Proparco invests in communication infrastructure development in Africa
French company Proparco has agreed with IHS Holdings. Under the terms of the agreement, the subsidiary of the French Development Agency (AFD) will invest US$1.2 billion. The funding will come from an IHS bond issue, the largest in the history of the African telecoms infrastructure sector. In addition to Proparco, the International Finance Corporation and the Emerging Africa and Asia Infrastructure Fund participated in the deal.
IHS is active in the communications tower sector across Africa. The company will use the proceeds to refinance its debt. The current bond issue was made in two tranches. According to Emmanuelle Riedel Drouin of Proparco, this allowed the company to not only restructure its debt but also extend its repayment terms.
Africa needs wireless infrastructure development. However, implementing large-scale projects in this area requires significant financial resources. Many local and foreign companies are willing to invest, but government financial institutions are interfering. As a result, the sector is underfunded. The African Development Bank estimates that the industry needs about US$170 billion to be fully developed. At the same time, the current funding gap is about US$100 billion.
Proparco overview
Proparco is an investment organisation that promotes critical economic sector development in Africa, Latin America, and the Middle East. It focuses primarily on projects that achieve sustainable development goals and carefully selects investment opportunities. Initiatives must be both environmentally sound and financially viable.
Proparco gets financed by its parent company, the French Development Agency (AFD), and private shareholders. Their combined capital exceeds $773 million.
From 2019, the company will participate in the Choose Africa programme:
1. AFD has launched this initiative to support the development of SMEs in Africa.
2. The programme envisages an allocation of €2.5 billion over 4 years.
3. Of this amount, €1.5 billion will be in the form of bank loans.
4. The remainder will take the form of equity investments in SMEs.
The 2020 programme has been expanded. It received an additional €1 billion in funding. Proparco wanted to support companies during the pandemic.
In addition to the initiative outlined above, the company is actively supporting projects that increase the number of jobs. It has invested in the expansion of renewable energy capacity in several countries. Proparco also supports social initiatives. With its help, some 6,000 students can receive a quality education at the universities of their choice.
