PAIDF invests $94m in Essar Telecom Kenya(3)

The Pan African Infrastructure Development Fund (PAIDF) has invested $94 million in Essar Telecom Kenya Holdings, a subsidiary of Indian conglomerate Essar Group.

Essar Telecom Kenya Holdings has a controlling interest in Essar Telecom Kenya, which operates in Kenya under the “Yu” brand. Launched in October 2008, Essar Telecom Kenya has approximately 400,000 subscribers on its network in Nairobi and Mombasa.

The investment will be used to to complete Essar Telecom Kenya’s network rollout across Kenya by the end of next year, the company said in a statement.

Launched in July 2007, PAIDF received the backing of various African leaders, including the former president of South Africa Thabo Mbeki.

Managed by Johannesburg-based Harith, the 15-year fund has raised $625 million and is targeting $1 billion, according to its website. The fund’s investors include financial services provider Old Mutual, the Standard Bank of South Africa and South Africa’s Government Employees Pension Fund, which committed $250 million to the fund, according to a source. 

The fund focuses on public-private partnerships in the telecommunications, energy, transport and water and sanitation sectors. It typically invests between $25 million and 15 percent of its capital. The fund will not allocate more than 20 percent of its capital to one country. It will also not allocate more 30 percent to one industry or economic group of which any portfolio company is part of.

Various African countries are warming to PPPS. Nigeria is currently planning a number of PPP projects involving its Federal Housing Authority and its federal road concessions which cover a large portion of the country’s highway network. The private sector contributed almost $400 million to South Africa‘s recent $3.2 billion Gautrain commuter rail project.