One of Africa’s largest telcos, Airtel Group, has announced the signing of a $125 million revolving credit facility with investment banking group, Citigroup Inc, through its branch offices in sub-Saharan Africa.
A revolving loan is a loan that a business arranges with a bank which allows the business to withdraw money any time, with a pre-established maximum amount. The facility is used by businesses that have low cash balances to cover operational and unexpected expenses.
Airtel says the credit facility aligns with its plan to raise debt in its local operating companies. The facility will include both local currency and US dollar-denominated debt, and will be used to finance Airtel’s operations and investments in four of its subsidiaries.
The credit facility will also provide Airtel Africa with the opportunity to save interest rates in exchange for achieving social impact milestones in such areas as digital inclusion and gender diversity.
The social impact projects will focus mainly on rural areas and women and are aligned with Airtel Africa’s recently launched sustainability strategy.
“This facility is in line with our strategy to raise debt in our local operating companies and will include both local currency and US dollar-denominated debt. The facility has a tenor up to September 2024 and will be used to support Airtel Africa’s operations and investments in four of its subsidiaries,” the statement said.
This is a big boost to the telco which operates in 14 African markets and has ongoing projects across several of these markets, including the recent acquisition of an additional 60 MHz spectrum for $40 million in Kenya and the Democratic Republic of Congo (DRC).
Airtel Africa’s business offerings range from telecommunications to mobile money services. It has a combined user base of about 131.6 million.
The revolving loan expire in September 2024, to be refunded in one year.