The Emerging Africa Infrastructure Fund has closed its first transaction, a US$30mn credit facility for Mobile Systems International Cellular Investments Holdings BV of the Netherlands (MSI Cellular). The facility is part of a US$109mn syndicated loan arranged by ING and Standard Bank London to provide MSI Cellular with long term capital funding to help meet its expansion needs in sub-Saharan Africa
MSI is licensed by 14 African countries, including Egypt, DRC, Tanzania and Zambia , and, with 1.3mn subscribers, is one of the leading providers of GSM-based telecommunication services in Africa. The facility consists of a US$22mn as senior ranking secured debt, and a tranche of US$8mn as unsecured subordinated debt. The objective of the fund is to support economic development in sub-Saharan Africa through the provision of long term debt finance to support private sector infrastructure development.
The fund is aimed at projects in sectors that traditionally do not attract international commercial bank interest the electricity, telecoms, transport and water/ sanitation sectors. The US$305mn fund is a unique PPP initiated by the UK government’s Department for International Development in partnership with the development arms of the Swedish, Swiss and Dutch governments, collectively having provided US$100mn to the fund as equity.
The balance of the fund’s capital comprises US$85mn of subordinated debt from three development finance institutions, FMO of the Netherlands, Development Bank of Southern Africa and DEG of Germany and US$120mn of senior debt from two commercial banks Barclays Bank and Standard Bank Group. The fund is actively seeking new project opportunities and expects to make a further US$60mn available this year to three projects, two in the transportation sector and one in the electricity sector.