Liquid Telecommunication Holdings Ltd., headquartered in South Africa, is gearing up to enhance Africa’s digital landscape with a substantial capital infusion. The company is on track to secure $225 million in equity by the end of 2024, as confirmed by CEO Hardy Pemhiwa.
A key player in this financial endeavor is the International Development Finance Corporation (IDFC), a US development agency, which is expected to be a major contributor in the upcoming investment round. The IDFC is set to be one of the most significant investors in the initial $90 million funding tranche, which is anticipated to commence in the following weeks. A subsequent installment of capital is planned for later in the year, as reported by Bloomberg News.
This fresh injection of funds is set to revolutionize the continent’s digital connectivity, providing Liquid Telecom with the necessary resources to address impending financial commitments. These obligations include a $156 million term loan and $620 million worth of bonds that are due in 2026. Back in 2021, Liquid Telecom successfully raised a financing package totaling $840 million, which comprised a $620 million bond offering and $220 million directed towards debt refinancing.
Liquid Telecom has been actively collaborating with leading US tech giants such as Microsoft Corp. and Google, a subsidiary of Alphabet Inc., to drive the expansion of broadband services across Africa. The focus is particularly on enhancing the digital infrastructure in East African regions that have traditionally been underserved.
CEO Pemhiwa has emphasized the significance of their partnership with Microsoft, which is aimed at delivering affordable broadband to 20 million individuals in Kenya and Zambia. This initiative is a strategic move to bridge the digital divide, providing communities with improved access to online education, healthcare services, and business opportunities, thereby fostering socio-economic development across the region.
Three months prior, Microsoft South Africa made a significant commitment to the South African economy by announcing an investment of R1.3 billion (approximately $70 million). This investment is part of a decade-long agreement with the South African Department of Trade, Industry, and Competition (DTIC), underlining Microsoft’s long-term dedication to fostering economic growth and technological advancement in the region.
In addition to this, Liquid Telecom is set to work in tandem with Google to construct extensive terrestrial fibre networks. These networks will span across multiple African countries, including South Africa, Kenya, Uganda, Rwanda, Zambia, Zimbabwe, and the Democratic Republic of the Congo (DRC). The development of this infrastructure is expected to significantly enhance the connectivity of various data centres throughout these nations.
Moreover, the new fibre networks will serve as a vital contingency solution to maintain internet reliability, especially in the event of disruptions to subsea cable systems, which have historically been a single point of failure for internet access in the region.
Liquid Telecom’s strategic expansion efforts are a direct response to the escalating demand for high-speed internet and robust data storage solutions across the African continent. With an impressive network of over 110,000 kilometres (68,000 miles) of fibre optic cables already deployed, the forthcoming financial boost is poised to further propel the digital economy of Africa. This initiative is particularly crucial for enhancing connectivity in some of the least connected areas of the world, thereby narrowing the digital divide and promoting inclusive access to digital services.
