Telkom Kenya has acquired a $40 million (Ksh4 billion) loan from the European Investment Bank (EIB) in a bid to expand its network, as well as increasing its market share.
The loan consensus states that Telkom will use the money to boost its 3G and 4G coverage and invest in its Fibre-to-the-Building (FTTB) network.
The finer details of how the loan will be used to achieve the aspirations and relevant time frames and/or contractors however remained wrapped.
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“The strategic support from the EIB will give impetus to Telkom’s data network expansion, that has seen Telkom consistently enhance indoor coverage, expand our 4G network, optimise our 3G network, thereby boosting our capacity to handle mobile data traffic, in response to growing customer demand,” said Telkom CEO, Mugo Kibati.
On the other hand, the Vice President of the EIB Ambroise Fayolle said that the loan is crucial for the growth of the market in Kenya.
“This loan will also benefit its fixed broadband network; a service which is widely seen as a basic need for businesses to be competitive in a global market. Our backing will help to provide potentially millions of people with access to data networks, which nowadays is a basic condition for doing business in a connected world,” said Fayolle.
The loans will be disbursed in Kenyan Shillings, to minimize the risk of currency volatility for the Bank’s counterparts.
It is part of the Ksh7.8 billion loan from EIB advanced to East African countries.
Other companies that will receive the loan include BCS Group which will receive USD 18 million (Ksh1.8 billion) to fund the deployment of fibre optic networks throughout Eastern and Central Africa, including Zambia and Uganda, as well as bordering towns in DRC, where broadband access is limited.
The Medical Credit Fund will receive USD 5 million (Ksh500 million) to invest in small players in the healthcare sectors, such as clinics, pharmacies, diagnostics centres and hospitals, so they can provide quality healthcare in undeserved region.
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The bank will invest USD 15 million in the “Novastar II” venture capital impact fund, which to back early-stage businesses. Novastar partners with entrepreneurs to actualize ideas and multiply their impact.
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