38381 - WIOCC Investment

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Summary of Investment Information

Project Number

38381

Company Name

WEST INDIAN OCEAN CABLE COMPANY LTD

Date SPI Disclosed

Sep 6, 2016

Country

Africa Region

Region

Africa

Projected Board Date

Oct 6, 2016

Environmental Category

C - No Impact

Status

Completed

Last Updated Date

Dec 3, 2021

Department

TMT, Venture Capital & Funds

Industry

Telecommunications and Technology

Previous Events

Approved : Nov 2, 2016
Signed : May 1, 2017
Invested : May 25, 2018

Sector

Cable and Broadband

Project Description

Western Indian Ocean Cable Company Ltd. (“WIOCC” or “the Company”) was incorporated in 2007 and is an existing IFC client. The Company is a neutral carrier of carriers, offering connectivity to over 20 countries in Africa. It provides telecommunication carriers with regional and international capacity into and out of Africa. WIOCC services include: point-to-point connectivity between locations on its global network, IP Transit and colocation services for ISPs.

IFC will be providing a financial package of up to US$20 million to fund the ongoing regional expansion of the Company. WIOCC plans to expand and augment its network in the region through the acquisition of additional capacity in Africa, increase connectivity to other fibre optic systems, upgrade its capacity on the EASSy cable and purchase network equipment.

Associated Advisory Engagement

No associated advisory services engagement.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

Development Impact

(i) Infrastructure Sharing: This project involves buying capacity from already existing terrestrial fibre cables, thus maximizing efficiency. WIOCC as well as the owners of the fibre cables benefit from this project as their revenues will increase as a result of the wholesale of connectivity. Additionally, by leveraging on existing infrastructure, the project has minimal to no impact on the environment thus, unlikely to create E&S risks.
(ii) Reduced pricing and increased competition: Africa has the highest connectivity costs in the world and WIOCC significantly reduces this cost through the provision of competitively priced high bandwidth connectivity. WIOCC operates on an open access basis and competition in the broadband sector has led to increased broadband penetration, sector growth and service innovations.
(iii) Productivity Enhancement: Broadband impacts productivity, enhances financial inclusion, promotes new business models, increases commercial reach and leads to improvement in social sectors such as governance, education, health etc. According to the World Bank Group, a 10% increase in broadband contributes to a 1.5% increase to GDP.
(iv) Demonstration Effect: Most African economies are experiencing macro-economic volatilities leading to reduced private capital inflows and limited liquidity in the markets. Through the project, IFC will demonstrate its continued confidence in the potential of Africa and could catalyze further private investments to the region.

(i) Strengthen partnership with an existing client - Continued support to the Company by strengthening the long-term partnership with WIOCC as the Company continues to solidify its presence in the region.
(ii) Extend a long-term debt facility: The volatility of the macro-economic environment in a number of economies in Africa has limited liquidity in the market. IFC will play a counter-cyclical role and support the client through the extension of long term debt with covenants that fits WIOCC''s growth profile.
(iii) Strengthen regional integration - With IFC''s support, WIOCC will help to further integrate Eastern and Southern African countries via its high quality extensive fibre optic network and shared infrastructure. Through this project, it is expected that WIOCC will be able to increase connectivity between 12 cities in the region and increase the capacity of the EASSy Cable.

E&S Category Rationale / Risks and Mitigation

This is a Category C project according to IFC''s Environmental and Social Review Procedure, as the project involves a low level of environmental and social (E&S) risk. The principal Performance Standards (PSs) applicable to the project are PS1 and PS2. WIOCC plans to use software solutions and to purchase off-the-shelf equipment to expand and augment its network, increase connectivity, and upgrade its capacity on the EASSy cable – and this entails a low level of E&S risk. WIOCC in its role as the largest consortium member of the EASSy cable, participates in repair decisions in respect of cuts in the cable which occasionally need to be repaired (on average once a year), for which there is a low level of E&S risk and impact in bringing together the cut ends of the cable. When this occurs, WIOCC will be required to submit incident reporting to IFC. Otherwise, the key E&S issues in this project are in the management of human resources – and this entails a low level of E&S risk. To manage E&S risk in this project, WIOCC has developed and implemented a set of human resources policies and procedures consistent with IFC Performance Standards, with which WIOCC will be required to comply.

Contacts

For Inquiries About the Project, Contact

Chris Wood - CEO
West Indian Ocean Cable Company Limited,
Level 2, Alexander House, Silicon Avenue
Ebène Cybercity 72201 , Republic of Mauritius
Telephone: +254 20 4212000
http://www.wiocc.net

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
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Local Access of Project Documentation

West Indian Ocean Cable Company Limited,
Level 2, Alexander House, Silicon Avenue
Ebène Cybercity 72201 , Republic of Mauritius
Telephone: +254 20 4212000
Email: mailto:info@wiocc.net
http://www.wiocc.net

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