Submarine fibre optic cable project Seacom is to get a $260 million loan from the International Finance Corporation (IFC), a global development institution focused on the private sector in developing countries that is part of the World Bank Group. The loan is said to be for debt refinancing and expansion into new service lines.
The information was mentioned late last week in a disclosure by the IFC but has been more widely reported in African and international media in the past two days.
The IFC says in its disclosure, “Seacom seeks to diversify from its subsea cable operations into the enterprise service provider market across the continent and refinance its short-term debt with new longer-term debt.”
The IFC describes Seacom as a digital infrastructure company operating broadband infrastructure, including a subsea cable, a continent-wide internet protocol (IP) network, and enterprise solutions for large-scale clients.
The disclosure explains that the loan will “help Seacom to increase its enterprise services capabilities to SMEs, medium and large corporates in South Africa, East Africa and West Africa. It will also help it to leverage its fibre network spanning 21,000 km (including 17,000 km on its submarine cable) as well as its strategic alliances on the 2Africa Cable and Equiano Cable.”
As well as helping Seacom to enhance connectivity for businesses in the African region and undertake fibre expansion that will include West Africa, the investment is also intended to help Seacom to extend the life of its subsea assets with like-for-like equipment replacement.
The IFC says Seacom’s targeted growth plan will be achieved through strategic acquisitions and organic growth initiatives across its markets.
There does not yet appear to be a formal announcement from Seacom about the loan or its plans for the loan.