To expand coverage of online and mobile phone services across underserved areas of Kenya, and to reduce costs for consumers, IFC and Atlas Tower Kenya announced a partnership to support the building of up to 450 independent telecommunication towers in the country.
IFC’s debt financing package of up to $25 million, supported by co-financing from institutional investors through IFC’s Managed Co-Lending Portfolio Program (MCPP), will provide Atlas Tower Kenya, an independent provider of wireless infrastructure, the capital it needs to develop and install the towers over the next two to three years.
In one of the first emerging market transactions by a development finance institution or commercial bank, the debt facility will employ Term SOFR (Secured Overnight Financing Rate), which replaces the USD LIBOR as the benchmark reference rate. In December 2021, IFC approved Term SOFR to replace LIBOR, the London Interbank Offered Rate, to ensure a smooth transition for new offerings in light of the U.S. regulator’s direction for all lending from January 1, 2022.
Mobile network operators and other digital service providers will be able to lease space on the new towers, helping them expand coverage and reduce operating costs and costs for consumers. Less than half of the roughly 8,000 telecommunication towers in Kenya are owned by independent operators.
“We are happy to have IFC as our valuable partner in Kenya. Together, we will improve the quality, safety, and accessibility of communication infrastructure in the country. We recently added our 200th tower in Kenya and now can look forward to IFC helping us to the 500th tower,” said Nathan Foster, Founder & CEO of Atlas Tower Group.
“Expanding access to affordable, reliable mobile and broadband networks has positive impacts on both social and economic development. Telecommunications tower sharing is an emerging area for Kenya, and we believe the development planned by Atlas Tower will contribute to growing access to digital networks and to lowering costs,” said Amena Arif, IFC Country Manager for Kenya.
IFC is a leading supporter of Africa’s digital development, investing to increase access to digital infrastructure such as broadband networks and data centers, and funding start-ups, entrepreneurs, and skills development across the continent. IFC’s investment in Atlas Tower Kenya also reflects the institution’s strategy to increase competition in the digital sector globally and reduce costs for consumers.