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The International Finance Corporation (IFC) has announced that it has invested in a new fund called the Digital Infrastructure Fund by Convergence Partners Africa, an investment management firm focused on the technology, media and telecom sectors in Africa.
According to a media statement, the $25 million investment is aimed at strengthening broadband infrastructure and improve online access to digital services for individuals and businesses in more than 12 countries in sub-Saharan Africa.
The COVID-19 pandemic has accelerated the adoption of digital technologies and the demand for digital infrastructure which are helping connect businesses with customers and suppliers, creating new channels to access health and education services, and enabling entrepreneurs. However, it has also exposed the digital divide in Africa.
IFC’s equity investment in Convergence Partners’ Digital Infrastructure Fund will promote improved digital connectivity and access to digital services by investing in independent operators and service providers in sub-Saharan Africa, explains the statement.
The fund has a target size of $250 million and IFC invested in Convergence Partners’ previous fund, Convergence Partners Communication Infrastructure Fund.
“We are very pleased to extend our relationship further with IFC, who were also investors in our last fund and co-investors with us in underlying portfolio companies,” said Andile Ngcaba, Chairman of Convergence Partners. “We share a joint ambition to invest in those businesses on the African continent that are contributing meaningfully towards addressing the digital inclusion gap that exists.”
Investments made through the Digital Infrastructure Fund will support critical digital infrastructure companies and projects including broadband networks, fibre cable systems, mobile towers, digital service provider platforms and data centres, adding new connectivity and data centre capacity in many countries in Africa where such infrastructure is currently limited.
“Africa is ready for high throughput pervasive fibre networks, independent hyperscale data centres, edge, AI, 5G and IoT. Connectivity is at the foundation of 4IR. Our new Digital Infrastructure Fund is the platform for building Digital Africa for future generations,” added Ngcaba.
Internet access in Africa relies largely on mobile networks. Mobile broadband penetration stands at only about 34% and fixed broadband at less than five percent across most of sub-Saharan Africa, excluding South Africa.
Africa also experiences a large urban and rural connectivity divide, with 28% of urban households having access to the Internet compared to only 6% in rural areas, according to the International Telecommunications Union.
Also commenting, Makhtar Diop, IFC’s Managing Director said: “Increased broadband connectivity supports economic growth, job creation, and quality of life. Together, we can help connect more homes and businesses in Africa by supporting funds such as the Convergence Partners Digital Infrastructure Fund to bridge the $100 billion digital infrastructure financing gap to reach universal connectivity by 2030.”
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