The United States Agency for International Development (USAID), through its Better Access and Connectivity (BEACON) project, signed a partnership agreement with Connectivity Capital, the world’s first connectivity-specific impact investment fund, to support the expansion of Internet service to underserved and geographically isolated and disadvantaged areas in the Philippines.
The partnership agreement was signed by John Garrity, chief of party of USAID’s BEACON project and Jim Forster, general partner of Connectivity Capital in the presence of officials of the Philippine Cable and Telecommunications Association (PCTA), Department of Information and Communications Technology (DICT) Negros Occidental Regional Office, and local government units (LGUs) during the Connectivity and Cybersecurity Conference on October 17 in Bacolod City.
The conference gathered about 200 cable TV operators, Internet service providers, national agencies, and LGUs from the Visayas region.
Through this partnership, USAID’s BEACON project and Connectivity Capital will jointly identify and engage private sector partners seeking to expand broadband Internet connectivity services, including but not limited to Internet service providers, internet exchange points, data centers, and other digital infrastructure entities.
Connectivity Capital will assess and extend financing to qualified private sector companies focused on broadband Internet expansion through the provision of debt financing and capital assistance. Both parties will also assist borrowers in project management, training, and monitoring and evaluation.
“There is a wide financing gap in the ICT sector, particularly for small and medium internet service providers who are often on the front lines of extending access to underserved communities in rural and remote parts of the country. To address this gap and achieve universal access, we need innovative financing solutions suitable to the needs of internet service providers so that they can grow and expand their services,” said Garrity.
“We are pleased to partner with Connectivity Capital as we share the same goal of closing the digital divide in the Philippines, especially in areas where there is no access to internet connectivity.”
“The Philippines is a large and very diverse country. The internet has always thrived on a diversity of actors and approaches to building networks – both large-scale and smaller-scale. In the United States, the cable TV industry leveraged their substantial high-capacity infrastructure, originally built for analog TV, to become a leader in home broadband internet access,” said Forster.
“The world abounds in great technology, and more is always being developed. Connectivity Capital has invested in ISPs throughout Africa and Asia and has learned to make a well-informed risk assessment and help get capital to the best companies, independent of technology used.”
Connectivity Capital offers debt financing to ISPs for their expansion ranging from P11 million ($200,000) to P117 million ($2 million) to established companies for working capital, equipment purchases, and capital investments in digital infrastructure. Pre-qualification criteria for potential borrowers include at least two years of operation, annual revenue of at least P29 million ($500,000), and audited financial records.
