IFC commits $35m to South Africa comms fund

Convergence Partners’ Africa-focused Communications Infrastructure Fund has received a welcome boost from the International Finance Corporation ahead of a planned first closing later this year. Ultimately, the fund is aiming to raise $500m.

South African fund manager Convergence Partners has received an equity investment of $35 million from the International Finance Corporation (IFC) in its Communications Infrastructure Fund, which will target the rapid development of information and communications technology (ICT) infrastructure across Africa.

According to a statement, the focus of the fund will be on addressing the lack of enabling infrastructure that provides “quality, affordable communications services” – especially broadband – in Africa. It will invest in new wholesale, open access networks and related services and will target critical services in areas such as banking, healthcare, education and government programmes that improve living standards.

The fund is aiming to achieve a first closing later this year and has an eventual target of $500 million. The statement says other investors will include local and international development finance institutions and banks.

The fund is the second to be raised by Convergence Partners, whose first fund was capitalised on R$600 million (€57 million; $71 million) and has made 18 venture capital, private equity and project equity investments in the telecoms, media and technology (TMT) sector. Investors in that fund included South African bank Nedbank and fund manager Makalani Holdings.

The IFC, a World Bank Group member, yesterday announced a tie-up with Norwegian private company Scatec Solar to develop solar power projects in Sub-Saharan Africa.