South African infrastructure fund, Pembani Remgro Infrastructure Fund II (PRIF II) will acquire a 35% stake in Kenya’s Mawingu Networks, giving the fund controlling interest in the Microsoft-backed internet service provider.
The COMESA Competition Commission announced the proposed acquisition, which requires regulatory approval before completion. The transaction value remains undisclosed, though it comes after Mawingu raised 1.9 billion shillings in debt financing earlier this year.
Mawingu Networks Holds 2.8% Share in Kenya’s ISP Market
Mawingu Networks ranks as Kenya’s sixth-largest internet service provider with a 2.8% market share, according to the Communications Authority of Kenya’s second-quarter statistics for 2024/25. The company trails behind market leader Safaricom (36.1%), Jamii Telecommunications (24%), Wananchi Group (15.4%), Poa Internet (14%), and Vilcom Network (3.2%).
The Nairobi-based company specializes in providing internet connectivity to rural and peri-urban areas through fixed wireless access and fiber technology. Since 2013, Microsoft has supported Mawingu’s mission to bring affordable internet access to underserved communities across Kenya.
South African Fund Targets African Infrastructure Growth
PRIF II achieved final close in November 2024 with total commitments of $355 million. The fund focuses on infrastructure investments across sub-Saharan Africa, with particular emphasis on renewable energy, digital infrastructure, and transportation projects.
The European Investment Bank committed $80 million to the fund, making it the EIB’s largest investment in an African fund. Other major investors include Canada’s FinDev Canada ($35 million) and France’s Proparco ($15 million).
According to the fund’s investment mandate, PRIF II targets equity and quasi-equity investments in infrastructure companies headquartered in or operating primarily within Africa. The fund already operates in 12 Common Market countries including Kenya, Uganda, Zambia, and Zimbabwe.
Microsoft Partnership Drives Rural Internet Access
Mawingu’s partnership with Microsoft dates back to 2013, when the tech giant provided initial funding to pilot affordable wireless broadband services. The company uses TV white spaces technology, which utilizes unused television broadcast frequencies to deliver internet access to remote areas.
This innovative approach allows Mawingu to provide internet services at lower costs than traditional methods. The company combines TV white spaces with solar power to create sustainable internet infrastructure in areas where conventional connectivity proves economically challenging.
In November 2024, Mawingu expanded its operations by acquiring Habari, a Tanzanian internet service provider with 25 years of experience serving rural households and businesses across seven regions. The acquisition was funded through the 1.9 billion shillings raised from multiple investors, including the Africa Go Green Fund and InfraCo Africa.
COMESA Commission Reviews Transaction Details
The proposed transaction involves PRIF II acquiring shares through a Special Purpose Vehicle (SPV) created specifically for this investment. The SPV will be wholly owned and controlled by PRIF II, which operates as a closed-end fund under South African law.
COMESA’s competition commission stated that the transaction raises no horizontal competition concerns since the acquiring group and Mawingu operate in different business areas. However, the commission noted limited vertical relationships, as Mawingu procures some data center services from facilities owned by the acquiring group in Kenya.
The commission invited stakeholders, including competitors, suppliers, and customers, to submit written representations regarding the proposed transaction. The review process will determine whether the deal substantially prevents or lessens competition in the Common Market or conflicts with public interest.
Regional Competition Commission Oversees Merger
The COMESA Competition Commission oversees merger approvals across 21 member states in Eastern and Southern Africa. The commission’s role includes evaluating whether proposed transactions harm competition or public interest within the Common Market.
Recent regulatory changes have strengthened merger control procedures, with new requirements for pre-merger notification and increased administrative oversight. The commission typically takes several months to review complex transactions involving multiple jurisdictions.
For telecommunications and internet infrastructure deals, the commission pays particular attention to market concentration levels and potential impacts on consumer choice and pricing. The Mawingu acquisition represents PRIF II’s first major investment in Kenya’s telecommunications sector.
Kenya’s Internet Market Sees Continued Growth
Kenya’s internet market has experienced steady growth, with multiple providers competing for market share. Safaricom maintains its dominant position through mobile broadband services, while smaller providers like Mawingu focus on underserved rural markets.
The entry of Starlink has intensified competition, though the satellite internet provider currently holds only 1.1% market share. Traditional providers continue expanding fiber networks and wireless infrastructure to compete with satellite-based services.
Mawingu’s focus on rural connectivity positions it well for continued growth, as government initiatives aim to increase internet penetration in underserved areas. The company’s solar-powered infrastructure and TV white spaces technology offer sustainable solutions for remote locations.
The partnership with PRIF II provides Mawingu with additional capital to accelerate expansion plans and potentially explore new markets across East Africa. The deal reflects growing investor confidence in Africa’s digital infrastructure sector.
