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Investment management fund Convergence Partners has launched its Convergence Partners Communications Infrastructure Fund (CPCIF), with US$145 million dedicated to the information and communications technology (ICT) sector in Africa.
The fund, which has a targeted final close of $250 million, will now begin investing in information and communications technology (ICT) projects and businesses across the region, with regional hubs being established in Southern Africa, East Africa and West Africa.
Andile Ngcaba, chairman of Dimension Data Middle East and Africa chairman, the main shareholder of Convergence, said:
We focus strongly on initiatives that increase the availability of communications, broadband services and new technology offerings to African people. The launch of this fund will enable us to achieve these objectives on a greater scale.
Convergence Partners CEO, Brandon Doyle said:
Based on World Bank data, we estimate that there is an ICT infrastructure deficit of US$20 billion a year in Africa. The evolution of the ICT landscape, with its increasing focus on shared, open access models, provides significant investment opportunity for a specialised infrastructure fund.
Several sources indicated that the plan is to invest one-third of the found in early stage businesses or in greenfield developments. A further third of the money will be invested in buying infrastructure from operators and changing the business model to one based on open access serving multiple companies. The rest will be used for acquisitions.
The new fund, enjoys financial backing from the International Finance Corporation, the European Investment Bank, the Dutch Development Bank, the Development Bank of Southern Africa and the CDC Group.