Deals

Amber’s UK fibre fund in maiden deal with Railpen

The pair have committed a total of €28.5m to Community Fibre, which received initial backing from Railpen a year ago.

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Amber Infrastructure’s government-backed fibre broadband vehicle has secured its first investment after committing £25 million ($34.9 million; €28.5 million) alongside Railpen to Community Fibre.

The group’s National Digital Infrastructure Fund has backed the London-focused fibre broadband company with £18 million in equity, while the railway pension scheme committed a further £7 million. Railpen initially invested £10 million in Community Fibre last July. The parties declined to disclose the equity stakes now held.

Amber is aiming “to announce further investments in the coming months”, according to Khalid Naqib, senior investment director at the group. Community Fibre is “indicative of the sorts of investments the fund wants to invest in”, a spokeswoman for Amber told Infrastructure Investor.

Amber was appointed manager of the NDIF last year as part of the UK government’s push to accelerate full-fibre broadband in the country. The NDIF can invest across both debt and equity structures, eyeing returns of between 8 and 9 percent. The Amber spokeswoman said the fund’s size currently stands at £100 million, following the initial commitments by Amber (£5 million), International Public Partnerships (£45 million) and the UK government (£50 million).

The government’s eventual commitment is for up to £150 million, with other investors being sought. The target is not disclosed but Amber, Infracapital and M&G are tasked with leveraging more than £1 billion of investments for the UK’s fibre roll-out. The Infracapital-managed Digital Infrastructure Investment Partners fund made its first and only known investment in November when it invested £35 million alongside the firm’s greenfield fund in WightFibre.

Community Fibre said the latest round of funding will be used to roll out full-fibre connectivity to a further 100,000 homes by 2019, across social and private housing estates in London. The company said last week it hopes to cover 60,000 properties in London by the end of this year as part of wider plans to provide 500,000 connections by 2022.