RMB arranges R2bn sustainable finance package for Octotel

 

Client challenge

Octotel, an Actis portfolio company, is Cape Town’s largest Open Access Network focused on Fibre-To-The-Home (FTTH) and Business (FTTB). As part of their rollout strategy, Octotel plans on expanding its network to 500,000 homes with the support of an innovative sustainable financing package from RMB.

A new R2bn facility provided by RMB will assist with Octotel’s journey to double the size of their network over the next three to five years and to drive sustainable digital inclusion in South Africa.

RMB's solution

RMB is a long-term funding partner to Octotel, and in 2020 helped facilitate Actis becoming a shareholder. This move has been instrumental in helping to drive its sustainable growth. The new funding package will further support Octotel’s growth and investment in the construction, development, expansion, upgrading and maintenance of internet infrastructure and installations, which will help South Africa move forward in achieving universal access to broadband.

RMB worked with Octotel to structure the loan as a social loan, which is designed to finance projects and activities that address social issues. In this instance – access to fibre and high-speed, affordable connectivity. The loan is structured in accordance with the Loan Market Association (LMA) Social Loan Principles (SLP), which is an internationally accepted framework that seeks to facilitate economic activity that promotes positive social outcomes.

Client enablement

Social loan financing represents a unique opportunity for RMB to partner with clients who have the potential to increase their social impact. Access to the internet has become a basic need, and while South Africa has good connectivity in major centres, much of the country remains underserved, which limits opportunities in these areas. Addressing this gap, as well as issues around affordability, adoption and use of digital services, is key to an inclusive future.

Beyond the broader social benefits delivered by improved internet access and quality, Octotel is committed to driving further social impact and digital inclusion. They are adopting several key initiatives, such as exploring lower cost or prepaid products to diversify their offering, driving growth into lower LSM areas, connecting schools within proximity to their fibre network for free, and lowering their carbon footprint. 

 

Client	Octotel
Size of the deal	R2bn
Sector	Telecommunications and Technology
Capabilities	Sustainable Finance and ESG Advisory
RMB's role	Sustainability agent, Financial advisor
Country	SA