Insurance group Jubilee Holdings #ticker:JUB has purchased an additional 10 percent stake in submarine fibre optic cable project Seacom for an undisclosed sum, raising its ownership in the venture to 18.8 percent.
The Nairobi Securities Exchange #ticker:NSE -listed firm, which owns shares in Seacom indirectly through IPS Cable System Limited, previously owned an 8.8 percent stake in the company.
The transaction underlines Jubilee’s preference for investing long-term in private infrastructure projects that can absorb substantial capital while generating stable returns with minimal volatility.
“We are very pleased with this additional investment in Seacom, which has been a key partner for the modernization of African businesses in a number of countries, and we have confidence in the business’s growth trajectory,” Jubilee’s chairman Nizar Juma said in a statement.
“This additional investment will continue to provide us with stable and consistent returns as has been the case with our existing investments as well as consolidate our position at the centre of digital transformation in our region.”
Seacom is a $650 million (Sh74 billion), 15,000-kilometre submarine fibre optic cable project.
It links South Africa, Mozambique, Madagascar, Kenya and Tanzania with other international broadband cables and seeks to provide low cost and high-quality broadband capacity.
The other significant fibre optic cable project is The East African Marine System (TEAMS) which runs a 5,000-kilometre undersea cable connecting Mombasa with Fujairah in the United Arab Emirates.
TEAMS was built as a joint venture between the Government of Kenya and Kenyan operators, who hold 85 percent shares and UAE-based operator Etisalat, with 15 percent.
The increased investment in Seacom is part of Jubilee’s strategy of allocating capital to assets with stable, long-term returns.
The insurance group has been investing heavily in projects such as real estate, Uganda’s Bujagali hydropower plant and Kenya’s Kipevu II thermal power plant. vjuma@ke.nationmedia.com