The UK’s development finance institution (DFI) and impact investor, CDC Group has announced its commitment of $50.9 million to expand digital infrastructure, boost rural connectivity and accelerate digital technology access for rural and underserved communities across sub-Saharan Africa.
The fund is aimed at supporting the continued growth of the Information and Communication Technology (ICT) sector. it would also help to boost the development of necessary infrastructure and provide rural communities with access to affordable mobile connectivity across the continent.
“Digital inclusion provides an unparalleled opportunity for African countries. Tapping into these opportunities require long-term investments and the right partnerships to help develop innovative, sustainable and inclusive solutions to bridging the continent’s connectivity gap,” Clarisa De Franco, Managing Director and Head of Private Equity Funds, CDC Group, said.
The first investment is a $40 million commitment to Convergence Partners Digital Infrastructure Fund (CPDIF), managed by Convergence Partners. This is a specialist Africa-focused ICT fund manager working with other financial investors of $120 million and a target fund size of $250 million.
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CDC’s funding will enable CPDIF to invest in digital infrastructure, mobile penetration as well as what is needed to improve connectivity and access to ICT across the continent.
The funding will also support investment in fourth industrial revolution technologies such as 5G, cloud, Internet of Things and Artificial Intelligence by CPDIF. This will help stimulate innovation that will help bridge Africa’s digital divide.
CDC’s second investment is a $10.9 million equity commitment to a group of businesses led by Metier, a fund manager in sub-Saharan Africa. Other partners include Development Financial Institutions such as DEG, Proparco and other financial institutions investing under $40 million in Africa Mobile Networks (AMN).
“This investment will support Africa’s digital transformation, connect millions of people across the continent, facilitate access to quality education and healthcare, enhance digital skills, and promote financial inclusion,” Clarisa said.
The growth equity will enable the expansion of Africa’s mobile network infrastructure and rural connectivity from the current level of 2,000 towers across 10 countries, to 5,000 towers across more than 15 countries by 2023.
In addition, the expansion of digital connectivity to people living in remote villages will improve access to information and facilitate inclusive development that will have generational impact for such communities.
The World Bank estimates that approximately 45 percent of Africa’s population is farther than 10 kilometres from fibre network infrastructure, which is higher than any other continent.
Hence the need for the commitment, in order to deliver scalable solutions that will enable lasting digital infrastructure to improve access and lower costs of services for end users.
Being a champion of the United Nations Sustainable Development Goals (UN SDG), these investments contribute to UN SDG 8 on Decent Work and Economic Growth, as well as SDG 9 on Industry, Innovation, and Infrastructure.
