SOUTH AFRICA
METROFIBRE NETWORX

Bringing fast and affordable internet to South Africa

In 2019, STOA acquired a stake in the South African company MetroFibre Networx, which specializes in the provision of fiber optic networks, thereby investing in a key sector which is helping to boost the country’s economy.

 

The project

In March 2019, STOA acquired a 23% strategic interest in MetroFibre Networx (MFN), a high-potential South African operator specializing in the provision of open access fiber networks for subscribers (Fiber-To-The-Home or “FTTF”) and businesses (Fiber-To-The-Business or “FTTB”). STOA’s investment in a company with strong growth potential is its first in the telecommunications sector. It provides MFN with the opportunity to invest more than 2 billion South African Rand in its core network to improve its offering to households and businesses.

As a major economic growth driver in Africa, the telecommunications sector has a direct social impact by facilitating access to fast and affordable internet. Extending STOA’s portfolio to this sector is therefore a natural next step aimed in particular at fostering African countries’ socio-economic development and reducing the digital divide. Through this transaction, STOA embarks on a partnership with a key player in the South African fiber optic sector and supports a fast-growing company in a dynamic and demand-driven market.

 

What’s at stake

Fiber optics driving growth

The project is of vital importance for the country. During his 2019 State of the Nation address, South African President Cyril Ramaphosa noted that “the telecommunications sector has considerable potential to stimulate economic growth”. STOA’s investment will enable MFN customers to benefit from improved access to web-based infrastructure as well as reliable and quality products. By contributing to the development of the company, it will also help create job opportunities in a country with one of the highest unemployment rates in the world. In 2019, 28% of the working population was unemployed in South Africa, according to the World Bank.

A strong societal commitment

STOA’s representation and regular participation in the various specific committees (financial, appointment/remuneration, ESG), the latter being in charge of the project’s social responsibility dimensions, ensures rigorous monitoring in these areas. Particular attention is paid to inclusion (diversity and gender) in light of the black empowerment challenges facing the country.
Performance indicator monitoring on gender issues is particularly encouraging, with numbers that bring the project close to best practices in the sector. MFN is also engaged in a large number of CSR actions.

 

Expected results
  • 120 000 homes passed by 2021
Impact results measured in 2019
  • + 90,000 residential units connected
  • 1,877 direct and indirect jobs supported [1]
  • 31% of female employees

[1] Modeled impact (see our ESG and Impact report on page 8). View our disclosure statement: www.impactprinciples.org/signatories-reporting www.impactprinciples.org/signatories-reporting

 

” This transaction is consistent with the trend we are seeing in the fiber segment in Africa. The provision of fiber-related services and products, despite increased competitive pressure, has experienced phenomenal growth and offers investors attractive returns. To support this growth, operators are continuing to raise both debt and equity financing. ”

Nina Triantis, RGlobal Head of the Telecom Division – Standard Bank

Expected results

120000

HOMES PASSED

PORTFOLIO

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