The Emerging Africa & Asia Infrastructure Fund, International Finance Corporation, British International Investment, DEG, and Proparco have committed $160m in an anchor investment to the $600m Axian Telecom bond issuance.
Several development finance institutions (DFIs) have joined forces to anchor a $600m bond issuance from Axian Telecom, a pan-African operator in telecommunications, mobile financial services, and digital infrastructure.
International Finance Corporation (IFC), the UK’s British International Investment (BII), Germany’s DEG, France’s Proparco, and Emerging Africa & Asia Infrastructure Fund (EAAIF) – part of the Private Infrastructure Development Group (PIDG), have made a $160m anchor investment into the five-year bond.
The bond, which offers bondholders a 7.25% coupon, has attracted over $1.3bn in demand and EAAIF confirmed that the remaining $340m had already been raised from a mix of institutional investors.
EAAIF, which is a blended finance vehicle that raises and deploys public and private debt capital to transformative infrastructure projects across Africa, the Levant and South and Southeast Asia, announced that among other key initiatives, the investment will support Axian Telecom’s capital expenditure across its subsidiaries in order to drive economic growth and provide improved digital infrastructure to millions of people.
In an earlier announcement, Axian Telecom said it had included a sustainable development impact disclosure with the bond issuance, communicating its intentions to invest in infrastructure, promote smartphone accessibility and access to mobile financial services, and bring about greater digital connectivity across its operations in Africa.
Hassan Jaber, CEO of Axian Telecom, said the support of the anchor investors is a strong vote of confidence in the company’s long-term vision and the impact of its work.
“This financing enables us to scale innovative digital infrastructure across our markets and to bring transformative connectivity to millions, fostering inclusive growth and strengthening AXIAN Telecom’s role in advancing Africa’s digital future,” he said.
Pan-African operations
Axian Telecom operates across Madagascar, Senegal, Tanzania, Togo, Uganda, Democratic Republic of the Congo, and Comoros, serving over 40 million mobile customers with digital infrastructure, including mobile broadband networks, fibre optic cables, towers, subsea cables, and data centres.
According to EAAIF, the company experienced strong revenue growth of approximately 2.5 times between 2020-2023 and was among the fastest-growing companies in Africa.
The fund confirmed to Impact Investor that it had backed Axian Telecom’s maiden $420m bond issuance with a $20m investment in February 2022, which supported the company’s expansion in frontier economies across the region, including Tanzania, Madagascar, and Togo.
Tidiane Doucoure, director for emerging market alternative credit at Ninety One, the fund manager of EAAIF, said: “Expanding access to digital services unlocks new economic opportunities, and greater financial inclusion, which are crucial drivers for intra-African trade and entrepreneurial growth. This oversubscribed transaction underscores the immense potential of African businesses and the growing confidence of global investors in the region’s digital future and champions like Axian Telecom.”
Digital opportunity
EAAIF said that Africa’s young, tech-savvy, and rapidly growing population is driving demand for mobile and digital services and that despite the limited availability of fixed broadband due to high costs and infrastructure gaps, the continent has “a unique opportunity to leapfrog outdated systems and build a digitally empowered future”.
Through partners like Axian Telecom, EAAIF said it hoped to scale telecom infrastructure across emerging markets, laying foundations for connectivity “that spans nations, strengthens communities, and supports the ambitions of people across Africa in an increasingly connected world”.
The fund said this latest bond issuance also helps to strengthen Africa’s nascent debt capital markets and that for telcos, issuing bonds provided a means for accessing substantial, long-term capital, which is often at a lower cost than traditional loans. This, it said, will enable large-scale network expansions and technology upgrades, adding that corporate bond issuances also attracted international investors, which helps to deepen market liquidity and confidence. To date, EAAIF confirmed it has allocated over $320m to telecom bonds.
