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Fundraising - JULY 10, 2018

Cube Infrastructure holds €420m first close on new broadband infrastructure fund

by Jody Barhanovich

The European Commission and the European Investment Bank (EIB), together with the German KfW Bankengruppe, the Italian Cassa depositi e prestiti (CDP) and France’s Caisse des Dépôts et Consignations (CdC), has held a €420 million ($493.1 million) first close of the Connecting Europe Broadband Fund (CEBF), a fund managed by Cube Infrastructure Managers (Cube IM) to finance broadband network infrastructure across underserved areas in Europe.

The fund is the first investment platform to support broadband infrastructure under EFSI, the central pillar of the Investment Plan for Europe. It is open to the participation of private investors. Support from the fund will be complementary to other financing currently available on the market through private or private financial institutions and to existing EU financial instruments.

The fund has raised equity from private and public investors. The target size of the fund is around €500 million ($587 million). In view of the market appetite for the platform showed by other private investors during the premarketing phase, subsequent closings will occur over the next 18 months.

CEBF aims to invest, during a five-year investment period, equity and quasi-equity, including mezzanine and subordinated debt, in economically and technically viable broadband projects (with a focus on greenfield projects) that will be in line with the European connectivity targets, in particular the 2025 Gigabit society targets (100 Mbps upgradable to 1 Gbps).

An investment by the fund will not exceed €30 million ($35 million). Overall, the fund is expected to unlock additional investments between €1 billion ($1.17 billion) and €1.7 billion (1.99 billion) for broadband rollout in areas where very high-capacity networks are not deployed yet.

Cube IM, an alternative investment fund manager  based in Luxembourg, through its CEBF-dedicated team, will identify broadband projects and make investments according to the investment guidelines of the fund in the European Union, Norway and Iceland.

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