Malawi’s Open Connect gets debt funding from IFC for expansion
International Finance Corporation (IFC), the private-sector investment arm of the World Bank, will extend a $10 million loan to Malawian fibre network provider Open Connect Ltd (OCL) to support its growth plans.
This debt funding will complement equity investments into OCL, and will be geared toward its capital expenditure programme for the next two years, IFC said in a disclosure.
The loan will be in addition to an International Development Association-Private Sector Window blended finance subordinated loan facility of a similar amount that IFC will extend to the company.
IFC is one of the most active private investors in the developing economies of Africa and Asia. It makes both direct debt and equity investments in companies operating across the continents. It also acts as a limited partner to private equity and venture capital funds that invest in these countries.
OCL was established in 2016 as part of a restructuring of Malawi Telecom Ltd and privatised via a competitive bidding process. The company is now controlled by Harith General Partners, a pan-African fund manager that has assets worth more than $3 billion under management.
Harith General’s Pan-African Infrastructure Development Fund II owns a 60% stake in the company. Other shareholders of OCL are Press Corporation Ltd (22%), Old Mutual Malawi (15%), the Malawian government (2%), NICO Holdings (1%) and Investments Alliance (0.2%).
OCL owns and operates the largest fibre network in the country, nearing 3,800 km, which covers all four regions of Malawi. Since the country is landlocked, the network connects internationally via Mozambique and Tanzania, with a direct connection to two submarine cables.
The company provides fibre services to mobile network operators, internet service provider and terrestrial TV broadcasters in Malawi.
OCL will use the IFC funding to lay out a fibre network within Malawi, build a data centre, provide internet services and fund its working capital requirements.
The fibre network will initially serve 13,000 homes and 7,000 businesses in targeted clusters across four Malawian cities including Blantyre, Lilongwe, Mzuzu and Zomba. The proposed data centre is to come up at Lilongwe.
