The International Finance Corporation (IFC), a member of the World Bank Group, has made a significant investment of $165 million (KES 26.99 billion) in Airtel Africa, a leading telecommunications company operating across 14 countries in sub-Saharan Africa.
This substantial investment aims to fund Airtel Africa’s operations and refinance existing loans across three key subsidiaries in Kenya, Rwanda, and the Democratic Republic of the Congo (DRC).
Financing Details and Purpose
The IFC’s investment comprises a KES 22.27 billion debt from its own account and an additional $35 million (KES 4.72 billion) mobilized through its Managed Co-Lending Portfolio Programme (MCPP).
The MCPP is a program run by the IFC that facilitates investment in developing countries by connecting institutional investors like pension funds, insurance companies, and sovereign wealth funds with IFC’s loan portfolio in these regions.
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According to the IFC’s disclosure, “The proposed funding will support Airtel Africa operations in the Democratic Republic of Congo, Rwanda, and Kenya to cover capital expenditure (CAPEX) needs and refinance USD-denominated debt.”
Network Modernization and Expansion
The IFC further stated, “The CAPEX component will be directed towards modernizing the telecom network by purchasing active equipment on sites for 4G, such as antennas, software updates, packet cores, base transceiver stations, and the acquisition and/or buildup of fibre capacity.”
This investment aligns with Airtel Africa’s strategy to enhance its network capabilities and provide robust telecommunications services across the region.
Previous IFC Investment and Impact
This is not the first time the IFC has invested in Airtel Africa. In 2022, the IFC provided a $150 million (KES 20.24 billion) investment to support Airtel Africa’s capital expenditure requirements for two years across seven of its operating companies, including Kenya, DRC, and others.
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The 2022 IFC funding aimed to enable Airtel Africa to roll out new telecom sites, upgrade existing sites to support 3G/4G or potentially 5G services, add carrier bands and sectors for capacity and network upgrades, invest in fibre transmission infrastructure, and enhance IT systems and sales networks.
Data Center Expansion Plans
Airtel Africa’s expansion plans extend beyond network upgrades. The company recently broke ground on Nxtra by Airtel, its first data center in Lagos, Nigeria, which is expected to deliver an impressive 38 megawatts of total power and host high-density racks with a remarkable 1.3 power usage effectiveness (PUE).
Plans are also underway to build a similar, albeit smaller, data center in Nairobi, Kenya, with a capacity of 7 megawatts.
According to Segun Ogunsanya, Airtel Africa’s chief executive officer, the company aims to establish smaller data centers at its mobile cable landing stations, including Tanzania, DRC, and Gabon.
Investing in Kenya and Beyond
In the Kenyan market, Airtel Kenya has stepped up investments in voice and mobile money business, deploying 5G sites in Kenya, Nigeria, Zambia, and Tanzania.
As Airtel Africa continues to expand its network capabilities and data center infrastructure, this substantial investment from the IFC will undoubtedly contribute to the company’s growth and support the development of robust telecommunications services across the region.
With the backing of the IFC and its commitment to investing in developing countries, Airtel Africa is well-positioned to drive digital transformation and connectivity in sub-Saharan Africa.
