South African Private Equity Fund Secures 35% Ownership in Kenya's Mawingu Networks
In a significant move for Eastern and Southern Africa's digital infrastructure market, the COMESA Competition Commission (CCC) is currently reviewing the proposed acquisition of a 35% stake in Kenyan internet service provider Mawingu Networks by South Africa’s Pembani Remgro Infrastructure Fund II (PRIF II). This transaction, if approved, would give PRIF II controlling interest in Mawingu Networks.
Mawingu Networks, with a 2.8% market share in Kenya's ISP market, operates primarily in underserved rural areas, providing fiber and fixed wireless internet services. The startup, which began operations by leveraging unused television frequencies to deliver internet services to rural areas, has since pivoted to fibre and fixed wireless connections, extending its reach to rural and peri-urban areas in western and northern Kenya.
PRIF II, a South African private equity fund backed by influential Development Finance Institutions, such as the African Development Bank and the European Investment Bank, is a significant player in the digital infrastructure sector. The fund's backing signifies strong investor confidence in African digital infrastructure.
The review by the CCC will focus on whether this acquisition is likely to substantially prevent or lessen competition within the COMESA regional economic bloc. Mawingu, though not among the top three ISPs in Kenya, serves a niche in rural coverage and is expanding regionally, including plans involving Tanzania. The acquisition could impact competition dynamics by combining regional digital infrastructure assets under one controlling investor.
The concern is whether PRIF II’s controlling stake might reduce competition by concentrating market power given the fund’s growing footprint across multiple local ISPs and telecom infrastructure investments in the region. The CCC’s role is to ensure that this consolidation does not lead to anti-competitive practices such as price fixing, market foreclosure, or barriers to entry, which could harm consumers and innovation across the COMESA territory.
This transaction reflects a broader trend of rising private equity interest in Africa’s digital connectivity space, emphasising the continent’s potential as a growth frontier for telecom infrastructure investments. It comes shortly after Mawingu raised significant debt financing to scale operations, indicating robust growth ambitions that could reshape regional internet access landscapes if carefully managed within competitive regulation frameworks.
The final decision will influence competitive dynamics and investment trends across the COMESA bloc. Mawingu Networks has raised a total of $29 million across six funding rounds, with investors including DFIs and VCs such as E3 Capital, FMO, Aster, Africa Go Green Fund, and Kepple Africa Ventures. The latest equity sale signals a shift in Mawingu's capital structure amid increased investor attention on Africa’s digital infrastructure.
PRIF II has backed a total of 11 companies across Kenya, Ethiopia, Uganda, Madagascar, and the Democratic Republic of the Congo. The acquisition will give PRIF II controlling interest in Mawingu Networks, potentially increasing service reach and quality, but also raising concerns about competition. The CCC's decision will balance the potential benefits against the risks.
- The acquisition of a 35% stake in Mawingu Networks by Pembani Remgro Infrastructure Fund II (PRIF II) could lead to changes in financing, as the stake would give PRIF II controlling interest in the company, a significant player in Kenya's rural internet service provision, backed by development finance institutions.
- The review by the COMESA Competition Commission (CCC) on the proposed acquisition focuses on competition dynamics, as the consolidation of regional digital infrastructure assets under one investor could potentially impact competition and be subject to anti-competitive practices, such as price fixing or market foreclosure.
