More Africa NewsSeacom negotiates $260 million financing from IFC for its expansion project

May 5, 2022by myles0

Broadband connectivity continues to grow in Africa. Seacom, which aims to extend its geographical coverage to all of Africa, is increasing its investments to this effect.

The fiber optic telecommunications service provider Seacom is negotiating financing for a maximum amount of $260 million with the International Finance Corporation (IFC), a branch of the World Bank focused on financing the private sector in emerging countries. Seacom will use the funds to expand its geographical footprint to at least 12 countries in Africa. The total cost of the project is estimated at approximately 563 million USD.

IFC’s proposed investment includes $100 million from equity and $160 million raised from other commercial banks and shadow lenders.

Through the project, IFC will help Seacom increase its business services capabilities for SMEs, mediums, and large enterprises in South Africa, East Africa, and West Africa. To this end, the company will rely on its 21,000 km fiber optic network and on its strategic alliances on 2Africa and Equiano cables. Seacom’s growth strategy will be achieved through strategic acquisitions and organic growth initiatives in its markets.

If approved, this financial support will be in addition to the financing operations carried out by Seacom to expand its geographical footprint across the continent and diversify into the provision of business services. In 2019, the company then conducted a study on the market potential of fiber optic services in Tanzania, Uganda, Kenya and Rwanda, with funding from the United States Trade and Development Agency (USTDA). .

According to the IFC, the successful expansion of Seacom’s submarine or terrestrial cable capacity should lower the wholesale price and level the playing field between retail operators, thereby improving the competitiveness of retail markets with improved accessibility and quality of connectivity in the target countries concerned. 

Source: Agence Ecofin

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