International Finance Corporation (IFC) has announced a $194 million loan to Airtel Africa aimed to support universal and affordable broadband penetration in Africa.
The loan is designed to boost internet connectivity in six countries across the continent, upsetting the deficit that has resulted in low mobile internet access in Sub-Saharan Africa.
A report from GSMA, a mobile internet info analysis firm, said that as at the end of 2021, less than half of sub-Saharan Africa’s population had access to mobile services, while only 28 percent of the population had access to mobile internet. GSMA also estimates that by 2025, the value added by mobile technology and services is expected to reach almost $155 billion annually.
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The new financing facility, which will help to connect millions of Africans to mobile internet, is in line with Airtel Africa’s strategy to increase debt within its operating companies.
“I am very excited to announce the signing of this new facility with IFC. Not only does this facility align with our focus on improving our balance sheet through localizing debt within our operating companies, but it also supports our commitment and our ability to meet very strict ESG criteria in demonstration of the continued execution of our sustainability journey,” said Segun Ogunsanya, Airtel Africa CEO. “I look forward to working closely with IFC in the coming years and to exploring further opportunities to cooperate together to support the economies and communities where we operate.”
According to IFC, the financing facility has a tenor of eight years and will be used to support Airtel Africa’s operations and investments in Democratic Republic of Congo, Kenya, Madagascar, Niger, Republic of Congo and Zambia, where the banking landscape and access to local funding remains largely underdeveloped.
“The COVID-19 pandemic made mobile connectivity even more urgent for both social and economic development. Helping more people connect to affordable and fast internet networks is a priority for IFC in Africa, especially in the continent’s lower-income countries. The partnership with Airtel Africa will help achieve this,” said Sérgio Pimenta, IFC Vice President for Africa.
IFC said the loan is supported by co-financing from institutional investors through IFC’s Managed Co-Lending Portfolio Program (MCPP). IFC’s loan in Zambia is supported by the Local Currency Facility of the International Development Association’s (IDA) Private Sector Window, the World Bank’s investment arm said.
IFC has been supporting digital innovations in Africa by partnering with existing companies and organizations to provide funding for ideas that promote financial inclusion, economic growth etc.
The investment firm said that as part of the loan facility, Airtel Africa has committed to comply with the applicable requirements of IFC’s Performance Standards on Social and Environmental Sustainability and has put in place a dedicated Environmental and Social Action plan. This will further strengthen the company’s commitment to transforming lives across the communities in which Airtel operates and will provide clarity on how Airtel can help address inequality and support economic growth across Africa, it added.
IFC’s digital strategy in Africa aims to enable ubiquitous, reliable, and affordable connectivity. This includes investing in the growth of independent tower operators, data centers and broadband, as well as supporting mobile operators primarily in fragile and conflict situations (FCS) and Low-income International Development Association countries (LIC-IDA).