Folatomi Fayemi Discusses Investment Strategy in African Digital Infrastructure

La Tribune Afrique: Your fund adopts an approach known as “digital clusters”, which goes beyond financing isolated projects to encompass telecommunications towers, fiber optics, and data centers simultaneously. How does this approach concretely reduce the final cost of internet for the African consumer?

Folatomi Fayemi: As you rightly pointed out, we do have a digital cluster strategy within the EAAIF fund – the Emerging Africa and Asia Infrastructure Fund.

We operate based on an integrated three-layer model: the passive layer (towers), the active layer (connectivity and fiber), and the storage layer (data centers). We also work with major groups such as mobile network operators (MNOs). This systemic vision helps prevent duplication of infrastructure, which historically has been a major cost factor in telecommunications in Africa.

Secondly, inspired by the model promoted by the World Economic Forum, we prioritize shared infrastructure. This allows mobile operators to significantly reduce their capital expenditure, resulting in a decrease in the final cost of data for the African consumer. By supporting the passive aspect, for example, we create the conditions for infrastructure sharing that frees up capital for operators and reduces costs.

The third point is not directly related to costs, but concerns the overall viability of the ecosystem. By supporting players operating on these three layers simultaneously, we create more diversified cash flows that strengthen the solidity of the entire value chain. This makes services more affordable in the long term and facilitates operators’ ability to offer sufficiently competitive services.

During the Davos Forum, you mentioned wanting to shift Africa from being a technology consumer to a producer. Looking at your investment portfolio, you finance companies listed in London or New York and support firms building servers that are foreign-owned. Do you not feel that you are bringing in capital for imported hardware? What portion allows you to claim that you are creating value in and for Africa?

The central objective is indeed to transition Africa from being a technology consumer to a producer. That’s why through its cluster strategy, EAAIF supports African companies throughout the production value chain.

This is illustrated by Africell, an African company for which we were the sole anchor investor during its first issuance on the market. Another example is Axian Telecom, a company with origins in Madagascar and now operating in several African countries.

In the telecom sector, there are equipment imports required, but our role is not to directly finance these imports. We finance companies and their projects – their capital expenditure and infrastructure. This is our primary level of intervention.

The second level, equally important, is local data hosting. By financing data centers – such as our investment in Raxio – we contribute to ensuring that African data is stored in Africa, in line with the growing demands of digital sovereignty. This also limits data transfers abroad.

The third level is the innovation ecosystem. These investments provide the necessary computing and storage capacities for local tech companies. And fiber, by connecting African countries to the rest of the world, is crucial for internet reliability and the competitiveness of mobile operators.

You mentioned creating an artificial intelligence ecosystem in Africa. However, in markets like the Democratic Republic of Congo or more broadly in Central Africa, energy stability remains a significant challenge. As an investment analyst, do you sometimes feel that your commitments to tech and local production are detached from an energy reality that lags behind?

You are raising a question that goes beyond just artificial intelligence or renewable energy: it’s about infrastructure in Africa as a whole. The EAAIF fund exists precisely to invest in these infrastructures and have a sustainable impact on the continent.

The link between energy and digital is strong, and we are fully aware of this. To date, the fund has invested over $500 million in renewable energies. We understand this challenge and we are addressing it.

Among our innovative projects, Walo Solaire – recently launched in Senegal – is the first solar storage and frequency regulation solution in the country. We have concrete solutions in the energy and digital areas.

AI is certainly a buzzword at the moment, but it’s a reality that is rapidly spreading worldwide and will reach Africa. In the context of sustainable infrastructure, we aim to build scalable foundations capable of absorbing these future transitions. We have assets invested in both sectors – energy and digital – and some projects combine the two, such as Raxio which integrates on-site renewable energies and high-efficiency cooling systems.

You primarily provide private credit, which is more agile but also perceived as more expensive than traditional bank credit. Do you not feel that this slightly more expensive credit ends up supporting premium investments that cannot reach the average African consumer, and therefore do not promote inclusion in African digital markets?

This is a very good question. First of all, it is important to clarify that we are not in competition with banks – we are complementary. Our intention is not to displace local banks; on the contrary, we seek to create an ecosystem that includes them in financing.

Furthermore, EAAIF is an impact fund. We provide loans with maturities that sometimes extend up to eighteen years, which far exceeds what most banks offer. We bring what is known as patient capital, tailored to emerging markets.

In addition to traditional loans, we sometimes act as a lead investor in the market, to signal trust, attract other private capital and local banks, and deepen the market. This is not about creating a premium bubble; it’s about building an ecosystem.

We intervene especially where banks are not yet ready, and as soon as we can integrate them into our operations – as lead investors or in syndicated loans – we gladly do so.

La Tribune Afrique: The Sonatel operation was a remarkable anchor – you provided resources to an African company in local currency. Is this an approach you can repeat? What conditions make you confident to replicate this type of operation, as the UEMOA region prepares to accommodate more?

We have already completed several transactions in local currency in the UEMOA zone. We supported Sonatel during its initial bond issuance on the regional market, as a lead investor. We also supported the Port Autonome de Dakar.

We structured one of the zone’s first securitizations in the form of a social bond – the FCTC PEPT – with a secondary opinion from Moody’s. Then we executed the first use of securitization by Sonatel, followed by a similar second operation. This was the region’s first digital securitization.

All this demonstrates our ability to replicate such structures. We continue to expand in local currency, while ensuring the depth of the market and the emergence of new players.

Local currency financing is essential to shield digital infrastructures against exchange rate volatility. It is crucial for issuers to have a mix of financing: local currency and foreign currency according to their needs. We play on both fronts – country-specific transactions, but also multi-country or pan-African operations, as with Axian Telecom.