Prescient Investment Management (PIM) has reached financial close with independent telecommunications infrastructure company Eagle Towers SA for the provision of a R100-million senior secured loan facility, unlocking capital to accelerate tower deployment in South Africa.

The deal, end-to-end, was an equity injection into a tower business by infrastructure investors Infra Impact Investment Managers, investing through its Infra Impact Mid-Market Infrastructure Fund, followed with a meaningful debt injection by the PIM’s Infrastructure Debt Fund, says PIM head of credit Conway Williams.

Infra Impact has been working with its portfolio company Eagle Towers to identify the most suitable funding structure for its growth initiatives.

The transaction, which closed March 9 with first draw down on March 10, will enable the small- and medium-sized enterprise to deploy more telecommunications towers, particularly in rural regions.

“We are delighted to have played a significant role in supporting Eagle Towers as they look to expand and grow their business. The successful funding round is a testament to the hard work and dedication of the respective teams, and we look forward to continuing our partnership to drive value for all stakeholders,” adds Infra Impact founder and co-managing partner Morné Edas.

“Infra Impact has been instrumental in helping us secure this loan facility, which is a critical component of our growth strategy. We look forward to continue executing on our strategy to provide mobile network operators (MNOs) with high quality tower infrastructure in South Africa,” Eagle Towers CEO Avril van Rheede said in a joint statement following the announcement.

Eagle Towers SA builds and operates physical infrastructure towers, entering into long-term contracts with South Africa’s large MNOs.

Increasingly, telecommunications companies are moving away from having towers and sites on their balance sheet and tying up their capital in these types of assets, and have started leveraging independent tower companies.

Through agreements with companies such as Eagle Towers SA, the MNOs are then able to provide telecommunication services to individuals and businesses in areas that have limited or no real connectivity.

While already well established with a portfolio of existing towers, PIM’s funding will enable Eagle Towers SA to double or even triple, over the next six to 12 months, the number of towers that it can deploy.

According to its website, Eagle Towers SA currently has 46 sites built and ready to use, 105 sites scheduled for launch in 2023 and 75 potential sites currently in development.

The tower company has a good track record and an established business model for rolling out a significant portfolio, says Williams.

PIM is now seeking to help them scale up and, in a measured manner, deploy more towers in a way that will have tangible impact on South African consumers and economic development.

“They are going to deploy towers deep into KwaZulu-Natal and rural Eastern Cape, [as well as build] towers in areas that MNO’s would not necessarily want to do because it will cost too much,” he continues.

“We are very excited about the business given its ability to provide connectivity, and importantly, also lowering of cost of access for this connectivity.”

While there has been a significant increase access to the Internet, recent studies revealed that in certain instances, poor South Africans pay up to 80 times more than the middle and upper income population for access.

“Given the known inequality in South Africa, ventures such as that of Eagle Towers may actually make a tangible impact with educational opportunities, and also in improving living and working conditions for many South Africans,” Williams comments.

This is in line with PIMs mandate: to make tangible impact across South Africa, whether it is job creation, housing, renewable energy projects or information and communication technology (ICT) access in rural areas, besides others, all linked to the Sustainable Development Goals.

“Our infrastructure fund was set up so that we can support the infrastructure efforts in South Africa, provide clients the ability to have a meaningful economic developmental impact, and, at the same time, earn commercial returns,” he tells Engineering News.

ICT is one of the key initiatives set out in the PIM’s Infrastructure Debt Fund strategy, with the firm reviewing further opportunities in the ICT space.

According to a statement by Infra Impact, its Mid-Market Infrastructure Fund 1 provides growth capital for South African focused infrastructure businesses, which own real assets that provide essential services and that have value creation potential. The Fund is deploying capital in line with the teams historically successful mid-market, value-add infrastructure strategy in the water, waste, energy, telecommunications and related sectors.