EAIF Commits $33m Sustainability-Linked Debt Facility to Raxio Group
The Emerging Africa Infrastructure Fund (EAIF), which is part of the Private Infrastructure Development Group (PIDG), has given the leading pan-African developer and operator of data centers, Raxio Group, a $33 million sustainability-linked debt facility.
With this money, high-impact data centers can be designed, built, run, and managed in seven countries across sub-Saharan Africa.
In this deal, EAIF is working with Proparco as a co-arranger. Together, they will put together a $110 million debt package for Raxio to help it build up its digital infrastructure. This is in response to the urgent need for affordable internet access in the region.
Africa’s data center market is one of the fastest-growing in the world. It is a key part of the continent’s growing digital economy, which is expected to grow 57% to reach $180 billion by 2025 and $712 billion by 2050.1 The EAIF’s investment will make sure that this growth is sustainable and includes African communities and businesses. This is in line with the PIDG’s goal to reach the UN’s Sustainable Development Goal on Industry Innovation and Infrastructure (SDG 9).
In Uganda, Ethiopia, the Democratic Republic of Congo, Mozambique, Angola, Cote d’Ivoire, and Tanzania, the new Tier III quality data centers will be some of the first independent enterprise-standard data centers in these countries. The centres will add up to 11 MW of processing power and offer high-quality services for colocation and IT infrastructure.
The investment is a big step toward supporting connectivity and innovation. It also helps digital economies grow in new data center markets, making it easier for businesses with fast growth to run and get into new markets. During construction, about 1,200 jobs will be made, and an additional 120 jobs are expected after construction. After the initial rollout, EAIF and Raxio will try to expand into other African markets.
So far, EAIF’s investments in digital communications infrastructure add up to more than US$124 million of its total US$1.14 billion portfolio. The Fund’s willingness to take risks, expertise in structuring, and ability to bring in capital that wouldn’t normally go to important digital infrastructure projects in sub-Saharan Africa serve as a model for other investors who want to have a market-changing effect in frontier and developing economies.
Sumit Kanodia, Investment Director at Ninety-One, which runs the Emerging Africa Infrastructure Fund, said about the news:
“Data centres in Africa enable the growth of the continent’s digital economy and unlock innovation for digitally native communities and businesses, providing more affordable access to transformative technologies and services. Our partnership with Raxio signifies a joint ambition to narrow the digital divide in several high-potential economies by filling a vital funding gap.”
Robert Mullins, CEO of Raxio Data Centres, said: “This is a momentous milestone for Raxio, and we are very excited to have found in Proparco and EAIF the ideal long term partners, with common objectives and values. This substantial additional funding package is a resounding endorsement of what we have achieved so far and the soundness of our expansion strategy, and clearly positions Raxio as a leader in delivering world-class data centre infrastructure to markets across Africa. Raxio is committed to building a digital Africa, and this financing gives us the runway we need to continue executing our strategy.”
Local neutral-carrier data centers have a multiplier effect on local economies and are essential to the growth of a thriving digital ecosystem. These centers will help improve connection speeds, improve the user experience, and lower transit costs for internet service providers. This will allow them to offer affordable rates to end users. EAIF’s commitment makes it easier for all parts of society and modern businesses to join the digital economy. This increases productivity and builds important skills in secondary markets that are often overlooked.