The International Finance Corporation (IFC) announced today that it invested in a new fund by Convergence Partners Africa, an investment management firm focused on the technology, media and telecom sectors in Africa.
The investment aims to help strengthen 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 of $25 million 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. The fund has a target size of $250 million. IFC invested in Convergence Partners’ previous fund, Convergence Partners Communication Infrastructure Fund.
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 centers, adding new connectivity and data center capacity in many countries in Africa where such infrastructure is currently limited.
“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. 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. Africa is ready for high throughput pervasive fibre networks, independent hyperscale data centers, 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,” said Andile Ngcaba, Chairman of Convergence Partners.
Internet access in Africa relies largely on mobile networks. Mobile broadband penetration stands at only about 34 percent 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 percent of urban households having access to the Internet compared to only six percent in rural areas, according to the International Telecommunications Union.
“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,” said Makhtar Diop, IFC’s Managing Director.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.
Convergence Partners was founded in 2006 and invests as value-adding partners into private equity and infrastructure opportunities in technology and digital sectors across sub-Saharan Africa. They have an asset base in excess of $400 million across Southern, East and West Africa through three funds – Convergence Partners Investments, Convergence Partners Communications Infrastructure Fund and the recently launched Convergence Partners Digital Infrastructure Fund.