TowerCo of Africa
BIO has granted a USD 12 M loan to TowerCo of Africa Uganda (previously Ubuntu Towers Uganda), a Ugandan solar-powered telecom tower company and a subsidiary of Tower of Africa.
Amount
$ 12,000,000.00
Type of investment
Debt
Development impacts
- Local economic growth
- Private sector consolidation/innovation
- Access to basic services & goods
Beneficiary locations
Investment field
Infrastructure
Activity
TowerCo of Africa Uganda (ToA Uganda) has secured USD 40 million long-term financing from the European development finance partners, including the European Investment Bank (EIB), the Development Bank of Austria (OeEB) and Belgian Investment Company for Developing countries (BIO), to significantly improve mobile phone network covers in coverage in rural areas of Uganda, unlocking digital empowerment and economic advancement.
Founded in 2020, Towers Uganda Limited builds, deploys, operates and rents telecom towers to Mobile Network Operators in Uganda. It aims to support digitalisation in the country by offering solar-powered telecom towers, allowing the largest operators to expand their network and provide a better coverage in rural areas.
TowerCo of Africa Uganda is part of the Tower of Africa Group, a fully owned subsidiary of pan-African telecommunications service provider Axian Telecom. Over the course of the last decade, TowerCo of Africa has steadily expanded its African operations to meet the growing demand for a better-connected Africa.
Development impacts
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Local economic growth
Employment Effect: Creation of new employment opportunities of 3,500+ jobs to the local population both directly and indirectly by 2025, through employment of both skilled and unskilled labour. Local employment is also increased due to positive spillover effects of the digitalization across sectors.
Improved Infrastructure for SMEs: The rollout of ToA Uganda’s infrastructure will support the country’s transition to a digital economy, resulting in wide-ranging socio-economic benefits and the deployment of services (banking, education, health, etc.) benefiting Ugandan consumers and SMEs.
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Private sector consolidation/innovation
Network expansion: ToA Uganda's rollout plan, with the objective to cover 95% of the country, is enabling telecommunication infrastructure with economic gains and opportunities at macro- and micro-level levels stemming from network coverage expansion. At least 50% of the towers will be located in rural areas, while the rest will provide additional capacity in areas where the current mobile networks are saturated.
Competition: Ubuntu’s entry introduced competition in a market, allowing new operators to benefit from reduced barriers to entry (via colocation) and better terms (pricing, quality, etc.). Those benefits will indirectly advantage the end-user via better affordability and quality of the telecom services.
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Access to basic services & goods
Through its business and in line with the government’s strategy to facilitate network access to 100% of rural areas, Ubuntu contributes to the digitalization of Uganda, focusing on underserved areas. The resulting growth in connectivity enables individuals to access an array of life-enhancing services (access to banking, education, health, etc.), especially in hard-to-reach rural areas3.
E&S Impact
BIO, together with the other lenders, will support ToA Uganda in formalizing its Environmental and Social Management System. In particular the project will allocate responsibility for social risks beyond Health & Safety and upgrade its stakeholders’ engagement policy. Also, ToA Uganda will strengthen the requirements towards its contractors in terms of working conditions and will undergo an external evaluation of the working conditions on its construction sites.
Situation at the time of investment
ToA Uganda has a very structured approach towards its operations, with policies and procedures covering the main risks it is exposed to. Health and safety, in particular, is taken very seriously and monitored daily.
Risk Category: B+
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