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EAIF commits billions to Sonatel’s receivables-backed bond

23rd January 2024

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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Private Infrastructure Development Group (PIDG) company, the Emerging Africa Infrastructure Fund (EAIF), has committed XOF23.5-billion to a XOF75-billion receivables-backed bond issued by securitisation vehicle Fonds Commun de Titrisation de Créance.

This will support West African telecommunications carrier Sonatel's expansion, modernisation and digital transformation plan in Senegal and beyond, boosting the company's network and improving its technology and equipment, as well as supporting the deployment of digital infrastructure, including subsea international cables, fibre to the home, cloud, new towers powered by hybrid and solar solutions and the roll-out of fifth-generation across key markets.

Proceeds from the bond will diversify Sonatel's sources of funding and be broken into two "cells" – the first of which will be XOF60-billion, in which EAIF will invest.

EAIF will act as an anchor investor alongside the International Finance Corporation (IFC), building on the Fund's anchoring role in Sonatel's oversubscribed bond issuance in 2020, where the group raised XOF100-billion to extend and enlarge its fourth-generation-plus network in urban and rural areas and to upgrade service platforms.

Fulfilling a similar role in West Africa's first-ever asset-backed security, the Fund and the IFC leverage their convening power and derisking abilities to mobilise private capital from local and regional investors through the innovative financing instrument, with Invictus Capital acting as arranger in the transaction, a statement issued by the EAIF outlined.

The new bond issuance's AAA rating enables Sonatel to fund from its balance sheet and encourages similar corporate issuances that stimulate the flow of international and domestic capital to pioneering African businesses.

“Sonatel is at the forefront of an exciting movement driving digital transformation and expanding connectivity where needed. Once again, we are proud to support Sonatel's growth ambitions, enabled through capital markets innovation that unites international and local finance. This transaction provides a replicable and scalable model to stimulate economic growth and advance digital technologies, which supports efficiency, digital access and productivity across the African continent,” said EAIF fund manager Ninety One investment specialist Folatomi Fayemi.

“IFC is proud to be part of such a milestone in the history of securitisation in the region and the telecommunication field. Through this partnership, we will reach our joint objective of reducing the digital divide and positioning Senegal as a hub for digital transformation in the region, thus providing new growth opportunities for stakeholders and creating thousands of jobs in the telecommunications sector,” concluded IFC regional director for West Africa Olivier Buyoya.

Edited by Creamer Media Reporter

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