The Overseas Private Investment Corporation, the US government development finance institution, is lending $100m to telecom company Africell Holdings Limited to expand its mobile telephone and internet services in its countries of operation, particularly in Uganda and the Democratic Republic of Congo.
Africell Holdings’ local subsidiary is Africell Uganda, which started operations in November 2014 after acquiring Orange Uganda. It has the third largest subscriber base after MTN Uganda and Airtel Uganda.
Africell will use the loan to upgrade and expand its 2G, 3G, and 4G networks, fund working capital needs, and acquire a 4G licence in DR Congo, according to a public information summary published by Opic. It may also use up to $40m to refinance existing debt, the document adds.
Africell Holdings also runs telecom operations in Gambia and Sierra Leone, in addition to its local operation and that in DR Congo. However, the statement says “the project is expected to have a high developmental impact particularly in Uganda and the Democratic Republic of the Congo.”
The loan is due after eight years, including a grace period of two years. It is part of Opic’s Connect Africa initiative launched this July through which the organisation aims to “invest more than $1 billion to projects that support transportation, communications, and value chains in Africa over the next three years.”
The loan agreement was signed by Opic’s managing director for Africa, Worku Gachou and Africell’s chief investment officer, Ian Paterson. The transaction was led and arranged by Lintel Capital UK Advisors LLP, a London-based firm specialising in sub-Saharan African investments.