IFC To Finance Celtel's $320m Project For African Business Expansion

19th JUNE 2007

The International Financing Corporation (IFC) will finance Africa’s largest cellular operator, Celtel, to the tune of $320 million to help it expand its operations in five sub-Saharan African countries.
The plan was announced last week at the World Economic Forum in Cape Town, South Africa; the financing deal is the IFC's largest.

The corporation is the private sector arm of the World Bank, within sub-Saharan Africa, says Edward Nassim, IFC VP for Africa, Europe and the Middle East.

Celtel Chairman, Mo Ibrahim, says the loan will be used to build Celtel networks in rural areas and regions not covered in the Democratic Republic of Congo, Madagascar, Malawi, Sierra Leone and Uganda.
Ibrahim says this is also part of Celtel's strategy to build "one Africa network, which allows all the network operators' subscribers to roam freely on all Celtel networks on the African continent".

He says subscribers living in the Congo Republic, the Democratic Republic of Congo, Tanzania, Kenya, Gabon and Uganda are able to do so since September last year. The combined population of those countries is about 160 million people and the total area covered by the network is larger than Europe.

Celtel, the largest competitor to South Africa's MTN and Vodacom on the African continent, was bought by Kuwait’s MTC in 2005. It has since invested $10 billion in African mobile telecommunications services.
Half of the $320 million loan will come from the IFC and the rest from a consortium of private banks located in the country where the expansion will occur and other African countries, such as South Africa.
Nassim says this loan, and the $424 million credit line IFC opened two months ago on behalf of the East African Submarine Cable System, are part of IFC's overall strategy to invest in African telecommunications infrastructure.

"These investments fit into our overall telecommunications strategy to get involved in African infrastructure to lower the cost for consumers."

The relationship between Celtel and the IFC began in 1998. Ibrahim says the IFC has been a partner in almost all its African markets at every level from board to operation level.

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