Global Courant 2023-04-17 18:58:24
BY PAUL TENTENA
The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, has committed a $33 million sustainability-linked debt facility to Raxio Group, a leading pan-African data center developer and operator.
The funding will enable the design, construction, operation and management of a series of high-performance data centers in seven countries in sub-Saharan Africa.
EAIF is acting as a co-arranger in the transaction alongside Proparco, with whom it will mobilize a $110 million debt package to Raxio to further develop digital infrastructure – in response to the region’s pressing demand for affordable internet connectivity.
The African data center market is one of the fastest growing in the world and is a key pillar of the continent’s fast-growing digital economy, which is expected to grow by 57% to $180 billion by 2025 and $712 billion by 2050.
EAIF’s investment will ensure that this growth is sustainable and inclusive for African communities and businesses, in line with the PIDG’s ambition to reach the UN Sustainable Development Goal on Industrial Innovation and Infrastructure (SDG 9).
The new Tier III quality data centers in Uganda, Ethiopia, Democratic Republic of Congo, Mozambique, Angola, Ivory Coast and Tanzania will be some of the first-ever independent, enterprise-standard data centers in these countries.
The centers will provide up to 11 MW of additional processing power and provide high-performance colocation and IT infrastructure services.
The investment marks an important step towards supporting connectivity and innovation and fueling the growth of digital economies in emerging data center markets, creating a favorable environment for high-growth companies to operate and access new markets.
Approximately 1,200 jobs will be created during the construction phase, with an additional 120 jobs expected after construction. After the initial rollout, EAIF and Raxio will focus on expanding into other African markets.
To date, EAIF’s digital communications infrastructure investment portfolio represents more than $124 million of its total portfolio of $1.14 billion.
The Fund’s risk appetite, structuring expertise and ability to raise capital that would otherwise not flow to critical digital infrastructure projects in sub-Saharan Africa provide a model for other investors seeking to create market-shaping impact in frontier and developing economies.
Sumit Kanodia, Investment Director at Ninety One, the fund manager of the Emerging Africa Infrastructure Fund, said data centers in Africa are enabling the growth of the continent’s digital economy and unlocking innovation for digitally indigenous communities and businesses, by providing more affordable access to transformative technologies and Services.
“Our partnership with Raxio represents a shared ambition to narrow the digital divide in several high-potential economies by filling a vital funding gap,” he said.
Robert Mullins, CEO of Raxio Data Centers, said it is a momentous milestone for Raxio.
“We are very pleased to have found in Proparco and EAIF the ideal long-term partners, with common goals and values. This substantial additional financing package is resounding confirmation of our achievements to date and the soundness of our expansion strategy, clearly positioning Raxio as a leader in providing world-class data center infrastructure to markets across Africa.
“Raxio is committed to building a digital Africa, and this funding gives us the runway we need to continue to execute on our strategy,” said Mullins.
Local data centers with neutral providers have a multiplier effect on domestic economies and are integral to the growth of a vibrant digital ecosystem.
These centers will help improve connection speeds, improve user experience and reduce throughput costs for Internet service providers, enabling them to offer affordable rates to end users.
EAIF’s deployment increases easy access to the digital economy for all segments of society and modern businesses, increasing productivity and developing essential skills in often overlooked secondary markets.
