E3 CAPITAL PARTNERS WITH USAID AND FMO IN THE BEYOND ACCESS PROJECT TO DECREASE THE DIGITAL DIVIDE IN AFRICA
The Beyond Access Project, a joint venture by E3 Capital, USAID and FMO is targeting to close the digital divide in Africa as calls for achieving global digital connectivity are on the rise. According to the UN, an estimated 3.7 billion people, almost half of the world’s population, currently do not have access to the internet. The least developed countries are also the least connected, with only 19% of the people online. The World Bank’s World Development Report of 2016 shows just how wide the digital divide in sub-Saharan Africa is, with the richest 60% three times more likely to have internet access than the bottom 40%, and those in urban areas being more than twice as likely to have access as those in rural areas. As such, the Beyond Access Project aims to narrow this divide in sub-Saharan Africa. This venture is aligned with the UN target where every person should have safe and affordable access to the internet, including meaningful use of digitally enabled services in line with the Sustainable Development Goals (SDGs) by 2030.
To this end, the ‘Beyond Access’ Project seeks to mobilize private sector capital and support for early-stage connectivity companies to scale their commercial, financial and impact returns. In doing so, the Beyond Access Project will bring a market-driven approach to delivering connectivity services to currently un- or under-connected communities in Africa.
USAID is partnering with E3 Capital under Digital Invest, a new blended finance program that supports global investment fund managers seeking to accelerate sustainable market growth for digital finance and internet service providers (ISPs) serving traditionally excluded consumer populations worldwide.
'Closing the digital divide is crucial, not just to expand growth, but to create more resilient societies… Digital Invest will build on years of work we've done with the private sector to expand internet access to underserved communities around the world… By priming the pump, the U.S. government will give private sector partners the confidence to invest in earlier-stage, high-potential startups and projects that operate in more challenging market environments.' Samantha Power, USAID Administrator (public launch of Digital Invest on April 27th, 2022).
In Digital Invest’s first year, USAID will leverage $3.45 million in U.S. government funding to accelerate the mobilization of an estimated $335 million through partnerships with fund managers such as E3 Capital. E3 Capital seeks to improve access to digitally-enabled services across sub-Saharan Africa, with a portion of their new fund dedicated to expanding connectivity to drive internet access and use.
FMO’s partnership with E3 Capital is led by the FMO Ventures and Capacity Development (CD) teams which seek to empower innovative business models in emerging markets by leveraging its expertise to provide CD, and support venture growth in frontier markets. The CD funding extended to E3 Capital’s Beyond Access Project comes from the MASSIF fund, which FMO manages on behalf of the Dutch government.
'FMO is delighted to support this connectivity project in partnership with USAID and E3 Capital. This project aligns well with MASSIF’s approach working through financial intermediaries and FMO’s broader efforts supporting early-stage ventures to scale solutions for un(der)served communities.' Jeroen Harteveld, Portfolio Manager, Partnerships for Impact, FMO.
‘’We believe that through this multi-stakeholder partnership, collectively we have a better chance at narrowing the digital divide in Africa. We see this as a building block, alongside energy, to unlock digitised, decentralised and decarbonised innovative business models that will provide essential services to the market. Provision of these essential services will be achieved by supporting connectivity infrastructure as well as services that can both enable and leverage connectivity services, such as energy, telemedicine, e-learning, and digital finance services.”. This partnership will also give way to the longer-term goal of developing a more-interconnected community of connectivity actors in Africa and beyond, including investors, startups, advisors, policy-makers and regulators.” - Paras Patel, Founder and Managing Partner of E3 Capital.
For more information on the project, please visit FMO’s project details page here and USAID’s Digital Invest program, with additional questions directed to E3 Capital admin@e3-cap.com.
About FMO
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a close to 50-year proven track-record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 12.5 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit www.fmo.nl.
About USAID Digital Invest
Digital Invest is a new USAID blended finance program under the Digital Connectivity and Cybersecurity Partnership (DCCP) which seeks to mobilize private capital for digital finance and internet service providers (ISPs) serving traditionally excluded consumer populations worldwide. The program provides technical assistance, fund capitalization support, and direct portfolio engagement to help financiers support earlier-stage, higher-risk projects and startups with clear development impact. For more information: please visit www.usaid.gov/digital-development/digital-invest.