The Sonatel Group, a leading telecommunications operator in West Africa, has announced that it has raised $41.5 million from the Emerging Africa Infrastructure Fund (EAIF). This capital injection will enable Sonatel to finance its growth and expansion projects in the region.
Folatomi Fayemi of Ninety One pointed out that this investment represented a potentially replicable model for stimulating economic growth and promoting the adoption of digital technologies across Africa. The initiative aims to strengthen Sonatel’s telecoms infrastructure and support its expansion.
Olivier Buyoya, Regional Director of the Société financière internationale pour l’Afrique de l’Ouest (SFI), which is also participating in this operation, expressed his pride at being part of this milestone in the history of securitisation in the region.
Sonatel’s securitisation mutual fund, which was officially launched on 14 December 2023, had a subscription period extending to 12 January 2024. The IFC had already committed FCFA 17 billion to this ambitious project.
Although Sonatel did not reveal the full details of the transaction, EAIF’s commitment of $41.5 million indicates that the total amount sought may not have been fully raised by the close of subscriptions. The investment fund had already firmly subscribed for FCFA 10 billion, but was prepared to increase its stake up to a certain maximum amount.
The deal was structured in partnership with Invictus Capital & Finance and KF Titrisation, acting respectively as management and intermediation company and debt securitisation fund management company. It comes at a time when Sonatel is celebrating the 25th anniversary of its listing on the BRVM, marking a quarter of a century of innovation and success in the telecommunications sector.
Sonatel’s second securitisation fund issue is a significant milestone for the telecommunications sector in West Africa. The involvement of international financial partners such as EAIF and the IFC testifies to the attractiveness of African companies in the global financial markets, despite the continuing challenges in raising funds on the continent.
With an estimated annual rate of return of 6.4%, this investment could generate around FCFA 8.2 billion in gross interest for EAIF, but other factors could influence this return. The collaboration between Sonatel and EAIF promises to further stimulate the expansion of telecoms infrastructure in West Africa, strengthening connectivity in the region and stimulating economic growth.