The International Finance Corporation (IFC) has provided a US$200mn loan to three of Airtel Africa’s subsidiaries (which have not yet been named) to support the expansion and modernisation of the MNO’s network and accelerate the deployment of new infrastructure with a focus on rural areas.
Financing will take the form of a sustainability-linked loan with key performance indicators related to Airtel Africa’s sustainability strategy: digital connectivity, financial inclusion and improving gender representation in management.
Most of the financial package will be provided in locally denominated currency, which the IFC is securing to reduce the impact of currency volatility.
This is the second time Airtel Africa has received financial support from the IFC, who at the end of 2022 provided US$194mn across six African markets to increase access to mobile internet services.
Around 600mn Africans lack access to 4G mobile coverage, with many sub-Saharan African markets lacking availability and performance of mobile internet. However, 86% of companies use mobile phones for business operations and services according to a recent IFC report on digital connectivity in Africa.
The report also found that the cost of technology and mobile services remains a significant barrier in Africa, with enterprises facing up to 35% higher costs than those in other regions. US$6bn in infrastructure investment is needed annually to close the technology gap and deliver affordable and reliable mobile services to encourage adoption of digital solutions.
While the specific deployment of this capital is not yet known, it is likely that a portion of this will go towards the tower industry for the rollout of new infrastructure, particularly rural expansion programmes. This will result in the deployment of new infrastructure and structural upgrades for colocations on existing sites.
Airtel Africa was one of the early accelerators of towerco activity on the continent, signing sale leasebacks agreements with all the major towercos - Helios Towers, IHS Towers, SBA Communications and Eaton Towers (which have transferred to American Tower and are one of their largest partners).
The MNO retains only a small remaining portfolio in Chad and Gabon, as well as some strategic sites in other markets.
Airtel Africa does have signed agreements with any of the rural specialist network-as-a-service firms AMN, NuRAN, Vanu of iSAT Africa, but the boost in demand for rural coverage solutions could be a catalyst to facilitate new industry partnerships.
Mary Porter Peschka, IFC Regional Director for Eastern Africa, stated “IFC's partnership with Airtel is critical to expanding high-speed connectivity in Africa.
"Better connectivity means more opportunity. Our work with Airtel will help millions more people not only to come online but also gain access to high-speed networks so that they can better leverage the digital economy opportunities”
Airtel Africa's Group CEO, Sunil Taldar said: "The expansion of our network is critical to our ambition of bridging the digital divide across Africa.
"This ambition can only be unlocked through continued investment into the region, and we welcome the partnership with IFC to enable this and further support our sustainability strategy of transforming lives and building better futures for communities across Africa."
