MTC's Celtel gets $320mn loan
World Bank arm arranges financing package for African mobile operator to upgrade networks.
African operator Celtel is set to receive a $320 million financing package from an arm of the World Bank Group (WBG) to expand and upgrade its mobile networks in five countries.
The International Finance Corporation (IFC) said on Wednesday that Celtel, a subsidiary of Kuwait’s MTC, would use the money to modernise mobile networks in Democratic Republic of Congo, Madagascar, Malawi, Sierra Leone and Uganda, where very few people have access to telephones.
Telephone penetration rates in the countries range from just over four phones for every 100 people in Malawi and Madagascar to around 10 per 100 people in Sierra Leone.
“Investment in infrastructure such as telecommunications is crucial for Africa’s economic development, and our long term collaboration with IFC shows that the private sector can play an important role in fulfilling that need,” said Celtel chairman Mo Ibrahim.
IFC will provide Celtel with a $160 million loan from its own account, as well as another $160 million in syndicated loans from participating commercial banks and parallel loans from bilateral financial institutions.
The financing package is IFC’s largest today in Sub-Sahara Africa.
“Infrastructure is one of the key bottlenecks and principal reason for the high cost of doing business in Africa, which is a drag on economic competitiveness,” said Edward Nassim, IFC vice president for Europe, the Middle East and Africa.
“The expansion of mobile telephone services to previously underserved areas will help create a more favorable environment for businesses to operate, thereby creating jobs and contributing to poverty reduction,” he added.
Celtel operates in around 15 countries in Africa. The operator was acquired by MTC in April 2005 for around $3.4 billion.