South African Investment Firm Set Up $250 Mln Fund Focusing on Tech In West Africa
A South African technology focused investment firm, Convergence Partners, has set up a new $250 million infrastructure fund to help bridge Africa’s widening digital divide and will focus on Nigeria and the larger west African region.
With a first close of $145 million, the investment firm is one of the largest African based infrastructure funds, not withstanding its single sector focus, BusinessDay reported. It has a targeted final close of $250 million and aims to invest in communications infrastructure and related services in West Africa.
Convergence Partners further plans to set up a West African office within the next year. The Fund also expects to generate significant returns for investors, while also enabling ICT-driven socio-economic development.
Its main partners in the venture include the International Finance Corporation (IFC), the European Investment Bank (EIB), the Dutch Development Bank (FMO), the Development Bank of Southern Africa (DBSA) and the CDC Group (CDC).
“As specialist Information Communications Technology (ICT) investors and innovators, Convergence Partners is dedicated to accelerating investment capital, digital access and ICT infrastructure development on the continent,” said Andile Ngcaba, chairman of Convergence Partners.
According to the chairman, the firm would place strong priority on initiatives that increase the availability of communications, broadband services and new technology offerings to African people.
Convergence Partners holds a 12.5 percent stake in Seacom’s project to develop an undersea telecommunications cable to link South Africa and east Africa with Europe and India, and has invested in Dimension Data, South Africa’s largest technology services provider.
According to a recent report by McKinsey posted in November, increased use of the Internet in Africa could result in a contribution of $300 billion a year to the continent’s gross domestic product (GDP) by 2025. The infrastructure, Ngcaba said, to deliver these services remains significantly underdeveloped.
The upgrading, management and ownership of existing and new infrastructure by specialist owners with private capital provides the investment opportunity for CPCIF to achieve its financial and developmental goals.
Convergence Partners’ founders are seasoned pan-African private equity players, experienced in developing value-add investments that deliver shareholder returns whilst underpinning continental transformation