Axian Telecom

• Direct (Bond Financing, 2022): Our initial bond financing in 2022 allowed Axian Telecom to expand its footprint and increase customers' access to affordable mobile and data services, including in rural regions and among lower-income demographics across Sub-Saharan Africa. The company's expansion into underserved markets should disrupt monopolistic pricing policies and dated product offerings and improve vital digital infrastructure such as fibre optic cables, towers and subsea cables.

• Direct (Loan to TowerCo of Africa, 2024): Our 2024 facility has been earmarked to fund the construction of 200 telecom towers in Tanzania. This will bring new mobile network capacity to uncovered areas or covered areas that require additional capacity. Higher tenancies on towers increase available capacity and competition in these locations, improving access, quality and possibly affordability.

• Economic enabler: Our investments will enable greater coverage and better service quality which enhances firm productivity and supports economic growth.

• Catalysing markets (Bond Financing, 2022): As an anchor investor we can crowd in and mobilise institutional capital, operating in telecommunication markets that are less familiar to bond investors. A successful bond issuance from an impact perspective means that the majority of the capital raised has come from institutional investors.

Tanzania, sub-Saharan Africa

• Tanzania: 85% SIM penetration; only 32% of the population have access to the internet with a 3G/4G network; and only 1 out 5 of the ICT price indicators are within the UN affordability target suggesting that a large majority of customers are only able to afford a monthly minimum allowance of 70 voice mins and 20 SMS. The fibre backbone and tower extensions will benefit those in less well-served locations and improved coverage is planned for the regions with the highest poverty levels.

Tanzania, sub-Saharan Africa

Employees of businesses are likely to experience productivity benefits through faster internet speeds. This is likely to mostly include urban and larger-scale businesses.

(1) By 2025, the 2022 bond investment is expected to add 3 million new subscribers in Tanzania. The bond is expected to have an impact in other SSA markets where the bond proceeds are invested.

(2) The 200 new sites funded through our 2024 facility will significantly increase coverage, particularly in rural regions. They are strategically placed across the mainland and Zanzibar and will link previously isolated populations which will help to improve the lives of up to 600,000 people.

Impact will be deeper for new subscribers that previously have not had access to mobile or data services - these are likely to be lower-income individuals and population segments in rural areas. Individuals that are already connected will experience improved quality.

The duration of this impact should be lasting with a maintained increase in GDP. Impact will be deeper for employees of firms that are more reliant on the internet for their operations.

2022 Bond financing

• Financial additionality: Anchoring a bond to mobilise a greater quantity of commercial capital.
• Mobilisation: Expected that at least 70 per cent of total bond raise will come from institutional investors. The presence of development finance institutions (DFIs) acting as anchors sends a positive signal to the market and without DFIs the bond may not have been successful

2024 Debt facility

• Financial additionality: provision of long-term USD financing that is not readily available in Tanzania

External Risk

• Developing infrastructure and providing coverage does not always equate to access given other barriers such as affordability, i.e. of those with 3G coverage in least developed countries, 40 per cent are covered but do not use the internet.

Alignment Risk

• Part of the use of funds will be flexible. However the risk of AXIAN not prioritising underdeveloped markets that are of interest to us is deemed to be low. We have confidence in AXIAN's strategy of entering underdeveloped markets where there is an opportunity to disrupt uncompetitive pricing and make heavy infrastructure investments post-acquisition.

Evidence Risk

It will be difficult to distinguish and confidently attribute the overall ecosystem changes and GDP uplift to these investments.

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