KENYA – The International Finance Corporation (IFC) will inject KSh2.5 billion (US$25m) into a new sea cable project that the Western Indian Ocean Cable Company (WIOCC), a company in which Telkom Kenya is a shareholder, is executing.

The investment will be in form of equity to partly fund the Sh24.3 billion (US$235m) new cable project in the east and west coast of Africa as well as development of strategically located data centres across the continent.

WIOCC has included this project as part of the capital expenditure plan for financial years 2019 to 2021, meaning the IFC funding will boost the plan whose cost was mainly to be borne by shareholders.

“IFC’s expected additionality is to provide equity not available in the market and to provide knowledge and capabilities that contribute to development impact,” said the World Bank investment arm without disclosing the stake it will hold.

According to Business Daily, Telkom Kenya owns nine percent stake in WOCC, making it among the largest shareholders.

Telco’s Managing Director for carrier services division, George Mokogi, sits on WOCC board.

Other telcos with a similar stake include Dalkom Somalia Limited, Djibouti Telecom SA, Libyan Post Telecom and IT Holding Company, Telecomunicações de Mozambique, Uganda Telecom, and Zanzibar Telecom Public Limited Company.

The private company is incorporated in Mauritius and jointly owned by 14 African telecommunication operators. The Company runs as a wholesaler, offering connectivity to over 20 countries in Africa.

The project is expected to improve the quality and affordability of broadband Internet access by increasing the capacity of network interconnection.

It will also result in higher data hosting capacity by increasing the availability of onshore data centres capacity, according to IFC.

“The project is also expected to contribute to systemic market impacts by increasing the competitiveness of the markets for broadband Internet access and digital data hosting across Sub-Saharan Africa,” said IFC.

The Alliance for Affordable Internet said in a recent report that consumers in African countries are paying some of the highest rates in the world for Internet access as a proportion of income.