Accelerating high-speed connectivity in sub-Saharan Africa
Johannesburg - Ninety One has announced that it has pioneered the first international debt raise for Paratus Group Holdings Limited, an established full-service telecommunications provider with a presence across seven countries in southern, central and east Africa. The company’s mission is to bring the benefits of modern connectivity to businesses and homes in developing countries, empowering them to thrive in the digital age.
In this landmark collaboration, Ninety One, as the sole mandated lead arranger, said it mobilised capital across two of the portfolios within its Emerging Markets Alternative Credit Strategy: Africa Credit Opportunities and the Emerging Africa Infrastructure Fund (EAIF).
The Anglo-South African asset manager said it provided a US$31 million loan to Paratus Group to finance a number of corporate strategic initiatives, including the enhancement of last-mile connectivity and to introduce more reliable internet services across three sub-regions and six countries in Africa; Namibia, Angola, Mozambique, DRC, Botswana, South Africa and Zambia.
NInety One explaned that "the funds will be allocated for acquisitions and expansion initiatives, primarily focusing on the construction of three new fibre routes connecting strategic cities," adding that "these routes include Walvis Bay-Johannesburg-Maputo, Brazzaville-Johannesburg-Maputo, and Luanda-Lusaka-Dar Es Salaam, expanding their existing fibre network, which spans over 10,000 kilometres. Moreover, the loan will finance the construction of Angola's first Tier IV data centre, the fifth carrier-neutral data centre for Paratus in southern Africa, alongside two other Tier III data centres in Luanda, the Angolan capital".
It said the World Bank has estimated that nearly 1.1 billion new unique users must be connected across Africa to achieve universal broadband access by 2030, and this is estimated to require USD100m of investment, and 250,000 4G base stations and approximately 250,000 km of new fibre-optic cable. Although there have been recent signs of accelerated development, a considerable proportion of the African population does not have access to internet.
According to Sine Zulu, Investment Specialist in the Ninety One Emerging Markets Alternative Credit team, this financing is a key demonstration of the growing demand for connectivity and data on the continent. “Ninety One’s structuring expertise and ability to mobilise private capital into digital infrastructure in emerging economies has enabled finance to flow where it is needed most. The collaboration of Ninety One’s Africa Credit Opportunities and EAIF is a progressive partnership designed to deliver high-impact infrastructure projects," Zulu explained.
Schalk Erasmus, CEO of Paratus, said: “Widening access to fibre and data centres in key African markets will progress development and inclusive growth - maximising opportunities in countries where entrepreneurial spirit abounds. The commitment from Ninety One and EAIF sends the right signal to the rest of the market and reinforces our mission to support a more connected and technologically advanced Africa.”
A bright future for connectivity
The partnership between Ninety One and Paratus not only addresses Africa's increasing demand for connectivity, but also strengthens the continent’s core digital infrastructure, fundamental to building more advanced economies. “Together, Ninety One and Paratus are enhancing last-mile connectivity,” Zulu concluded.