November 13, 2020
OP Finnfund Global Impact Fund I to join a financing package to improve broadband access in rural Indonesia
OP Finnfund Global Impact Fund I, the first global emerging markets impact fund in Finland, has contributed USD 12.5 million to foster the work of Net1 Indonesia in bringing internet connectivity to underserviced areas in the fourth most populous country in the world.
OP Finnfund Global Impact Fund I joins a group of investors, led by Gemcorp Capital, which has co-committed $75m in growth financing to Mobile Internet Holdings BV, an indirectly owned subsidiary of Net1 International Holdings AS (Net1 International). Mobile Internet Holdings, through its subsidiaries, specialises in delivering broadband connectivity to underserved populations in emerging markets. Internet connectivity has grown in importance during the ongoing COVID-19 pandemic.
“Good fit to our investment strategy”
The debt financing facility of USD 75 million in total is committed collectively with c.$47.5m by Gemcorp Capital, $15m by InfraCo Asia Investments, and $12.5m by OP Finnfund Global Impact Fund I.
“Bringing internet connectivity to underserved people in rural Indonesia fits well to the strategic investment plan of OP Finnfund Global Impact Fund I. Net1 also provides internet access to many schools and hospitals in the rural areas, and the COVID-19 crisis has highlighted the importance of online schooling that would not be otherwise possible. We are pleased to contribute to this financing facility,” said Tuomas Virtala, CEO of OP Asset Management.
“We are delighted with the additional support from our current lenders and shareholders, as well as from two new and important financing partners. We are proud to bring on board a leading infrastructure investment company, InfraCo Asia and Finland’s first emerging markets impact fund OP Finnfund Global Impact Fund I, whom, alongside our long term partners Gemcorp Capital, are enabling us to continue our growth plan in Indonesia. Our aim is to ultimately transform the lives of hundreds of thousands of people in rural areas where limited or no broadband access is currently available,” said JD Fouchard, Chairman of Net1 International.
Aiming to provide connectivity to over 300 000 households
Currently, according to International Telecommunication Union, only 3% of Indonesia’s population have access to fixed broadband connectivity. The company aims to provide connectivity to over 300,000 households over the next five years. New or improved access to broadband connections is expected to bridge the digital divide across work and education opportunities between rural and urban populations in Indonesia, as well as improve access to the latest healthcare advice pertaining to the pandemic.
Net1 Indonesia is the only operator in Indonesia licensed to operate the 450MHz spectrum. This spectrum is significantly more efficient in broadcasting signals over long distances compared with the traditional higher frequency spectrums. Thus enabling cost-efficient broadband access in rural Indonesia.
Net1 International, is listed on the Norwegian Over the Counter Market (NOTC), and currently has investments in Indonesia and Philippines. It has a highly experienced management team with a track record of rolling out and managing LTE 450MHz networks, a technology well suited to address under-served broadband markets, such as the semi-rural and rural regions in Indonesia.
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OP Finnfund Global Impact Fund I
OP Finnfund Global Impact Fund I Ky is the first global emerging markets impact fund in Finland. The fund targets significant positive impacts in addition to financial return. OP Finnfund Global Impact Fund I Ky raised EUR 76 million in the first round of funding. OP Asset Management Ltd, part of OP Financial Group, one of the largest banking groups in Finland, acts as a portfolio manager for the fund and OP Fund Management Company Ltd acts as an alternative investment fund manager of the fund. Finnfund, a Finnish development financier and impact investor acts as an anchor investor and advisor to the fund. Read more: https://www.op.fi/op-ryhma/medialle/tiedotteet?id=3697076_PRC