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WASHINGTON, D.C., June 30—The International Finance Corporation (IFC) today signed an investment agreement with Datel Tanzania Limited to help finance its data communications network and extend its services to rural areas. The IFC investment, comprising a loan of US$2.25 million and an equity subscription of US$507,500, will enable Datel to establish a network for fast and efficient data transfers both within Tanzania and internationally.
Tanzania's telecommunications infrastructure needs development. Datel intends to supplement the existing network by Very Small Aperture Terminal (VSAT) satellite using technology and a Wireless Local Loop backbone in densely populated Dar-es-Salaam. Datel's network, the first of its kind in Sub-Saharan Africa, is expected to cost US$10 million.
"We expect Datel's reliable data transmission services to greatly increase the efficiency of Tanzanian businesses and help them to compete in a market that is increasingly becoming global," said Declan Duff, Director of IFC's Telecommunication, Transportation, and Utilities Department. "In the banking sector, money transfers will be made more quickly, leading to increased confidence in the banking system and a higher domestic savings rate."
For the past three years, IFC has worked closely with Tanzanian authorities and businesses to develop the project. In order to complement IFC's expertise in this developmentally critical technology, Finnish and Norwegian trust funds supported experts to assess the market, evaluate the technical aspects of the data network, and help design the project.
Datel's shareholders are: Nexus International, a subsidiary of France Cables et Radio (36%), the state-owned Tanzania Telecommunications Company Limited (35%), IFC (14.5%), and PROPARCO, the French development financial institution for the private sector, a subsidiary of Caisse Francaise de Developpement Group (14.5%).
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.