The International Finance Corporation (IFC), a member of the World Bank Group and the world’s largest development bank focused on emerging markets, has announced that it has invested in Axian Telecom, a pan-African telecoms services provider.
The bond, Axian Telecom’s first, will be used to repay the company’s current debt and fund the company’s digital infrastructure network growth, which will take place largely in Tanzania and Togo.
Axian Telecom will continue to foster Africa’s growing digital economy and digital finance by offering accessible, dependable, and secure digital services to areas where affordable, high-quality mobile connectivity is difficult to come by, according to the IFC.
Axian has subsidiaries in Tanzania, Madagascar, Togo, Mauritius, and Uganda, as well as joint ventures in Senegal, Réunion-Mayotte, and Comoros, that operate in eight markets. It provides mobile network services, as well as digital infrastructure and mobile financial services, across three key business segments.
Last year, the company purchased Millicom International Cellular’s Tanzanian assets, after which it added Tigo Tanzania and Zanzibar Telecom to its portfolio, as we noted at the time.
IFC subscribed to 12 per cent of the bond (equivalent to $50 million) as an anchor investor in a total issuance of $420 million.
As Makhtar Diop, IFC’s managing director puts it: “IFC’s investment in Axian Telecom’s bond is consistent with the World Bank Group’s efforts to establish a more competitive and reliable telecommunications sector as part of the Digital Economy Initiative for Africa (DE4A).”
The Digital Economy Initiative for Africa (DE4A) aims to ensure that every individual, business, and government in Africa will be digitally enabled by 2030 in support of the African Union’s Digital Transformation Strategy for Africa.
IFC points out that capital markets are critical for filling the infrastructure investment gap in emerging and developing markets. In fact, Axian Telecom represents IFC’s second recent bond investment in Africa’s digital economy. This investment follows IFC’s participation in a bond issued by Liquid Intelligent Technologies, Africa’s largest independent fibre, data centre and cloud technology provider.
IFC says that surging demand for digital connectivity during the Covid-19 pandemic led its commitments to the telecoms, media and technology sector in emerging markets to exceed US$1 billion in the fiscal year ending June 2021. It adds that almost three-quarters of the commitments were made in Africa.
