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WASHINGTON, D.C., July 22 -- The International Finance Corporation (IFC) has signed an agreement to invest US$35 million in Lightel S.A. Tecnologia da Informacao (Lightel), a Brazilian telecommunications firm based in Uberlandia in the State of Minas Gerais.
IFC's financing will help Lightel expand and modernize its basic and cellular networks. As Brazil's telecommunications sector is opened for greater private sector participation, Lightel will be able to diversify into newly liberalized areas. Estimated to cost US$300 million, the project will be implemented in 1996 and 1997. IFC's financing package consists of a loan of US$25 million and an equity investment of US$10 million.
Lightel is a holding company established by the ALGAR Group to manage its telecommunications activities. Lightel's main subsidiary, Companhia de Telefones do Brasil Central, is currently the only private operator of basic and cellular services in Brazil.
"A major component of the project will be to provide modern technology at competitive rates to over 2.4 million people in the States of Minas Gerais, Sao Paulo, Goias, and Mato Grosso do Sul, and to extend telecommunications services to areas outside of the major urban centers," said Mr. Assaad Jabre, Director of IFC's Infrastructure Department. "The Corporation's equity participation is the first step in the opening up of Lightel's ownership structure. The next step will be to bring strategic partners into the company and, thereafter, for Lightel to pursue a public listing."
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries. To date, IFC has invested US$1.4 billion in telecommunications projects worldwide, of which US$667 million was for IFC's account.