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IFC SIGNS US$100 MILLION AGENCY LINE FOR TELECOMMUNICATIONS PROJECT FOR CENTRAL EUROPE

WASHINGTON, D.C., Nov. 13 -- The International Finance Corporation (IFC) has signed financing agreements to establish the Central Europe Telecommunications Agency Line (CETAL), a US$100 million agency line that will provide loan and quasi-equity financing in U.S. dollars as well as local currency for private telecommunications companies in the region. In addition to IFC, ABN-AMRO Bank, Zivonstenska Banka of the Czech Republic, the Hungarian Foreign Trade Bank, the Polish Development Bank, and the European Bank for Reconstruction and Development (EBRD) are funding the line. The governments of Central Europe have issued licenses to private operators to build and operate regional and specialized networks in order to modernize and develop the telecommunications infrastructure. The operators will be providing basic and specialized services such as data networks, paging, and cable TV. Many of these new networks are expected to be small, with financing needs ranging from US$10 to US$50 million. "CETAL will make an i
mportant contribution to the expansion of telecommunications infrastructure in some of the region's more underserved areas," said Everett J. Santos, Director of IFC's Infrastructure Department. "Additionally, the structure of the agency line will help attract financing from strategic investors as well as foreign and local banks to smaller telecom projects in a new and transitory environment." IFC and EBRD are expected to provide up to US$33.3 million each for CETAL, and the remaining financing will be provided by ABN-AMRO and the local banks. ABN-AMRO Bank will also act as the Agent, responsible for appraising projects, conducting negotiations, and presenting projects for approval to the other banks. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.