Liquid Telecom secures $180m investment from UK's CDC
UK financial development firm CDC Group has announced an equity investment of $180million in Liquid Telecom as it continues its expansion across Africa.
Earlier this month, Liquid unveiled plans to plough $400 million into infrastructure in Egypt. Now, the pan-African telco has secured investment from UK-based CDC to expand its high-speed broadband offering to underserved communities across the African continent.
The $180 million investment one of the largest equity investments in the history of CDC,which is owned by the UK government, and its first direct investment in an African telco for over 20 years.
The goal of the investment, according to CDC, is two-fold. Firstly, it will help Liquid expanding its existing infrastructure, which includes 70,000km of fibre covering 13 African countries, in less well covered areas. This will help boost GDP in countries with low connectivity by imporiving broadband infrastructure.
The second goal is to expand networks within countries to improve access and quality of broadband services for businesses. World Bank data from 2016 show that African firms using the internet have 3.7 times higher labour productivity than non-users, according to the CDC.
According to a report by the Financial Times, the investment will give CDC around 10% stake in Liquid Telecom, which is majority-owned by Zimbabwean Strive Masiyiwa’s Econet Global.
Nick O’Donohoe, CDC’s chief executive, said: “Digital infrastructure is still a major problem for Africa’s governments, people and its businesses, so improving access to affordable and quality internet is central to Africa’s development and economic growth. Our investment in Liquid Telecom – which is one of CDC’s biggest ever investments – plays an important part in addressing infrastructure bottlenecks and helps bring about the innovation and efficiency gains that result from better internet access.
“CDC’s capital will enable Liquid Telecom to reach more countries in the continent, helping to connect millions more people and businesses. Africans have benefited hugely from the local mobile phone industry that CDC backed twenty years ago, and we have similar hopes for our investments in Africa’s growing digital infrastructure.”
For Liquid, the investment will help build on the African telco’s Cape to Cairo terrestrial fibre link, which runs from South Africa to Egypt, through all the Southern, Central, and Eastern African countries.
The terrestrial link, known as the One Africa network, was completed earlier this year when Liquid signed a deal with Telecom Egypt. The deal was the completion of a 10-year project for CEO Nic Rudnick and Masiyiwa. To find out more about Liquid Telecom's One Africa Network, check out our interview with Rudnik from our August/September issue of Capacity Magazine. To read the interview, <<
“Our vision is to give every individual on the African continent the right to be connected by bringing reliable, high-speed broadband connectivity and cloud services to all. This includes businesses and communities in some of the most remote parts of the continent,” said Nic Rudnick, group CEO, Liquid Telecom.
“We welcome CDC Group’s investment of $180m with Liquid Telecom since it will enable us to accelerate expansion along our award-winning Cape-to-Cairo route and further into Central and Western Africa. Once completed, it will bring significant economic and social benefits – from providing access to online educational resources to supporting national economies, creating more jobs and driving the adoption of new technologies. This is aligned to the vision of our Executive Chairman Strive Masiyiwa to not only connect Africa from North to South, but also from East to West.