US private equity firm Emerging Capital Partners invests $25m in East African media and telecoms company Wananchi Group Holdings

The investment is ECP’s tenth in the African telecoms sector, and the company continues to hold stakes in Zain Gabon, MTN Cote d’Ivoire and Liberian and Guinean mobile provider Cellcom. Although cable television and broadband internet penetrations in Kenya and Tanzania stand at under one per cent, those markets are growing due to the development of undersea fibre lines and an emerging middle class, according to ECP.

Wananchi is to use the funding to upgrade and expand its existing network infrastructure, allowing the group to provide East Africa’s first combined digital pay television, high speed internet and voice-over IP service.

"Following on the tremendous growth in African mobile penetration over the last ten years, we view broadband and related services as the next ‘game changer' in African telecom. Wananchi's product offering, network infrastructure and strong management are ideally suited to address the significant unmet demand for media and broadband services in East Africa."

ECP is the first private equity firm to raise more than $1.6bn to invest in companies across Africa, with an investment strategy of delivering above-market returns to investors that are uncorrelated to the US and other global economies.

In July, the firm acquired controlling stakes in Algerian real estate company Shireseal for $13.8m and $12.4m in Moroccan construction group Almes through its MENAGrowth Fund.

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