First step toward joint regional expansion projects in Nordbaden and the Rhine-Neckar area

Frankfurt, November 7, 2017 – With Breitbandversorgung Deutschland (BBV), Bouwfonds Investment Management (Bouwfonds IM) and ZTE Deutschland, a strong new partner for the privately financed expansion of the fibre optic network in structurally weak regions enters the German market. The three companies plan to join forces to close existing supply gaps in largely undersupplied regions by building future-proof, high-performance networks. The Bouwfonds Communication Infrastructure Funds II will undertake the financing of the joint projects. The networks built by ZTE Deutschland and containing latest network technology from ZTE will be marketed and operated by BBV. This is covered by a cooperation agreement which has now been signed between the three parties. The financial advisor for BBV shall be the Infrastructure & Energy Division of the private bank Berenberg.

Overall, a two digit million amount is available to the cooperation partners for joint projects in a first step. Financing will be made via the recently founded second institutional infrastructure fund, the Bouwfonds Communication Infrastructure Fonds II (BCIF II). The first project of the cooperation partners is the installation of a fire optic network in the city of Bretten near Karlsruhe. The network, which is already being marketed, is jointly planned and built by BBV and the technology provider ZTE Deutschland. The BCIF II will purchase the passive infrastructure upon completion, and BBV will then lease and operate the network. In the context of their cooperation, the partners have already identified more potential expansion clusters in the Nordbaden region and in the Rhine-Neckar metropolitan region which shall be gradually addressed in the near future.

Dr. Peter Selgert, Director Asset Management Communications Infrastructure at Bouwfonds IM, explains: “The investment in Bretten is an example of our investment strategy. The BCIF II invests in infrastructure in the undersupplied rural area. The objective is to build a comprehensive regional fibre optic network by joining multiple partial networks, supplying both private households and businesses with high-speed Internet.”The “Bouwfonds Communication Infrastructure Fund II” will invest between 500 and 600 million euros in “passive telecommunication infrastructure” such as fibre optic networks, broadcasting towers and data centers.

“We want to assume a pioneering role in this emerging field with our cooperation partners. In doing so, we can achieve very stable cash flows based on our proven joint expertise and the careful structured approach and, above all, limit the development risk for all parties involved. After all, the investor will only purchase the infrastructure in each case after it has been completed,” underlines Manfred Maschek, Managing Director of BBV Deutschland, at today’s signing of the cooperation agreement.

“Europe’s strongest national economy also needs the highest performing digital infrastructure, also in rural area. It is our declared goal to promote Germany on its journey into the gigabit society and to drive the building of a gigabit infrastructure in our role of a global technology leader for broadband technologies,” adds Sun Jie, General Manager of ZTE Deutschland GmbH. “ZTE has already been active in Germany for more than 12 years and has been making long-term investments. Against this background, partners with the same long-term vision have teamed up here.”

In the future, the private financing of fibre optic networks in regions where high-speed Internet is not available everywhere or not at all will play a key role for Germany’s journey into the gigabit society. The necessary investment volume for a comprehensive expansion of fibre optic networks which experts estimate to amount to 70 to 80 billion euros cannot be borne by the network operators alone.