Business
Convergence Partners launches $145 million African Infrastructure Fund
Andile Ngcaba – Founder and Chairman Convergence Partners
Convergence Partners a South African-based investment group, founded and headed by serial entrepreneur Andile Ngcaba, has launched a US$145 million fund that will invest solely in information and communications technology (ICT) infrastructure across sub-Saharan Africa, it said on Wednesday.
According to Ngcaba, the fund would be invested in areas such as the installation of fiber-optic cable, high-speed wireless networks, satellite and spectrum-related infrastructure. Investment in infrastructure will enable access to high-speed communications services, and boost innovation and the economy.
According to a report by McKinsey, 16 percent of Africa’s 1 billion people are online today, but that share is rising rapidly as mobile networks are built and the cost of Internet-capable devices continues to fall. The report further says increased use of the internet in Africa could result in a contribution of US$300 billion a year to the continent’s gross domestic product (GDP) by 2025.
Ngcaba revealed that Convergence Partners Communications Infrastructure Fund would invest in both existing companies focusing purely on infrastructure, and in greenfield infrastructure opportunities. The fund is targeting a final close of US$250 million. It will look to deploy capital in cross-border opportunities as well as within individual countries.
“We are great supporters of open access, we need to invest in more infrastructure to allow for an open-access model,” Ngcaba said.
A wholesale open-access model will stimulate competition and create opportunity for more companies to provide services.
Convergence Partners executive Brandon Doyle said: “Based on World Bank data, we estimate there is an ICT infrastructure deficit of US$20 billion a year in Africa. The evolution of the ICT landscape, with its increasing focus on shared, open-access models, provides significant investment opportunity for a specialized infrastructure fund.”
