ECP pumps $25m into East African telco

The investment has been made as the firm raises its third pan-African vehicle, which is targeting $1bn.

Emerging Capital Partners, the Africa-focused private equity firm, has made a $25 million investment in Wananchi Group, a provider of pay television and broadband internet services in Kenya and Tanzania. The investment was made from ECP’s third fund, according to a source with knowledge of the firm, which is currently being raised with a target of $1 billion.

ECP Africa Fund III has so far garnered commitments from limited partners such as UK government fund of

Zuku: part of the next 'game changer'?

funds CDC Group, which has committed $100 million, and US development agency the Overseas Private Investment Corporation, which has committed $60 million. Other LPs include Swedish government-owned fund of funds Swedfund and the African Development Bank.

ECP declined to comment on the fundraising process.

The $25 million investment in Wananchi will be used to upgrade and expand the company’s existing network infrastructure, enabling it to provide East Africa’s first “triple-play” service, consisting of digital pay television, high-speed Internet and voice-over-IP services.

Wananchi was formed in 2007 by East Africa Capital Partners (EACP), a private equity firm that focuses on telecoms media and technology investments throughout greater East Africa. EACP created Wananchi through the acquisition of several smaller companies.

Wananchi operates a consumer facing cable television and broadband Internet service under the Zuku brand and serves corporate clients with internet and virtual private network services under the brand SimbaNET.

“Following on the tremendous growth in African mobile penetration over the last 10 years, we view broadband and related services as the next ‘game changer’ in African telecom,” said Tom Gibian, chief executive officer of ECP, in a statement.