EAAIF invests $28mn in Africell’s debut bond issuance

The Emerging Africa and Asia Infrastructure Fund (EAAIF) has made a significant investment of $28 million as the sole impact investor in an oversubscribed 300-million-dollar maiden bond issue by Africell, a leading telecommunications company operating in Angola, Gambia, Sierra Leone, and the Democratic Republic of Congo. This strategic funding injection is set to bolster Africell's growth capital expenditure in key markets, signaling a positive development for the African capital markets. Folatomi Fayemi, an Investment Specialist at Ninety One, shed light on the significance of this investment and its potential impact during a recent interview on CNBC Africa. The bond issuance by Africell, a major player in the telecommunication industry across four African countries, is expected to fuel the company's growth plans and expansion strategies, particularly in enhancing 4G penetration and value-added services for its customers. In a market where access to capital has been challenging over the past few years, the timing of Africell's bond issuance comes at a critical juncture. With only a handful of issuers in the sub-Saharan African context, this move not only diversifies the investor base but also deepens the African capital markets, creating new opportunities for companies to tap into global funding sources. Fayemi pointed out that Ninety One's role in the transaction was crucial, as they acted as an anchor investor in the bond issuance, offering a firm commitment of $40 million to support the initiative. The successful outcome of the issuance, with bids exceeding the initial target and the eventual allocation of $28 million to Ninety One, underscores the growing interest in African investment opportunities. Speaking on the broader significance of mobilizing private capital for low and middle-income countries in Africa, Fayemi emphasized the role of impact investors and development finance institutions in fostering sustainability and growth. By enabling companies like Africell to access private capital markets, these organizations play a vital role in supporting economic development and creating a more robust financial ecosystem. Furthermore, the success of Africell's debut bond issuance sets a positive precedent for other African companies looking to raise capital through international bonds. As more companies corporatize and establish solid track records, the potential for Africa to increase its share of the global stock of international bonds becomes increasingly promising. With favorable macroeconomic conditions and a growing investor appetite for African opportunities, the stage is set for more success stories like Africell in the capital markets. In conclusion, EAAIF's investment in Africell's bond issuance not only underscores the confidence in the company's growth prospects but also highlights the potential for African companies to access global capital markets and drive sustainable development. As the African capital markets continue to evolve and attract international investors, collaborations between impact investors, companies, and financial institutions are essential for unlocking the continent's vast economic potential.