Telefonica-Allianz JV secures EUR1.6bn financing for FTTH rollout

25 Mar 2021

Unsere Grune Glasfaser (UGG), the fibre-optic joint venture between Telefonica Group and Allianz, has announced it has a debt package to help finance the overall EUR5 billion (USD5.9 billion) investment required for its fibre-to-the-home (FTTH) network rollout in rural and semi-rural areas in Germany. UGG secured the infrastructure financing package from nine international banks. The initial debt facilities total EUR1.65 billion of seven-year, non-recourse senior debt which is sufficient to meet UGG’s liquidity needs over the first three years of the project, with built-in flexibility for further facilities thereafter to be raised in future alongside the new financing in order to complete the rollout. The new financing accompanies the EUR1.5 billion equity committed to UGG by Allianz and Telefonica.

UGG will roll out up to 2.2 million FTTH connections in the next six years through the deployment of a 50,000km fibre-optic network, enabling Telefonica and other providers to market fibre services to consumers in sparsely populated and underserved regions. UGG focuses on smaller communities with a maximum of 10,000 households that have so far not had access to high speed fibre-optic internet. It started the rollout in early March in the municipality of Maring-Noviand in the Rhineland-Palatinate district of Bernkastel-Wittlich, benefiting around 775 households with around 1,500 inhabitants, followed by the Baden-Wuerttemberg town of Malterdingen.

As previously reported by CommsUpdate, in October last year Telefonica reached an agreement with the private equity arm of Allianz for the creation of a joint venture to deploy fibre-optic networks in Germany. The companies each hold a 50% stake in the open-access wholesale operator which will sell FTTH connection products to Telefonica Deutschland, which will be marketed as broadband services to O2 end customers. As an independent FTTH open platform, UGG will also offer wholesale access to all telecoms service providers so they can in turn offer these services to their end customers. Telefonica Group’s participation is held through its infrastructure unit Telefonica Infra (40%) and Telefonica Deutschland (10%), while Allianz Capital Partners will invest 50% in the JV on behalf of Allianz insurance companies and the Allianz European Infrastructure Fund.

Germany, Telefonica, Telefonica Deutschland Holding