First long term financing for telecom towers
The Dutch development bank FMO has arranged a financial package of USD 122 million from European Development Finance Institutions for Irrawaddy Green Towers Ltd. (IGT) to build mobile communications infrastructure across Myanmar. The financial package consist of a subordinated loan of USD 13m with a tenor of 9 years and a long term senior loan of USD 109m with a tenor of 8 years. FMO subscribes to the subordinated loan out of the Infrastructure Development Fund (IDF) which FMO manages on behalf of the Ministry for Foreign Trade and Development Cooperation. The senior loan is syndicated among European Development Finance Institutions with following participations: Deutsche Investitions- und Entwicklungsgesellschaft mbH DEG (Germany), Proparco (France), CDC Group (Great Britain), BIO (Belgium) and OeEB (Austria).
In 2014 only 14 % of the approximately 51 million inhabitants of Myanmar had access to mobile telecommunication services. The country’s objective is to substantially increase this share. In Myanmar, IGT will build a mobile telecommunication tower network consisting of at least 2,000 towers, thus providing coverage to approximately 14 million people. Mainly in rural areas this can provide a significant stimulus for economic development, i.e. by improving access to mobile financial services and service offers.
Since its foundation, IGT has created 320 direct jobs. Another 1,000 indirect jobs will be created in relation to the erection and operation of the towers. The company offers a comprehensive range of training and qualification programs for its staff and, in doing so, provides an important contribution to the transfer of technical and economic know-how. The expansion of the mobile sector is also intended to improve the framework conditions for foreign investments and has a great development impact. The development of the necessary infrastructure for a countrywide mobile network is supported by private operators such as IGT. The company, which was founded in 2014, intends to invest a total amount of USD 230m in the near term.
Linda Broekhuizen, CIO of FMO commented: “With this landmark transaction people in Myanmar, a post-conflict country, will get much improved access to telecom services. Mobile communications have an important contribution to a country’s economic and social development and will definitely benefit the many people located in rural areas in Myanmar”.
About FMO
FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 45 years. Our mission is to empower entrepreneurs to build a better world. We invest in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. www.fmo.nl
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