EAIF commits $33 million to Raxio Group in vital boost to Africa’s nascent data markets
The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, has committed a $33 million sustainability-linked debt facility to Raxio Group, a leading pan-African data centre developer and operator. The funding enables the design, construction, operation, and management of a series of high-impact data centres in seven countries across sub-Saharan Africa.
EAIF is acting as co-arranger on the transaction alongside Proparco, with whom it will mobilise a $110 million debt package to Raxio to further develop digital infrastructure – responding to the urgent demand for affordable internet connectivity in the region.
Africa’s data centre market is among the fastest growing in the world and is a key pillar of the continent’s burgeoning digital economy, which is expected to grow 57% to reach $180 billion by 2025 and $712 billion by 2050.1 EAIF’s investment will ensure that this growth is sustainable and inclusive for African communities and businesses, in line with the PIDG ambition to achieve the UN’s Sustainable Development Goal on Industry Innovation and Infrastructure (SDG 9).
The new Tier III quality data centres in Uganda, Ethiopia, the Democratic Republic of Congo, Mozambique, Angola, Cote D’Ivoire and Tanzania will be some of the first-ever independent, enterprise-standard data centres in these countries. The centres will provide up to 11 MW of additional processing power, delivering high-grade colocation and IT infrastructure services.
The investment marks a significant step towards supporting connectivity and innovation and stimulates the growth of digital economies in nascent data centre markets, fostering an enabling environment for fast-growth businesses to operate and access new markets. Approximately 1,200 jobs will be created during the construction phase, with an additional 120 jobs anticipated post-construction. After the initial roll-out, EAIF and Raxio will target expansion into further African markets.
To date, EAIF’s digital communications infrastructure investment portfolio represents over US$124 million of its total portfolio of US$1.14 billion. The Fund’s risk appetite, structuring expertise and ability to attract capital that would not otherwise flow to critical digital infrastructure projects in sub-Saharan Africa provide a model for other investors seeking to create market-shaping impact in frontier and developing economies.
Commenting on the announcement, Sumit Kanodia, Investment Director at Ninety One, the fund manager of the Emerging Africa Infrastructure Fund, said: “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 centres have a multiplier effect on domestic economies and are integral to the growth of a vibrant digital ecosystem. These centres will help improve connection speeds, enhance user experience, and reduce transit costs for internet service providers, enabling them to offer affordable tariffs for end consumers. EAIF’s commitment expands the ease of access to the digital economy for all segments of society and modern businesses, enhancing productivity and developing critical skills in secondary markets often overlooked.