EAIF commits $39mn to Sonatel bond

The Emerging Africa Infrastructure Fund has committed $39 million to a $125 million bond issued to support Sonatel's expansion in West Africa. Folatomi Fayemi, Investment Specialist at Nine-One and the Fund Manager of the fund, recently discussed the objectives and impact of this transaction on CNBC Africa. The fund, managed by Nine-One, was established in 2002 with funding from various governments and is owned by the private infrastructure development group called PIDGE. It focuses on private debt investments with an impact angle, investing in projects across Africa. Fayemi highlighted the significance of this fund in supporting companies like Sonatel, a major player in the digital communication space in West Africa. This transaction will focus on the modernization of Sonatel's network and the rollout of 5G, setting a trend in the market. Through a securitization structure, it will allow Sonatel to fund future expansions directly from its balance sheet, driving growth and innovation. Anchor investors such as IFC and Imagine Africa Infrastructure Fund played a crucial role in this deal, indicating strong partnerships for long-term investments in Africa's infrastructure. The involvement of regional capital markets in transactions like these is vital for developing modern infrastructure across various sectors, with telecom being a primary example. Fayemi emphasized the importance of digital connectivity for emerging markets and Africa's development, citing the sector as primed for growth due to favorable dynamics and demographics. The fund's focus on expanding the local capital markets and pioneering corporate issuances demonstrates a trend towards more African businesses tapping into international and domestic capital to fuel their growth and diversify funding sources. Looking ahead, Fayemi expressed optimism about seeing similar corporate issuances in the market, pointing to a pipeline of potential issuances in sectors beyond digital communications, such as energy and finance. This trend signals a promising future for African companies accessing international capital markets for financing. In conclusion, the commitment of $39 million from the Emerging Africa Infrastructure Fund to Sonatel's bond marks a significant milestone in supporting the expansion and innovation of digital communication infrastructure in West Africa. This investment sets the stage for future growth and development in the region's telecom sector, showcasing the potential of private debt funds to drive impactful investments in Africa's infrastructure.