Telecommunications giant, Airtel Africa, has signed a $125 million revolving credit facility with an investment banking group, Citigroup Inc. through its branch offices/subsidiaries in sub-Saharan Africa.
In the disclosure signed by Simon OHara, Group Company Secretary titled, ‘Airtel Africa’s First Sustainability-Linked Loan Facility, O'Hara said: "Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, today announces the signing of a $125 million revolving credit facility with Citi through its branch offices/subsidiaries in sub-Saharan Africa."
He added that "this facility aligns with our strategy to raise debt in our local operating companies and will include both local currency and US dollar-denominated debt. The facility has a tenor up to September 2024 and will be used to support Airtel Africa’s operations and investments in four of its subsidiaries."
The facility provides potential interest rate savings in exchange for achieving social impact milestones relating to digital inclusion and gender diversity, with a focus on rural areas and women, and aligning with the Group’s sustainability strategy launched in October 2021.
The credit facility will include local currency debt and debt denominated in US dollars. It will fund Airtel’s operations and investments in four of its subsidiaries.
A credit facility is a corporate loan that allows the borrowing business to take out money over an extended period rather than reapplying for a loan each time it needs money.
They offer businesses an alternative way to raise money. In essence, a credit facility lets a company take out an umbrella loan for generating capital over an extended period of time.
Earlier in 2022, Airtel Kenya purchased 60 MHz of additional spectrum from the Communications Authority of Kenya, for a gross consideration of $40m. And 58 MHz spectrum from the Democratic Republic of Congo for $58 million. The telco giant had signed a similar deal in Nigeria with the acquisition of a 10MHz spectrum in the 900MHz for $94m in 2020.
The firm operates in 14 countries in Africa, primarily in East, Central and West Africa. Airtel Africa is owned by the Indian communication services company, Bharti Airtel.
Airtel Africa has a customer base of 128.4 million, up 8.7%, with increased penetration across mobile data (customer base up 15.2%) and mobile money services (customer base up 20.7%). NIN/SIM regulations in Nigeria impacted customer growth in H1, but then returned to strong growth, adding 4 million customers in Nigeria during H2'22.