Sonatel, owned by Orange MEA and the Government of Senegal, which operates in five countries in West Africa, has raised funding from IFC to help expand reliable 4G coverage in Senegal, especially to rural and underserved parts of the country.
Through two bonds issued by a securitization vehicle, the funds will support Sonatel’s expansion of 4G coverage and fiber connectivity in rural parts of Senegal, increase bandwidth, and improve digital infrastructure, supporting job creation, including in the digital economy.
“I would like to thank all the subscribers, both national and international, who have once again responded to the request of the leading market capitalization via the West African Economic and Monetary Union (WAEMU) Regional Financial Market by securitizing its receivables in an increasingly difficult global and regional economic context,” said Sékou Drame, Chief Executive Officer of Sonatel Group.
IFC invested XOF 25 billion (about EUR 38 million) in the two bonds out of the total XOF 75 billion, representing a third of the total issuance in Senegal’s local currency while the Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, the co-anchor investor, invested XOF 23.5 billion (EUR 36 million).
“IFC is proud to support the first ever securitization in the telecoms sector in West Africa. Through this partnership, we will help reduce the digital divide and position Senegal as a hub for digital transformation in the region, providing new growth opportunities for stakeholders and creating thousands of jobs in the telecoms sector,” said Olivier Buyoya, IFC Regional Director for West Africa.
At the end of the subscription period on January 12, the total subscriptions mobilized from investors excluding IFC and EAIF amounted to XOF 26.5 billion. This includes 57 percent from investors in Senegal; 42 percent from investors in the WAEMU zone (excluding Senegal), and 1 percent from investors outside the WAEMU zone.
The transaction garnered interest from a diversified pool of participants including banks, individual investors, pension funds, and insurance companies, among others.
This project falls under the World Bank’s Joint Capital Markets Program (J-CAP) to develop and deepen WAEMU’s capital market. J-CAP’s work in WAEMU is supported by the governments of Germany and Norway.
IFC’s investment will also be supported by the International Development Association (IDA) 20 Private Sector Window Local Currency Facility, which helps provide longer-term local currency funding that is not readily available in the market.