IFC Invests in Sonatel's First Securitization to Expand Connectivity in Senegal
Dakar, Senegal, January 23, 2024 —To help expand reliable 4G coverage in Senegal, especially to rural and underserved parts of the country, IFC today announced anchor investments in two bonds issued by a securitization vehicle of Sonatel, a leading mobile network operator in West Africa.
Proceeds from the bonds, the first securitization in West Africa's telecoms sector, 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.
Sonatel, which operates in five countries in West Africa and is owned by Orange MEA and the Government of Senegal, will also use the proceeds to invest in new technologies.
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.
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), with the remaining amount publicly placed in the market.
"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.
"This transaction provides a replicable and scalable model to stimulate economic growth and advance digital technologies, which support efficiency, digital access and productivity across Africa," said Folatomi Fayemi, Investment Specialist at Ninety-One, fund manager of the Emerging Africa Infrastructure Fund.
"This operation could not have been such a success without the coordination and cooperation of all those involved, as well as the confidence of the reference Investors, who spared no effort in carrying out this operation and to whom we offer our congratulations and sincere thanks," said Mouhamadou Moustapha Faye speaking for a consortium formed by Invictus Capital & Finance and KF Titrisation, the arranger and management company, respectively.
"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.
About IFC
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 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
About the IDA Private Sector Window
The International Development Association's (IDA) Private Sector Window was launched in 2017 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA's objectives and the World Bank Group's twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution, and the World Bank Group's other tools and approaches are insufficient: http://ida.worldbank.org/psw.
ABOUT SONATEL
Sonatel Group provides global telecommunications solutions for individuals and businesses. The products and services offered cover areas such as fixed, mobile, internet, television, mobile data, mobile money, energy, and new related services. The diversity of its service and product offering, coupled with its dense geographical coverage, has enabled the Group to position itself as a key telecoms' player in the sub-region.
Listed on the Bourse Régionale des Valeurs Mobilières (BRVM) since 1998, the Company is the largest capitalisation with nearly CFAF 1,545 billion, representing more than 17% of the BRVM's market capitalisation on 31 December 2022.On 31 December 2022, Sonatel had more than 32.7 million customers, sales of FCFA 1.455 billion, EBITDAAL of FCFA 631.5 billion and net income of FCFA 278.9 billion. Since its creation, the company has distinguished itself by its technological excellence, its ability to anticipate and adapt to changes in its sector, its appropriate investment policy, and its management, all in the pursuit of the best customer experience.The company has a robust business with a substantial level of recurring revenues, while being diversified both geographically and in terms of business segments.
About EAIF
The Emerging Africa Infrastructure Fund provides a variety of debt products to infrastructure projects promoted mainly by private sector businesses in Africa and parts of the Levant. The Fund helps create the infrastructure framework that is essential to sustained economic stability, business confidence, job creation and poverty reduction. It has to date supported 96 closed infrastructure projects across nine sectors in over 20 African countries. As of 30 September 2023, EAIF's committed loan portfolio is $1.18bn of which $935m is disbursed and $247m is undisbursed. The portfolio consists of 58 borrowers, invested in 19 countries and across 10 sectors. EAIF is part of PIDG. EAIF was established and substantially funded by the governments of the United Kingdom, The Netherlands, Switzerland, and Sweden. It raises its debt capital from public and private sources, including Allianz, the global insurance and financial services company; Standard Chartered Bank; the African Development Bank; the German development finance institution, KFW and FMO, the Dutch development bank. EAIF is managed by Ninety-One. www.eaif.com
About the Consortium
The Consortium is formed by Invictus Capital & Finance and KF Titrisation, the arranger and management company, respectively.
KF Titrisation
KF Titrisation is a Management Company of Securitization funds registered by the Autorité des Marchés Financiers de l'Union Monétaire Ouest-Africaine (AMF-UMOA) under the number SG-FCTC/2021-01. KF Titrisation operates all across the securitization value chain, providing financial advisory services, structuration, arrangement, management and fund administration services of securitization funds (FCTCs).
KF Titrisation operates in the eight (8) country members of the West African Economic and Monetary Union (WAEMU) zone: Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
Its members are seasoned specialists with local long-standing experience. The team combines track record in arranging successful structured finance operations as well as raising funds on local and international markets. KF Titrisation is a dedicated and trustworthy partner that assists investors and sponsors in achieving their various projects. www.kftitrisation.com
About Invictus Capital & Finance
INVICTUS CAPITAL & FINANCE (ICF) is a brokerage firm (SGI) that is licensed by the Autorité des Marchés Financiers de l'Union Monétaire Ouest-Africaine (AMF-UMOA) under registration number «SGI/2019-02». The head office is located in Dakar, Senegal. ICF's purpose is to support businesses, governments, local authorities, financial institutions and individuals by providing them with tailored financial services. Acting as the broker of financial transactions across various sectors, ICF also executes financial and monetary market transactions in addition to off-marketplace transactions. www.invictuscapfin.com
