St. Pierre, Mauritius, 29 June 2021
The joint investment with AIIM and IFC will provide USD130m in funding to Eastcastle to support the company’s build-to-suit strategy in Democratic Republic of Congo, Nigeria and Côte d'Ivoire.
Adenia Partners (Adenia), a private equity firm investing in Africa, African Infrastructure Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers, and IFC, a member of the World Bank Group, have partnered to invest a total of USD130 million to support Eastcastle Infrastructure (Eastcastle), a company specializing in Africa’s telecoms tower sector.
Eastcastle was established in 2020 by Peter Lewis and Pankaj Kulshrestha, the former CFO and COO respectively of Eaton Towers. The funding will support Eastcastle’s build-to-suit strategy, to develop new telecom towers initially in the Democratic Republic of Congo, Nigeria and Côte d'Ivoire. The number of towers across the region needs to increase significantly to accelerate the deployment of bandwidth intensive technologies such as 3G, 4G and 5G by Mobile Network Operators and to increase quality of connectivity for individuals and businesses.
The deal comes amid soaring growth in data consumption across Africa, with data consumption per subscriber expected to increase fourfold by 2025, along with an expected 200 million new mobile Internet users. Mobile operators that use bandwidth intensive technologies, such as 3G, 4G and 5G are expected to account for more than 85% of connections by 2025, compared to around 38% in 2017. The growth in smartphone adoption in Africa is another factor leading to increasing demand for data, with smartphone usage set to rise to 65% of connections in 2025, up from 44% today.
Stephane Bacquaert, Managing Partner at Adenia, commented: “Eastcastle meets a clear need for additional towers as operators look to extend and upgrade their networks and boost their offering, with demand notably strong in Africa. Eastcastle will play a key role in filling infrastructure gaps, by helping networks provide coverage and services both more efficiently and over a wider area. We are pleased to partner with a deeply experienced, well reputed and highly capable team to make this venture a success.”
Ed Stumpf, Investment Director at AIIM, commented: “Investment in Africa’s digital infrastructure is more important than ever to meet rising data demand and enable Africa’s digital economy. Mobile internet has the potential to add up to USD180 billion to Africa’s gross domestic product by 2025 and, as such, a core part of AIIM’s strategy is to invest in businesses that address digital infrastructure bottlenecks and enable efficiency through infrastructure sharing. We look forward to working closely with the Eastcastle team, which brings vast experience in the sector and comprehensive capabilities in the development and operation of tower portfolios in multiple markets.”
Linda Munyengeterwa, IFC’s Regional Industry Director for Infrastructure, Middle East & Africa commented: “With almost half of the world’s population still unconnected, bridging the digital divide is a core priority for IFC. By supporting infrastructure sharing initiatives, we can help accelerate digital connectivity at a lower cost while enabling consumers to access quality services. This investment in Eastcastle is testimony to IFC’s commitment to strengthening digital infrastructure in Africa and contributing to inclusive economic growth. We are excited to join with the teams of Eastcastle, AIIM and Adenia, to work together on connecting the unconnected.”
Peter Lewis, co-Founder of Eastcastle added: “Following the success of Eaton Towers, Pankaj, myself and the team are excited by this opportunity to again be of service to our long-standing African Telecoms clients. We are especially pleased by the strong investor support received from some of the most experienced investors in African Towers and Infrastructure.”
The consortium’s advisors for the transaction were Clifford Chance (legal) and Deloitte (tax). The sponsor’s advisors were Norton Rose (legal) and Hardiman Telecommunications (Commercial). Stephane Bacquaert and Charles Boatin, Partner, will represent Adenia on the board of Eastcastle. AIIM will be represented by Ed Stumpf and Martin Edge, senior digital infrastructure advisor.
Adenia Partners is a private markets investment firm committed to responsible investing and a sustainable Africa. Founded in 2002, Adenia has successfully raised US$500 million across 4 funds. Adenia has a proven track record of strong and consistent performance with 27 platform investments executed and 16 realized exits. Based on the ground across Africa, Adenia has one of the most highly qualified African private markets investment teams in terms of educational pedigree, longstanding experience as entrepreneurs and investors, and local in-depth knowledge. By creating stronger companies with quality jobs, fostering economic improvement, and elevating companies to meet ESG standards, Adenia is increasing the enterprise value for investors, while benefiting workers, communities, and companies in Africa. For more information, please visit: www.adenia.com.
AIIM is a member of Old Mutual Alternative Investments (OMAI) and has been investing in the African infrastructure sector since 1999 with a track record extending across seven African infrastructure funds. AIIM’s team of 41 investment professionals is based out of five offices across the continent in Cape Town, Johannesburg, Nairobi, Lagos and Abidjan.
AIIM is one of Africa’s largest infrastructure fund managers, currently managing USD2 billion in assets across the renewable energy, power, digital infrastructure, midstream and transport sectors with investments in 19 countries throughout the continent. AIIM is one of the largest private investors in the power sector with power portfolio extending across renewable energy and thermal power assets with a combined generation capacity of over 2,800 MW.
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. For more information, visit www.ifc.org.
Eastcastle Infrastructure was established in 2020 by Peter Lewis, the former Group CFO and Pankaj Kulshrestha, the former Group COO of Eaton Towers (Founders), to pursue new build-to-suit telecom tower and related infrastructure opportunities initially in Nigeria, Democratic Republic of Congo and the Ivory Coast for their core existing MNO relationships. The Founders experience in building, championing and retaining locally resourced African telecom related businesses extends to over twelve African countries and has resulted in the creation of thousands of jobs for local nationals. The Eastcastle Infrastructure team has successfully structured and completed fourteen African telecoms tower acquisitions and disposals. The most recent being the sale of Eaton Towers’ operations in Ghana, Uganda, Kenya, Niger and Burkina Faso to American Tower for $1.85 billion at the end of 2019. For more information, please visit: www.ecinfras.com.
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