Sierra Leone and the DRC, and 98.99% of Africell Uganda. The group, established in 2001, said its total number of active subscribers reached 12 million in 2014 and is expected to reach 15 million by the end of this year. “All four operations offer voice and 3G data services with plans to deploy LTE (long term evolution) services, which are already available in Kampala, Uganda” Africell said.
Africell chairman and chief executive officer Ziad Dalloul said the partnership with international financing organisations “is another milestone in Africell’s endeavour to further its social and development role in the markets it operates”.
In May 2014, the IFC announced a $2m advisory services agreement with Tigo Ghana to develop and expand mobile financial services in Ghana. The project was part of the Partnership for Financial Inclusion, a joint $37.4m initiative of IFC and The MasterCard Foundation to expand microfinance and extend mobile financial services in sub-Saharan Africa.
According to a report released earlier this year by Moody’s Investors Service, Africa’s telecoms sector will undergo more mergers and acquisitions activity as its markets continue to consolidate as they mature.
The average number of telecoms operators in each African country is three, with some countries, such as Uganda, Cote d'Ivoire and Tanzania, having six operators, the MIS report said.