The International Finance Corporation committed $35 million to Convergence Partners Communications Infrastructure Fund, a $500 million vehicle that will target investments in Africa’s communications sector, the development institution announced in a statement last week.
The fund is managed by Convergence Partners Management, a South African firm that focuses on investments in the technology, telecommunications and media sectors. The vehicle will invest in information and communication technology infrastructure in Africa, a relatively undeveloped sector in the region, according to IFC documents.
The lack of communications infrastructure creates a bottleneck for growing business, the IFC said. That inability to grow is further complicated by a lack of available financing in the region.
In its original investment proposal, the IFC said it was considering a commitment of up to $45 million. It is unclear what led to the organisation to opt for a smaller commitment size.
The IFC could not be reached for further comment at press time.
The vehicle is expected to have a first close later this year. Other investors will likely include local and international development finance institutions and banks, according to a statement.
Convergence is led by Andile Ngcaba, Brandon Doyle, Idan Segal and Stefan Ferrara. The firm was founded in 2006 and is headquartered in Johannesburg. In addition to private equity, Convergence also deals in early stage, venture, expansion and project equity investments.
The IFC is a member of the World Bank Group, a global development institution focused on the private sector.
Last week, fellow development finance agency the Overseas Private Investment Corporation made a similar investment in Medu Capital’s $300 million fund, which will invest in small and mid-market enterprises in South Africa and other African countries.