In a ringing endorsement of its business model, fibre broadband provider Gigaclear has secured a €25 million (£18 million) loan from the European Investment Bank (EIB).
The debt facility, the largest one of its kind awarded to a UK company, will be used to support Gigaclear’s plans to rapidly expand its all-fibre, ultrafast broadband infrastructure within rural Britain during 2016.
About one third of the required capital is being provided by the EIB, with Gigaclear providing the remainder. The company has raised funds from some high-profile investors including Woodford Investment Management and Infracapital, the infrastructure investment arm of Prudential.
During 2016 Gigaclear plans to expand its network to reach at least 40,000 additional properties. Founded in December 2010, Gigaclear has so far installed fibre outside more than 15,000 properties in rural parts of Oxfordshire, Essex, Northamptonshire, Berkshire and Gloucestershire, with 10,000 more already in construction.
Gigaclear is both building networks under its own commercial investment and has also won three government-subsidised contracts in Gloucestershire, Berkshire and Essex (see Gigaclear celebrates trio of wins under BDUK broadband scheme). Gigaclear was the first operator other than BT to secure contracts as part of the Broadband Delivery UK (BDUK) programme to bring broadband of at least 24Mb/s to 95 per cent of the UK.
“This level of support is a ringing endorsement of Gigaclear as a business,” stated Matthew Hare, chief executive of Gigaclear. “EIB clearly has faith in our model and vision. It can see our own commitment to invest and how effectively we are already providing next-generation infrastructure for the UK’s rural economy and communities.
He added: “We have estimated that 1.5 million properties in the UK could benefit from our services and we want to reach those people as quickly as possible, but we’re a capital intensive business. So this loan is a landmark moment for us and an important next step in our expansion strategy.”
The loan to Gigaclear is the maximum available to companies under the ‘InnovFin – EU Finance for Innovators’ MidCap Growth Finance scheme and is the largest amount the EIB has awarded to any UK business under the InnovFin initiative.
Jonathan Taylor, European Investment Bank vice president commented: “Improving internet access in rural areas is crucial for economic activity, healthcare, education and access to key services. Over the last five years the European Investment Bank has provided nearly €12 billion to improve broadband and telecommunications across Europe. We are pleased to support Gigaclear’s activities in our first targeted support for rural communications in the UK.”
At the end of 2015 Gigaclear owned and operated 56 rural fibre networks and has 35 under construction across Kent, Oxfordshire, Northamptonshire, Cambridgeshire, Leicestershire, Buckinghamshire, Hertfordshire, Rutland, Gloucestershire, Berkshire and Essex.
In 2015 the company launched a trial of Britain’s fastest internet package for retail customers with up to 5Gbps broadband speeds, delivering download speeds up to 200 times faster and upload speeds 1,000 times faster than the UK average.
Matthew Hare concluded: “Our strategy to use pure fibre means we aren’t simply connecting rural communities but we are helping them leapfrog a whole generation of technology. Understandably communities who up to now have suffered from woeful internet speeds are incredibly excited about that proposition, so demand for our services is huge.”