Airtel Africa negotiates a $200 million loan with the IFC to finance its activities in the DRC, Rwanda and Kenya
May 3rd 2024
Telecoms company Airtel Africa is negotiating a $200 million loan from the International Finance Corporation (IFC), the branch of the World Bank focused on financing the private sector in emerging countries. Bharti Airtel’s African subsidiary will use the funds to cover its capital expenditure (CAPEX) requirements and refinance existing debt in the Democratic Republic of Congo (DRC), Rwanda and Kenya.
In a press release published on Tuesday April 30, the IFC indicates that the CAPEX component will be oriented towards the modernization of Airtel Africa’s telecoms network. This involves purchasing active equipment at 4G sites such as antenna, software updates, packet core, transceiver base station. The telecoms company will also strengthen its fiber optic capacity.
In December 2022, Airtel Africa obtained initial financing of 194 million from the IFC to support its activities in the DRC, Kenya, Madagascar, Niger, DRC and Zambia. The initiative is part of the telecoms group’s growth strategy in a context of increased competition in the African telecoms market. The company is also looking to strengthen its balance sheet by continually reducing its debt at group level and localizing it within the operating companies. In its financial results for the third quarter of 2023, the company set a May 2024 deadline for full repayment of the group’s debt.
“The expected results at the project level build on those of previous transactions and involve increased access to quality connectivity for individuals and businesses by supporting the expansion of broadband networks in the DRC, Kenya and Rwanda over the next few years. Beyond the project, this operation should help increase the competitiveness of the mobile connectivity market in target countries by promoting the pursuit of technological innovation through competitive channels,” said the IFC.
As a reminder, Airtel Africa operates in 14 markets where it claims 151.2 million customers in the third quarter of 2023. In Rwanda, the company has 5 million subscribers for a market share of 38.6%, compared to 61.4%. for its only competitor MTN (source: Rwanda Utilities Regulatory Authority). In the DRC, Airtel holds a market share of 29.02% compared to Vodacom (38.92%), Orange (25.64%) and Africell (6.42%), according to the telecoms regulator. In Kenya, Airtel has a market share of 29%, compared to 65.9% for its main rival Safaricom, according to data from the Communications Authority.
Source: Agency EcoFin
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