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FC TO INVEST IN TELECOMMUNICATIONS FUND FOR CENTRAL AND EASTERN EUROPE

WASHINGTON, D.C., May 10 -- The International Finance Corporation (IFC) has approved an equity investment of up to US$20 million in Central Europe Telecom Investments, L.P., a private equity fund that will invest in the equity securities of privately-controlled telecommunications companies in Central and Eastern Europe. The manager of the fund will be CETI Managers Limited, a joint venture between Creditanstalt Bankverein, one of Austria's largest banks, and PanEuropean Financial Services, a Central European financial advisory firm. A first closing with commitments of US$42 million has been completed. Major investors in the first closing include IFC, Creditanstalt Bankverein and investor groups brought in by Strome Susskind Investment Management L.P. and Emerging Markets Investors Corporation. Additional commitments are expected to bring the total size of the fund to US$100 million. Improved access to reliable telecommunications services is considered essential to the economic transformations under way in Central and Eastern Europe. The growing demand for improved and expanded telecommunications services has prompted many countries in the region to open their telecommunications sectors to private participation. The fund aims to fulfill a portion of the sector's investment requirements by raising financing from international portfolio investors who view the fund as an attractive means of investing in telecommunications companies in the region. The bulk of the fund is likely to be invested in independent telephone companies in Hungary and Poland, where recent legislative and regulatory developments have created many opportunities for private investment. However, the fund will be free to invest in other telecommunications enterprises throughout the region. Everett J. Santos, Director of IFC's Infrastructure Department, said: "International portfolio investment will be a critical source of financing for telecommunications projects in Central and Eastern Europe. This fund will create a vehicle through which such investments can be made, thereby contributing to improved telecommunications services for countries in the region, and thus to increased economic competitiveness and growth." IFC is the private sector arm of the World Bank Group and is the largest source of multilateral financing for private sector projects in developing countries.