Investment groups worldwide provide backing for Axian Telecom's bond, totalling $600 million and surpassing demand.
In a significant move to bolster Africa's digital economy, several development finance institutions (DFIs) have played a key role in backing Axian Telecom's recent $600 million bond issuance.
The Emerging Africa & Asia Infrastructure Fund (EAAIF), International Finance Corporation (IFC), British International Investment (BII), DEG, Proparco, and other DFIs collectively anchored a $160 million portion of the bond, with EAAIF contributing $40 million. This strong backing helped secure a bond that was 2x oversubscribed, attracting over $1.3 billion in investor demand.
This financing enables Axian Telecom to accelerate strategic investments across its subsidiaries in nine African countries, including Madagascar, Senegal, Tanzania, Togo, Uganda, Democratic Republic of the Congo, and Comoros. The funds will support the expansion of mobile broadband networks, fibre optic rollout, data centers, subsea cable infrastructure, and telecom towers.
By bolstering digital infrastructure, the DFIs’ involvement supports economic growth and connectivity for over 40 million mobile customers served by Axian Telecom. The bond's success and Axian’s rapid revenue growth (around 2.5-fold between 2020 and 2023) underline its pivotal role as a leading pan-African telecommunications provider within Africa’s vibrant digital sector.
EAAIF, with its goal of scaling telecom infrastructure across emerging markets through partners like Axian Telecom, hopes to lay foundations for connectivity "that spans nations, strengthens communities, and supports the ambitions of people across Africa in an increasingly connected world".
Axian Telecom, a pan-African operator in telecommunications, mobile financial services, and digital infrastructure, experienced strong revenue growth and was among the fastest-growing companies in Africa. The company's operations span across Madagascar, Senegal, Tanzania, Togo, Uganda, Democratic Republic of the Congo, and Comoros.
The latest bond issuance by EAAIF also helps to strengthen Africa's nascent debt capital markets. The remaining $340 million of the bond issuance has been raised from a mix of institutional investors.
Tidiane Doucoure, director for emerging market alternative credit at Ninety One, stated that expanding access to digital services unlocks new economic opportunities and greater financial inclusion, which are crucial drivers for intra-African trade and entrepreneurial growth.
For telcos, issuing bonds provides a means for accessing substantial, long-term capital at a lower cost than traditional loans. This lower-cost capital will enable large-scale network expansions and technology upgrades.
The bond issuance from Axian Telecom supports the fund's goal of providing improved digital infrastructure to millions of people. EAAIF backed Axian Telecom's maiden $420 million bond issuance with a $20 million investment in February 2022. To date, EAAIF has allocated over $320 million to telecom bonds.
In conclusion, the involvement of DFIs in Axian Telecom’s bond issuance not only provides significant financing but also lends credibility and attracts further investment. This backing enables Axian Telecom to expand its pan-African operations, enhance digital infrastructure, and accelerate growth supporting Africa’s digital economy.
- The Emerging Africa & Asia Infrastructure Fund (EAAIF), International Finance Corporation (IFC), British International Investment (BII), DEG, Proparco, and other development finance institutions (DFIs) are involved in the energy transition of Africa's digital economy by investing in Axian Telecom's $600 million bond issuance.
- Financial inclusion is fostered through this investment, as DFIs collectively invested $160 million in the bond, thereby contributing to greater access to digital services, which are crucial drivers for intra-African trade and entrepreneurial growth.
- The social impact of this investment is significant, as the funds will support the expansion of Axian Telecom's mobile broadband networks, fibre optic rollout, data centers, subsea cable infrastructure, and telecom towers, potentially benefiting over 40 million mobile customers.
- The development finance sector, through blended finance strategies, plays a pivotal role in the growth and development of businesses like Axian Telecom, as this bond issuance provides the company with the necessary capital to scale its operations, enhancing Africa's digital infrastructure and supporting the continent's digital economy.
