In a new development, one of the leading telecom players, Bharti Airtel’s Africa arm is all set to raise $194 million via debt from International Finance Corporation (IFC). IFC is an international financial institution that offers investment, advisory, and asset management services to encourage private-sector development in less developed countries and is a member of the World Bank Group. The money will be raised to fund the telco's Capex needs of key subsidiaries and refinance existing loans.
The Need for Funding
Washington based IFC will be investing a direct $ 150 million in the debt financing package of Airtel Africa Plc whereas an additional $44 million will come from its Managed Co-Lending Portfolio Program (MCPP). IFC has issued a disclosure on its website which states that the proposed investment is to support Airtel Africa’s network investment across seven subsidiaries as well as refinancing its existing loans. The disclosure from the World Bank’s private sector arm state that IFC will support the (Airtel Africa) project with a debt package of up to $150 million from its own account and up to $44 million in mobilisation from MCPP funds.
According to the report from ET Telecom, Airtel Africa hasn’t responded as of now on the situation. Airtel Africa’s Capex and loan refinancing needs include seven major markets – Kenya, Chad, Democratic Republic of Congo, Madagascar, Niger, Republic of Congo and Zambia and the IFC funding will support the telco in all these regions. It is to be noted that the African unit of Airtel has seen significant growth in its business in the last few years. It was also made part of the FTSE 100 Index in end-January.
Airtel Africa in 2021, was able to close a string of deals, aggregating $500 million, as part of its continued pursuit of strategic asset monetisation and investment opportunities. Notably, the company aims to explore a potential listing of its mobile money business within the next three-to-four years. Moreover, the telco also managed to complete its full year of profitability in FY18 which can be called a turnaround as back in 2010, Bharti Airtel had serious doubts about going back into the continent. Airtel Africa Plc was also listed on London Stock Exchange in late-June 2019.
