EAIF anchors successful local currency bond issue to upgrade Senegal’s digital infrastructure

Sonatel is the telecommunications market leader in Senegal and in Mali, Guinea, Guinea-Bissau and Sierra Leone. In July 2020 it raised its target XOF* 100 billion of new capital via a local bond issue. Sonatel is using the bond proceeds to extend and enlarge its 4G + network in urban and rural areas, in Senegal, and renew and upgrade service platforms. The company is also investing in new activities including off-grid energy, digital banking and multimedia content. EAIF acted as an anchor investor in the bond issue, by committing to up to XOF 29.4bn (USD 50m) to the transaction. EAIF was able to scale back its original commitment to XOF 15bn when it was clear that private sector investors in the region were subscribing to the bond.

Sonatel’s bond came to market as the world entered its six month of the Covid-19 crisis. Global financial market sentiment was uncertain. Locally, there had been no recent large investment opportunities from which to judge market confidence. In anchoring the bond issue, EAIF not only committed to invest up to US$50 million, but also gave the private sector investors greater confidence in the bond and Sonatel than might have been the case without a core investor of EAIF’s standing.

Commenting on behalf of Sonatel, Chief Executive Officer, Sekou Drame, said;

“We are pleased to have EAIF and PIDG involved in supporting us in delivering Sonatel’s vision. We are driven by innovating to improve the customer experience and enhancing digital inclusion in all its forms, socially, commercially and, via Orange Money, financially. Covid-19 has accelerated and highlighted the vital importance of digital infrastructure to economic development.”

IMPAXIS Securities was the sole arranger and book-runner on the bond issues. Its CEO, Ababacar Diaw, said;

“The Fund brings specialist knowledge of infrastructure finance. It knows the African telecommunications sector well and takes a patient, long-term view of economic development.”

*XOF is the currency designation for the West African Franc (CFA) which is used by eight West African states; Senegal, Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger and Togo. CFA means Communauté Financière d’Afrique (Financial Community of Africa)